Exhibit 10.1


 


CONSULTING
AGREEMENT


 


This CONSULTING AGREEMENT (“Agreement”) is entered
into as of the 4th day of October, 2005, by and between Metro One
Telecommunications, Inc., an Oregon corporation (the “Company”), and James
M. Usdan, an individual (“Consultant”).


 


RECITAL


 


The Company desires to engage Consultant in order to
take advantage of his experience, knowledge and abilities in the Company’s
business, and Consultant desires to be so engaged, on the terms set forth in
this Agreement.


 


ACCORDINGLY, based on the foregoing and the mutual
covenants contained in this Agreement, the parties hereby agree as follows:


 


AGREEMENT


 


1.                                       ENGAGEMENT


 


1.1                                 Engagement.  The Company hereby engages Consultant and
Consultant hereby accepts such engagement to perform during the term of this
Agreement the services described in Section 1.2.


 


1.2                                 Duties.  Consultant shall hold himself available
during the term of this Agreement to render consultation, advice and assistance
to the Company in regard to all aspects of its business.  Consultant shall serve as the President and
Chief Executive Officer of the Company, and shall have the general duties of
management usually vested in those offices in a corporation and such other
duties as may be prescribed by the Board of Directors of the Company from time
to time.


 


1.3                                 Relationship.  Consultant’s relationship to the Company
under this Agreement shall be solely that of an independent contractor, and the
parties shall conduct themselves accordingly. 
This Agreement is not intended to create an employment relationship, nor
do the parties intend to create a partnership or joint venture.


 


2.                                       TERM
OF ENGAGEMENT AND TERMINATION


 


2.1                                 Term.  The term of Consultant’s engagement under
this Agreement shall commence on the date first set forth above, and shall
continue until terminated pursuant to Section 2.2.


 


2.2                                 Termination.  Consultant’s engagement under this Agreement
shall terminate upon the happening of any of the following events:


 


(a)                                  the
mutual agreement of Consultant and the Company;


 





















 


(b)                                 the
death of Consultant or the dissolution of the Company;


 


(c)                                  at
the Company’s option, in the event of a breach of this Agreement by Consultant;


 


(d)                                 at
Consultant’s option, in the event of a breach of this Agreement by the Company;


 


(e)                                  at
the Company’s option, for any reason or no reason, on at least 30 days prior
written notice to Consultant; or


 


(f)                                    at
Consultant’s option, for any reason or no reason, on at least 30 days prior
written notice to the Company.


 


2.3                                 Rights
and Duties on Termination.  On
termination of Consultant’s engagement under Section 2.2, neither
Consultant nor the Company shall have any remaining rights or duties under this
Agreement, except:  (i) the Company
shall pay to Consultant such compensation as is due pursuant to Section 3.1
through the date of termination of Consultant’s engagement and shall, subject
to Section 3.2, reimburse Consultant for any unreimbursed expenses
incurred by Consultant prior to the date of termination of Consultant’s
engagement; and (ii) Consultant shall continue to be bound by
Sections 1.3, 2.3, 3.3, 4, 5 and 6.


 


3.                                       COMPENSATION
AND EXPENSE REIMBURSEMENT


 


3.1                                 Compensation.  As consideration for the services and
obligations which Consultant performs and observes under this Agreement, the
Company shall pay Consultant $14,166.67 per month, payable in advance on the
1st day of each month during the term of engagement (except for the October 2005
payment, which shall be paid promptly following the execution and delivery of
this Agreement).  Payments due under this
Section 3.1 shall be by check mailed to Consultant at his address set
forth in Section 6.5, and shall be deemed to be timely made if mailed on
or before the 1st day of each month during the term of engagement (excluding
the October 2005 payment, which shall be deemed to be timely made if
mailed promptly following the execution and delivery of this Agreement).


 


3.2                                 Reimbursement
of Expenses.  Consultant shall be
reimbursed by the Company for all reasonable and documented expenses Consultant
incurs in connection with the performance of his duties under this Agreement.


