Unassociated Document


    Exhibit
      10.1

     

    CONSULTING
      AGREEMENT

    (Incoming
      Services)

    


    This
      Consulting Agreement (“Agreement”) is made and entered into this _3rd__
      day of
      __February_______
      (“Effective Date”), by and between Fiberstars, Inc., a _California
      __
      corporation having a place of business at 32000 Aurora Rd., Solon, OH 44139
      (“Company”), and David N. Ruckert, having a place of business at 11
      Sixpence Way, Coronado, CA 92118
      ("Consultant"). The parties hereby agree as follows:

    


    
      	1.	
              Term
                of Agreement.
                This Agreement will become effective on January
                1, 2006
                and will continue in effect for 15 (fifteen) months or until terminated
                as
                provided in Section 13. 

            


    

    


    
      	2.	
              Services
                To Be Performed by Consultant.
                Consultant agrees to perform the services as set forth in the Statement
                of
                Work (“SOW”), which is attached to this Agreement (the "Project").
                Consultant and Company agree that additional services may be performed
                under this Agreement and that any such additional services will be
                set
                forth on additional SOWs and attached as Exhibit A-1, Exhibit A-2,
                etc. to
                this Agreement as mutually agreed upon by the parties. Consultant
                shall
                perform all services in a professional and timely
                manner.

            


    

    


    
      	3.	
              Fees;
                Expenses.
                Company will compensate Consultant according to the fee schedule
                set forth
                the applicable SOW, attached hereto in accordance with Section 2
                above,
                for services satisfactorily performed by Consultant under this Agreement.
                Consultant will be solely responsible for any expenses it incurs
                in
                connection with the Project including without limitation travel and
                telephone charges. Unless otherwise agreed in writing, Company will
                not
                reimburse Consultant for any expenses. The fee(s) payable under this
                Agreement shall not be construed to include local, state or federal
                sales,
                use, excise, personal property or other similar taxes or duties,
                and any
                such taxes shall be assumed and paid for by
                Consultant.

            


    

    


    
      	4.	
              Consultant's
                Tax Obligations.
                To the extent required by law, Consultant shall be solely responsible
                for
                and shall make proper and timely payment of any withholding or other
                taxes, such as the Consultant's estimated state and federal income
                taxes,
                and Consultant hereby agrees to indemnify Company against any claims,
                liabilities or expenses Company incurs as a result of Consultant's
                breach
                of its obligations under this Section
                4.

            


    

    


    
      	5.	
              Independent
                Consultant Relationship.
                Consultant and Company agree that no employment relationship is created
                by
                this Agreement. Company is interested only in the results to be achieved.
                Consultant is an independent contractor and no employee of Consultant
                will
                be considered an agent or common law employee of Company for any
                purpose.
                

            


    

    


    
      	6.	
              Consultant’s
                Insurance Obligations.
                Consultant is solely responsible for securing and maintaining workers’
                compensation insurance, if legally required, for Consultant and
                Consultant’s employees. Upon Company’s request, Consultant will provide
                Company with proof of Consultant’s workers’ compensation coverage. During
                the term of this Agreement, Consultant will maintain comprehensive
                general
                liability, automotive liability and property damage insurance coverage
                and
                other appropriate coverage, insuring against all liability of Consultant
                and Consultant’s employees, agents or subcontractors arising out of, or in
                connection with, Consultant’s performance of services under this
                Agreement. Consultant hereby agrees to indemnify Company against
                any
                claims, liabilities or expenses Company incurs as a result of Consultant’s
                breach of its obligations under this Section
                6.

            


    

    


    
      	
              7.

            	
              Confidentiality
                of Proprietary Information.

