ARGONAUT TECHNOLOGIES INC
EXHIBIT 10.16
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<TYPE>EX-10.16
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<FILENAME>f80293ex10-16.txt
<DESCRIPTION>EXHIBIT 10.16
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                                                                   Exhibit 10.16

                           ARGONAUT TECHNOLOGIES, INC.

                              CONSULTING AGREEMENT

        This Consulting Agreement ("AGREEMENT") is entered into as of January
10, 2002 by and between Argonaut Technologies, Inc. (the "COMPANY") and John T.
Supan ("CONSULTANT").

        WHEREAS, Consultant is the former Chief Financial Officer of the Company
and has resigned to pursue a career as an independent consultant providing chief
financial officer and expert accounting services, primarily to private and
public companies in the life sciences and other industries;

        WHEREAS, The Company desires to retain Consultant as an independent
contractor to act as its Chief Financial Officer during the Company's search for
a permanent chief financial officer, and to assist the Company in connection
with ongoing mergers and acquisition activities, all as more fully detailed in
Exhibit A; and

        WHEREAS, Consultant is willing to perform such services, on the terms
described below.

        NOW THEREFORE, in consideration of the mutual promises contained herein,
the parties agree as follows:

        1. Services and Compensation. Consultant agrees to perform for the
Company the services described in Exhibit A (the "SERVICES"), and the Company
agrees to pay Consultant the compensation described in Exhibit A for
Consultant's performance of the Services.

        2. Confidentiality.

               A. Definition. "CONFIDENTIAL INFORMATION" means any non-public
information that relates to the actual or anticipated business or research and
development of the Company, technical data, trade secrets or know-how,
including, but not limited to, research, product plans or other information
regarding Company's products or services and markets therefor, customer lists
and customers (including, but not limited to, customers of the Company on whom
Consultant called or with whom Consultant became acquainted during the term of
the consulting relationship), software, developments, inventions, processes,
formulas, technology, designs, drawing, engineering, hardware configuration
information, marketing, finances or other business information. Confidential
Information does not include information that (i) has become publicly known and
made generally available through no wrongful act of Consultant or (ii) has been
rightfully received by Consultant from a third party who is authorized to make
such disclosure.

               B. Nonuse and Nondisclosure. Consultant will not, during or
subsequent to the term of this Agreement, (i) use the Confidential Information
for any purpose whatsoever other than the performance of the Services on behalf
of the Company or (ii) disclose the Confidential Information to any third party.
Consultant agrees that all Confidential Information will remain the sole
property


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of the Company. Consultant also agrees to take all reasonable precautions to
prevent any unauthorized disclosure of such Confidential Information. Without
the Company's prior written approval, Consultant will not directly or indirectly
disclose to anyone the existence of this Agreement or the fact that Consultant
has this arrangement with the Company.

               C. Former Client Confidential Information. Consultant agrees that
Consultant will not, during the term of this Agreement, improperly use or
disclose any proprietary information or trade secrets of any former or current
employer of Consultant or other person or entity with which Consultant has an
agreement or duty to keep in confidence information acquired by Consultant, if
any. Consultant also agrees that Consultant will not bring onto the Company's
premises any unpublished document or proprietary information belonging to any
such employer, person or entity unless consented to in writing by such employer,
person or entity.

               D. Third Party Confidential Information. Consultant recognizes
that the Company has received and in the future will receive from third parties
their confidential or proprietary information subject to a duty on the 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 the Company and such third parties a
duty to hold all such confidential or proprietary information in the strictest
confidence and not to disclose it to any person, firm or corporation or to use
it except as necessary in carrying out the Services for the Company consistent
with the Company's agreement with such third party.

               E. Return of Materials. Upon the termination of this Agreement,
or upon Company's earlier request, Consultant will deliver to the Company all of
the Company's property, including but not limited to all electronically stored
information and passwords to access such property, or Confidential Information
that Consultant may have in Consultant's possession or control.