 


3.3                                 Withholding.  Because Consultant is an independent
contractor and not an employee, no amounts will be withheld from any payments
under this Agreement for federal, state, local, FICA, FUTA or other taxes
unless required by applicable law. 
Consultant undertakes to pay all taxes due with respect to the amounts
received under this Agreement as and when due.


 


3.4                                 Health
Insurance.  At the Company’s option,
Consultant shall either be provided with health insurance coverage under the
Company’s group health insurance plan during the term of engagement, or the
Company shall reimburse Consultant up to $1,350.00 per month during the term of
engagement for the cost of health insurance coverage obtained by Consultant


 


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with terms substantially the same as the coverage provided under the
Company’s group health insurance plan.


 


3.5                                 Stock
Options.  The Company shall grant
Consultant, as of October 26, 2005, nonqualified stock options under the
Company’s 2004 Stock Incentive Plan (the “Plan”) to purchase 150,000 shares of
the Company’s common stock at an exercise price of $0.43 per share.  The grant shall be reflected in a stock
option agreement prepared in compliance with the Plan, which shall provide,
among other things, that the options shall vest in cumulative increments of 25%
on the date of grant (i.e., October 26, 2005), on January 4, 2006, on
April 4, 2006, and on July 4, 2006, provided that Consultant is
engaged by the Company on such dates, with automatic acceleration of vesting in
the event of the proposed liquidation or dissolution of the Company, or a
proposed sale of all or substantially all the assets of the Company or merger
of the Company with or into another corporation.


 


4.                                       CONFIDENTIAL
INFORMATION, ETC.


 


4.1                                 Confidential
Information.  As used in this Section 4,
the term “Confidential Information” means any and all trade secrets or other
confidential or proprietary information of the Company, or other information of
any kind, nature or description concerning any matters affecting or relating to
the Company or any Relevant Invention (as defined below) that derives economic
value, actual or potential, from not being generally known to the public or to
other persons who can obtain economic value from its disclosure or use.  Confidential Information includes without
limitation any such information relating to the financial condition, results of
operations, business, customers, properties, assets, liabilities or future
prospects of the Company.  Consultant
hereby acknowledges and agrees that the Confidential Information is the sole
property of the Company.  Consultant
hereby agrees that he will keep confidential and will not directly or indirectly
divulge to anyone or use or otherwise appropriate any Confidential Information,
except as required in connection with the performance of services under this
Agreement.


 


4.2                                 Tangible
Items.  All files, records,
documents, plans, specifications, manuals, books, forms, receipts, notes,
reports, memoranda, studies, data, calculations, recordings, catalogues,
software, data storage media, correspondence and other compilations of
information, and all copies, abstracts and summaries of the foregoing, and all
other physical items, related to the Company’s business or any Relevant
Invention, whether of a public nature or not, and whether prepared by
Consultant or not, are and shall remain the property of the Company and shall
be delivered to the Company at its request.


 


5.                                       INVENTIONS


 


5.1                                 Relevant
Inventions Defined.  As used in this
Agreement, the term “Relevant Inventions” means any and all ideas, inventions,
techniques, modifications, processes, or improvements (whether patentable or
not), any trademarks, trade names or industrial designs (whether registerable
or not), and any works of authorship (whether or not copyright protection may
be obtained for them) created, conceived, or developed by Consultant, either
solely or in conjunction with others, that relate in any way to, or are useful
in any manner in connection with, the Company’s business.


 


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5.2                                 Rights
to Relevant Inventions.  Consultant
acknowledges and agrees that all of the Relevant Inventions are works made for
hire and are the property of the Company, including any copyrights, patents, or
other intellectual property rights pertaining thereto.  Notwithstanding the foregoing, Consultant
agrees to assign and does hereby assign to the Company all of Consultant’s
right, title and interest, including all rights of copyright, patent and other
intellectual property rights, to or in such Relevant Inventions.  Consultant covenants that he will promptly:


 


(a)                                  disclose
to the Company in writing any Relevant Invention;


 


(b)                                 take
all actions that the Company may request from time to time to assign to the
Company (or to a party designated by the Company), without additional
compensation, all of Consultant’s rights in and to any Relevant Invention for
the United States and all foreign jurisdictions;


 


(c)                                  execute
and deliver to the Company such applications, assignments and other documents
as the Company may request in order to apply for and obtain patent or other
registrations with respect to any Relevant Invention in the United States and
all foreign jurisdictions;


 


(d)                                 sign
all other papers necessary to carry out the above obligations; and


 


(e)                                  give
testimony and render any other reasonable assistance in support of the Company’s
rights to any Relevant Invention.