            


    

    


    (a)  “Proprietary
      Information" shall mean (i) technical information relating to Company's existing
      and future products, including, where appropriate and without limitation,
      proprietary technology, techniques and procedures, algorithms, trade secrets,
      discoveries, ideas, inventions (whether patentable or not), concepts, know-how,
      techniques, designs, schematics, specifications, drawings, diagrams, data,
      computer programs, patent disclosures, patent applications, development or
      experimental work, formulae, engineering or test data, product specifications,
      product development plans, structures, models, reports, studies, statistics,
      demonstrations and processes relating to the same disclosed by Company to
      Consultant or obtained or created by Consultant through observation or
      examination of information or developments in connection with this Agreement;
      (ii) confidential marketing information (including without limitation marketing
      strategies, customer lists and requirements and product prices);
      (iii) confidential future product plans; (iv) confidential financial
      information provided to Consultant by Company; (v) personnel information
      (including without limitation Consultant or employee compensation); and
      (vi) other confidential business information. Confidential Information
      shall also include descriptions of the existence or progress of the
      above-described information.


    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    


    (b)  At
      all
      times during this Agreement and at all times after termination of this
      Agreement, Consultant will keep in strict confidence and trust all Proprietary
      Information, and Consultant will not use or disclose any Proprietary Information
      or anything relating to it without the written consent of Company, except as
      may
      be necessary in the ordinary course of performing Consultant's duties under
      this
      Agreement.

    


    (c)  All
      Company property, including, but not limited to, Proprietary Information,
      reports, documents, data, records, equipment and other physical property,
      whether or not pertaining to Proprietary Information, provided to Consultant
      by
      Company or produced by Consultant or others in connection with Consultant
      providing services under this Agreement shall be and remain the sole property
      of
      Company and shall be returned promptly to Company as and when requested by
      Company. Should Company not so request, Consultant shall return and deliver
      all
      such property upon termination of this Agreement, and Consultant will not take
      any such property or any reproduction of such property upon such
      termination.

    


    (d)  Consultant
      recognizes that Company has received and in the future will receive information
      from third parties which is the third party's private or proprietary information
      subject to a duty on Company's part to maintain the confidentiality of such
      information and to use it only for certain limited purposes. Consultant agrees
      that during the term of this Agreement and thereafter Consultant owes Company
      and such third parties a duty to hold all such private or proprietary
      information received from such third parties in the strictest confidence and
      not
      to disclose it, except as necessary in carrying out Consultant's work for
      Company consistent with Company's agreement with such third party and not to
      use
      it for the benefit of anyone other than for Company or such third party
      consistent with Company's agreement with such third party.

    


    (e)  The
      obligations of Consultant shall continue until such time as the Proprietary
      Information is publicly known, without fault on the part of Consultant.


    


    
      	
              8.

            	
              Developed
                Information.

            


    

    


    (a) Consultant
      agrees to promptly disclose to Company, or any persons designated by it, all
      improvements, inventions, formulae, processes, techniques, discoveries,
      developments, improvements, trade secrets, know-how and data, whether or not
      patentable, and all designs, trademarks and copyrightable works that Consultant
      may solely or jointly make or conceive or reduce to practice or learn during
      the
      period of this Agreement which are within the scope of the services to be
      provided by Consultant under this Agreement, as set forth in the SOWs attached
      hereto in accordance with Section 2 of this Agreement, or result from tasks
      assigned Consultant by Company (hereinafter "Developed Information"). Such
      disclosure shall continue for one year after termination of this Agreement
      with
      respect to anything that would be Developed Information if made, conceived,
      reduced to practice or learned during the term thereof.

    


    (b) Consultant
      agrees that all Developed Information shall be the sole property of Company
      and
      its assigns, and Company and its assigns shall be the sole owner of all patents,
      trademarks and copyrights in connection therewith. Consultant hereby assigns
      to
      Company any rights Consultant may have or acquire in all Developed Information.
      Consultant further agrees as to all Developed Information to assist Company
      in
      every proper way (but at Company's expense) to obtain and from time to time
      enforce patents, trademarks and copyrights on the Developed Information in
      any
      and all countries, and to that end Consultant will execute all documents for
      use
      in applying for and obtaining such patents and copyrights thereon and enforcing
      same, as Company may desire, together with any assignments thereof to Company
      or
      persons designated by it. Consultant's obligation to assist Company in obtaining
      and enforcing patents and copyrights for the Developed Information in any and
      all countries shall continue beyond the termination of this Agreement, but
      Company shall compensate Consultant at a reasonable rate commensurate with
      rates
      paid by others for comparable services after such termination for time actually
      spent by Consultant at Company's request on such assistance. In the event that
      Company is unable for any reason whatsoever to secure Consultant's signature
      to
      any lawful and necessary document required to apply for or execute any patent
      or
      copyright application with respect to Developed Information (including renewals,
      extensions, continuations, divisions or continuations in part thereof),
      Consultant hereby irrevocably designates and appoints Company and its duly
      authorized officers and agents, as Consultant's agents and attorneys-in-fact
      to
      act for and in Consultant's behalf and instead of Consultant, to execute and
      file any such application and to do all other lawfully permitted acts to further
      the prosecution and issuance of patents or copyrights thereon with the same
      legal force and effect as if executed by Consultant.