 


To the extent allowed by law, the foregoing agreement
to assign and assignment of Relevant Inventions include all rights known as or
referred to as “moral rights,” “artist’s rights,” “droit moral,” or the like
(collectively “Moral Rights”).  To the
extent Consultant retains any such Moral Rights under applicable law,
Consultant hereby ratifies and consents to any action that may be taken with
respect to such Moral Rights by, or authorized by, the Company, and agrees not
to assert any Moral Rights with respect thereto.  Consultant will confirm any such
ratifications, consents and agreements from time to time as requested by the
Company.


 


5.3                                 Attorneys-in-Fact.  Consultant hereby irrevocably designates and
appoints the Company and its agents as 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 purposes of this Section 5 with the
same legal force and effect as if executed by Consultant.


 


6.                                       GENERAL
PROVISIONS


 


6.1                                 Injunctive
Relief.  Consultant acknowledges that
the injury that would be suffered by the Company as a result of a breach of the
provisions of this Agreement (including any provision of Sections 4 and 5)
would be irreparable and that an award of monetary damages to the Company for
such a breach would be an inadequate remedy. 
Consequently, subject to Section 6.12, the Company will have the
right, in addition to any other rights it may have, to obtain injunctive relief
to restrain any breach or threatened breach or otherwise to specifically
enforce any provision of this Agreement, and the Company will not be obligated
to post bond or other security in seeking such relief.


 


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6.2                                 Covenants
of Sections 4 and 5 Are Essential and Independent Covenants.  The covenants by Consultant in
Sections 4 and 5 are essential elements of this Agreement, and without
Consultant’s agreement to comply with such covenants, the Company would not
have entered into this Agreement. 
Consultant’s covenants in Sections 4 and 5 are independent
covenants and the existence of any claim by Consultant against the Company
under this Agreement or otherwise will not excuse Consultant’s breach of any
covenant in Sections 4 or 5.


 


6.3                                 Waiver.  The rights and remedies of the parties to
this Agreement are cumulative and not alternative.  Neither the failure nor any delay by either
party in exercising any right, power, or privilege under this Agreement will
operate as a waiver of such right, power, or privilege, and no single or
partial exercise of any such right, power, or privilege will preclude any other
or further exercise of such right, power, or privilege or the exercise of any
other right, power, or privilege.  To the
maximum extent permitted by applicable law, (a) no claim or right arising
out of this Agreement can be discharged by one party, in whole or in part, by a
waiver or renunciation of the claim or right unless in writing signed by the
other party; (b) no waiver that may be given by a party will be applicable
except in the specific instance for which it is given; and (c) no notice
to or demand on one party will be deemed to be a waiver of any obligation of
such party or of the right of the party giving such notice or demand to take
further action without notice or demand as provided in this Agreement.


 


6.4                                 Assignment,
Etc.  Consultant’s duties under this
Agreement are personal and may not be delegated, nor may Consultant’s rights
under this Agreement be assigned, without the prior written consent of the
Company.  The Company may, without
Consultant’s consent, assign its rights and obligations under this Agreement to
any person or entity to which the Company assigns all of its right, title and
interest in and to any Relevant Invention, either directly or by operation of
law (i.e., by merger or a sale of stock). 
Subject to the foregoing, this Agreement shall inure to the benefit of,
and shall be binding upon, the parties hereto and their respective successors,
assigns, heirs, and legal representatives.


 


6.5                                 Notices.  All notices, consents, waivers, and other
communications under this Agreement must be in writing and will be deemed to
have been duly given and received (a) on delivery if delivered by hand or
by a nationally recognized overnight delivery service, or (b) 72 hours
after deposit with the United States Postal Service as certified mail, postage
prepaid, in each case to the appropriate addresses set forth below (or to such
other addresses as a party may designate by notice to the other parties):


 


	
  If to the Company:

  	
   

  	
  Metro
  One Telecommunications, Inc.