    


    
      	9.  	
              Property
                of Others.
                Consultant warrants and represents that it has all necessary rights
                in and
                to the deliverables, work product or any other information or data
                provided to Company under this Agreement and that such deliverables,
                work
                product or other information or data do not and will not infringe
                the
                rights of any third party. Consultant warrants and represents that
                Consultant's performance under this Agreement does not and will not
                breach
                any agreement to keep in confidence confidential information or trade
                secret, if any, acquired by Consultant in confidence or in trust
                prior to
                this Agreement. There are no agreements, written or oral, conveying
                rights
                in any research conducted by Consultant under this Agreement to anyone
                other than Company. Consultant has not entered into, and Consultant
                agrees
                Consultant will not enter into, any agreement either written or oral
                in
                conflict herewith. Consultant understands, as part of the consideration
                for entering into this Agreement, Consultant has not brought and
                will not
                bring to Company or use in the performance of Consultant's
                responsibilities at Company any equipment, supplies, facility or
                proprietary or trade secret information of any third party, including
                without limitation, current or former clients to which Consultant
                provided
                services which are not generally available to the public, unless
                Consultant has obtained written authorization for their possession
                and
                use. Consultant hereby agrees to indemnify Company against any claims,
                liabilities or expenses Company incurs arising out of or related
                to
                Consultant’s breach of its obligations under this Section
                9.

            


    


    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    


    
      	
              10.

            	
              Representations
                and Warranties.
                Consultant hereby further warrants, represents, covenants and agrees
                as
                follows:

            


    

    


    (a) Consultant
      has and will continue to have the full right, power and authority to enter
      into
      this agreement, to perform the terms and conditions of this Agreement, to grant
      the rights herein granted to Company, to make the representations and warranties
      contained herein, to otherwise perform hereunder, and to vest in Company all
      the
      rights as provided in this agreement, free and clear of any and all claims,
      rights and obligations not set forth herein. 

    


    (b) Consultant
      warrants and represents that it has all necessary rights in and to the
      deliverables, work product or any other information or data provided to Company
      under this Agreement, including without limitation, any Developed Information,
      (collectively “Work Product”). 

    


    (c) The
      Work
      Product, including, without limitation, all copyrights throughout the Universe
      pertaining thereto and all extensions and renewals of said copyrights, are
      and
      shall be the sole and exclusive property of Company throughout the universe.
      Company has the exclusive right forever and throughout the Universe to change,
      adapt, modify, use, transfer and otherwise exploit the Work
      Product.

    


    (d) The
      Work
      Product and Company’s rights therein, including the copyrights therein, do not
      and will not violate, invade, infringe upon, interfere with, conflict with,
      or
      unfairly compete with, the rights (including without limitation all common
      law
      or statutory rights or the copyrights) of any other person or entity, and there
      does not now and will not exist any claim by a third party in or to the Work
      Product, and no third party has or will have any rights in and to the Work
      Product.

    


    (e) All
      costs
      and expenses in connection with Consultant’s provision of the services under
      this Agreement, including any expenses incurred by Consultant in connection
      with
      the execution of this Agreement, have been paid by Consultant. Other than the
      amounts to be paid to Consultant under this Agreement, Company shall not be
      required to make any payments of any nature for, or in connection with, the
      acquisition, exercise or exploitation of the rights granted to Company
      hereunder.

    


    
      	
              11.

            	
              Indemnity.
                Consultant will indemnify and hold Company and any licensee of Company
                harmless from and against any and all claims, damages, liabilities,
                costs
                and expenses, including legal expenses and reasonable counsel fees,
                arising out of any breach or threatened breach by Consultant of,
                or any
                third party claim which is inconsistent with, any warranty,
                representation, or agreement made by Consultant in this
                Agreement.

            


    

    


    
      	
              12.

            	
              No
                Solicitation.
                Consultant agrees that during the term of this Agreement and for
                a period
                of twelve months thereafter, Consultant will not either directly
                or
                indirectly solicit, induce, recruit or encourage any of the Company’s
                employees or consultants to terminate their relationship with Company,
                or
                attempt to do any of the foregoing, either for Consultant or for
                any third
                party. 

            


    

    


    13. 
       Termination.

    


    
      	(a)
                	
              This
                Agreement shall terminate automatically on the occurrence of any
                of the
                following events: (i) sale of Consultant's business or (ii) assignment
                of
                this Agreement by Consultant without Company's
                consent.

            


    

    


    
      	(b)
                	
              Company
                may terminate this Agreement for any reason on thirty (30) days'
                written
                notice to Consultant.

            


    


    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    


    
      	(c)
                	
              Should
                Consultant default in the performance of this Agreement or materially
                breach any of its terms, Company, at its option, may terminate this
                Agreement immediately upon giving written notice to Consultant. For
                the
                purpose of this section, material breach of this Agreement shall
                include
                but not be limited to failure to complete the Project in a timely
                fashion,
                habitual neglect, gross negligence or willful wrongdoing in the
                performance of the Consultant's duties, or Consultant's breach of
                Sections
                6, 7, 8, 9, 10 or 11 of this
                Agreement.

            


    

    


    
      	(d)
                	
              Sections
                4. 6-12, 13(d), and 14-18 shall survive termination of this Agreement
                for
                any reason.

            


    

    


    
      	
              14.

            	
              Assignment;
                Successors and Assigns.
                Consultant’s rights and obligations under Agreement may not be assigned or
                delegated by Consultant in whole or in part without the express written
                consent of Company. This Agreement inures to the benefit of successors
                and
                assigns of Company, and is binding upon Consultant's heirs,
                executors, administrators or other legal
                representatives.

            


    

    


    
      	
              15.

            	
              Governing
                Law.
                This Agreement shall be governed by and construed in accordance with
                the
                laws of the State of California, exclusive of its choice of law
                provisions. The California state courts of Santa Clara County (or,
                if
                there is exclusive federal jurisdiction, the United States District
                Court
                for the Northern District of California) shall have exclusive jurisdiction
                and venue over any dispute arising out of or relating to this Agreement,
                and each party hereby consents to the jurisdiction and venue of such
                courts. The parties agree that service of process by US mail certified,
                to
                the last known address of a party, as provided or as changed in accordance
                with the provisions of this Agreement, shall be
                valid.

            


    

    


    
      	
              16.

            	
              Equitable
                Relief.
                Consultant acknowledges that any breach or threatened breach by Consultant
                of the provisions of Sections 6 through 12 of this Agreement will
                result
                in immediate and irreparable harm to Company, for which there will
                be no
                adequate remedy at law, and that Company will be entitled to equitable
                relief to restrain Consultant from violating the terms of these sections,
                and/or to compel Consultant to cease and desist all unauthorized
                use and
                disclosure of the Proprietary Information. Company shall be entitled
                to
                recover from Consultant any costs or expenses incurred in obtaining
                relief
                against breach of this Agreement by Consultant, including, but not
                limited
                to, legal fees and costs. Nothing in this section shall be construed
                as
                prohibiting Company from pursuing any other remedies available to
                it for
                such breach or threatened breach, including recovery of damages from
                Consultant.

            


    

    


    
      	
              17.

            	
              Exhibits.
                The following exhibits are attached to this Agreement and are incorporated
                by reference: Exhibit A, Statement of Work
                Form.

            


    

    


    
      	
              18.