  
	
   

  	
   

  	
  11200
  Murray Scholls Place

  
	
   

  	
   

  	
  Beaverton,
  OR 97007

  
	
   

  	
   

  	
   

  
	
  If to Consultant:

  	
   

  	
  James
  M. Usdan

  
	
   

  	
   

  	
  [Address]

  
	
   

  	
   

  	
  [Address]

  



 


6.6                                 Entire
Agreement; Amendments.  This
Agreement contains the entire agreement between the parties with respect to the
subject matter hereof and supersedes all prior agreements and understandings,
oral or written, between the parties hereto with respect to the subject matter


 


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hereof.  Notwithstanding the
foregoing, the parties acknowledge and agree that the Indemnification Agreement
dated as of November 8, 2005 between the Company and Consultant shall
continue in full force and effect according to its terms.  This Agreement may not be amended orally, but
only by an agreement in writing signed by the parties hereto.


 


6.7                                 Governing
Law.  This Agreement will be governed
by the laws of the State of Oregon without regard to choice or conflicts of
laws principles.


 


6.8                                 Section Headings;
Construction.  The headings of
Sections in this Agreement are provided for convenience only and will not
affect its construction or interpretation. 
All references to “Section” or “Sections” refer to the corresponding Section or
Sections of this Agreement unless otherwise specified.  Forms of the word “including” mean “including
without limitation.”


 


6.9                                 Severability.  If any provision of this Agreement is held
invalid or unenforceable by any court of competent jurisdiction, the other
provisions of this Agreement will remain in full force and effect.  Any provision of this Agreement held invalid
or unenforceable only in part or degree will remain in full force and effect to
the extent not held invalid or unenforceable.


 


6.10                           Counterparts.  This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement.


 


6.11                           Attorneys’
Fees.  Subject to Section 6.12,
the prevailing party in any suit or other proceeding brought to enforce any
provisions of this Agreement, or brought to resolve any dispute concerning this
Agreement, shall be entitled to all reasonable costs and expenses incurred in
such proceeding, including reasonable attorneys’ fees.


 


6.12                           Arbitration.  Any and all disputes, controversies or claims
arising out of or related to this Agreement, including without limitation those
relating to the general validity or enforceability of this Agreement, shall be
submitted to final and binding arbitration before JAMS, or its successor, if
any, or if it is no longer in existence, before the American Arbitration
Association.  The arbitration shall be
conducted in Beaverton, Oregon, in accordance with the provisions of JAMS’s
Streamlined Arbitration Rules and Procedures or, if applicable, the rules of
the American Arbitration Association, in effect at the time of filing of the
demand for arbitration.  There shall be
one arbitrator, who shall be a retired circuit court or federal judge.  The parties agree that they have waived any
right to trial by jury.  The decision of
the arbitrator shall be final and binding and the judgment rendered may be
entered in any court having jurisdiction. 
The prevailing party in any such arbitration proceeding shall be
entitled to its costs and reasonable attorneys’ fees, costs and expenses.  Notwithstanding the foregoing, the Company
may apply to either the Oregon Federal District Court or the Washington County
Circuit Court for the State of Oregon for temporary or preliminary injunctive
relief, and any such application shall not be deemed incompatible with or a
waiver of this agreement to arbitrate.


 


6.13                           Further
Assurances.  Each party hereto shall,
from time to time at and after the date hereof, execute and deliver such
instruments, documents and assurances and take such


 


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further actions as the other party may reasonably request to carry out
the purpose and intent of this Agreement.


 


IN WITNESS WHEREOF, the parties have executed and
delivered this Agreement as of the date above first written above.


 


	
   

  	
  THE COMPANY:

  
	
   

  	
   

  
	
   

  	
  METRO ONE TELECOMMUNICATIONS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ William B. Rutherford

  	
   

  
	
   

  	
   

  	
  William B. Rutherford, Chairman

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CONSULTANT:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
    /s/ James M. Usdan

  	
   

  
	
   

  	
  JAMES M. USDAN

  



 


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