            	
              Miscellaneous.
                This Agreement supersedes and cancels any and all previous agreements
                of
                whatever nature between Company and Consultant with respect to the
                matters
                covered herein. This Agreement constitutes the full, complete and
                exclusive agreement between Consultant and Company with respect to
                the
                subject matters herein. No modification or waiver of this Agreement,
                or
                any portion hereof, shall be valid unless made in writing and signed
                by
                the parties hereto. All notices under this Agreement shall be deemed
                to
                have been duly given upon the mailing of the notice, postpaid, to
                the
                party entitled to such notice at the respective addresses set forth
                herein. The failure of any party to require performance by another
                party
                of any provision of this Agreement shall in no way affect the full
                right
                to require such performance at any time thereafter. Should any provisions
                of this Agreement be found unenforceable, the remainder shall still
                be in
                effect. This Agreement has been negotiated by the parties and their
                respective attorneys, and the language of this Agreement shall not
                be
                construed for or against either party. The headings are not part
                of this
                Agreement. Either the original or copies, including facsimile
                transmissions, of this Agreement, may be executed in counterparts,
                each of
                which shall be an original as against any party whose signature appears
                on
                such counterpart and all of which together shall constitute one and
                the
                same instrument.

            


    

    


    Accepted
      and Agreed:

     

    
      
        	
                CONSULTANT:

              	 	
                COMPANY:

              
	 	 	 
	
                By:

              	
                /s/David
                  N. Ruckert  

              	 	
                By:

              	
                /s/John
                  M. Davenport  

              
	 	 	 
	
                Print
                  Name: 

              	
                David
                  N. Ruckert  

              	 	
                Print
                  Name:

              	
                John
                  M. Davenport  

              
	 	 	 
	
                As
                  Its: 

              	 	 	
                As
                  Its:

              	
                Chief
                  Executive Officer  

              


      

    

     

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    

      EXHIBIT
        A

      


      STATEMENT
        OF WORK FORM

      


      
        	1.	
                Principal
                  Contact(s):
                  John
                  M. Davenport and Robert A.
                  Connors

              


      

       

      
        	2.	
                Services
                  to be Provided; Term.

              


      

       

      Consultant
        shall render such services as Company may from time to time request in writing
        in connection with the following project:

       

      Marketing
        EFOÔ

      


      Consultant
        shall upon Company's request, but in any event no less frequently than once
        each
        month, report to Company on the status of the project performed by Consultant
        hereunder. Upon notice to Consultant, Company has the right to receive copies
        of
        all or any portion thereof.

      


      
        	3.	
                Fee
                  Schedule. 

              


      

       

      
        	a)  	
                Cash
                  Compensation

              


      

      


      
        	 	
                $10,000
                  per month for 9 months

              


      

      


      Company
        will pay $10,000 before the 10th
        of the
        month following the month in which services have been performed. The total
        amount authorized to be paid to Consultant under this Statement of Work is
        $90,000
        for 9 months.
        This
        amount shall not be exceeded without Company’s written approval.

      


      
        	b)  	
                Stock
                  Compensation

              


      

      
        	i.  	
                25,000
                  options granted effective December 9,
                  2005

              


      

      
        	ii.  	
                32,000
                  options granted on the date of the Fiberstars 2006 Annual Meeting,
                  subject
                  to the approval by shareholders of additional options in the option
                  pool.

              


      

      


      
        	4.	
                Acceptance
                  of Work Product.
                  

              


      

       

      Within
        ten (10) working days after receipt of Consultant's completed report ("Work
        Product"), Company will accept or reject the Work Product. In the event Company
        rejects the Work Product, Company may at its option require Consultant, at
        Consultant's own expense, to revise the Work Product to render it acceptable
        to
        Company. Consultant will have ten (10) working days to submit the revised
        Work
        Product to Company. If Company fails to notify Consultant within the specified
        time, Company will be deemed to have accepted the Work Product.

      

        
          	
                  CONSULTANT:

                	 	
                  COMPANY

                
	 	 	 
	
                  By:

                	
                  /s/David
                    N. Ruckert  

                	 	
                  By:

                	
                  /s/John
                    M. Davenport  

                
	 	 	 
	
                  Print
                    Name: 

                	
                  David
                    N. Ruckert  

                	 	
                  Print
                    Name:

                	
                  John
                    M. Davenport  

                
	 	 	 
	
                  As
                    Its: 

                	 	 	
                  As
                    Its:

                	
                  Chief
                    Executive Officer  

                


        

         

        
          
             

          

          
            5