        3. Ownership.

               A. Assignment. Consultant agrees that all copyrightable material,
notes, records, drawings, designs, inventions, improvements, developments,
discoveries and trade secrets conceived, discovered, developed or reduced to
practice by Consultant, solely or in collaboration with others, during the term
of this Agreement that relate in any manner to the business of the Company that
Consultant may be directed to undertake, investigate or experiment with or that
Consultant may become associated with in work, investigation or experimentation
in the Company's line of business in performing the Services under this
Agreement (collectively, "INVENTIONS"), are the sole property of the Company.
Consultant also agrees to assign (or cause to be assigned) and hereby assigns
fully to the Company all Inventions and any copyrights, patents, mask work
rights or other intellectual property rights relating to all Inventions.

               B. Further Assurances. Consultant agrees to assist Company, or
its designee, at the Company's expense, in every proper way to secure the
Company's rights in Inventions and any copyrights, patents, mask work rights or
other intellectual property rights relating to all Inventions in any and all
countries, including the disclosure to the Company of all pertinent information
and data with respect to all Inventions, the execution of all applications,
specifications, oaths, assignments and all other instruments that the Company
may deem necessary in order to apply for and obtain


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such rights and in order to assign and convey to the Company, its successors,
assigns and nominees the sole and exclusive right, title and interest in and to
all Inventions, and any copyrights, patents, mask work rights or other
intellectual property rights relating to all Inventions. Consultant also agrees
that Consultant's obligation to execute or cause to be executed any such
instrument or papers shall continue after the termination of this Agreement.

               C. Pre-Existing Materials. Subject to SECTION 3.A, Consultant
agrees that if, in the course of performing the Services, Consultant
incorporates into any Invention developed under this Agreement any pre-existing
invention, improvement, development, concept, discovery or other proprietary
information owned by Consultant or in which Consultant has an interest, (i)
Consultant will inform Company, in writing before incorporating such invention,
improvement, development, concept, discovery or other proprietary information
into any Invention, and (ii) the Company is hereby granted a nonexclusive,
royalty-free, perpetual, irrevocable, worldwide license to make, have made,
modify, use and sell such item as part of or in connection with such Invention.
Consultant will not incorporate any invention, improvement, development,
concept, discovery or other proprietary information owned by any third party
into any Invention without Company's prior written permission.

        4. Conflicting Obligations.

               A. Conflicts. Consultant certifies that Consultant has no
outstanding agreement or obligation that is in conflict with any of the
provisions of this Agreement or that would preclude Consultant from complying
with the provisions of this Agreement. Consultant will not enter into any such
conflicting agreement during the term of this Agreement. Consultant's violation
of this Section 4.A will be considered a material breach under SECTION 6.B.

               B. Substantially Similar Designs. In view of Consultant's access
to the Company's trade secrets and proprietary know-how, Consultant agrees that
Consultant will not, without Company's prior written approval, design identical
or substantially similar designs as those developed under this Agreement for any
third party during the term of this Agreement and for a period of 12 months
after the termination of this Agreement. Consultant acknowledges that the
obligations in this SECTION 4 are ancillary to Consultant's nondisclosure
obligations under SECTION 2.

        5. Reports. Consultant also agrees that Consultant will, from time to
time during the term of this Agreement or any extension thereof, keep the
Company advised as to Consultant's progress in performing the Services under
this Agreement. Consultant further agrees that Consultant will, as requested by
the Company, prepare written reports with respect to such progress. The Company
and Consultant agree that the time required to prepare such written reports will
be considered time devoted to the performance of the Services.

        6. Term and Termination.

               A. Term. The term of this Agreement will begin on the date of
this Agreement and will continue until the earlier to occur of (i) March 31,
2002, (ii) the date on which the Company's annual report on Form 10K for the
year ended December 31, 2001 is filed with the Securities and Exchange


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Commission, or (iii) the date on which this Agreement is terminated in
accordance with the provisions of SECTION 6.B hereof.

               B. Termination. Either party may terminate this Agreement upon
giving the other party 14 days' prior written notice of such termination
pursuant to SECTION 11.E of this Agreement. The Company may terminate this
Agreement immediately and without prior notice if Consultant refuses to or is
unable to perform the Services or is in breach of any material provision of this
Agreement.

               C. Survival. Upon such termination, all rights and duties of the
Company and Consultant toward each other shall cease except:

                      (1)The Company will pay, within 30 days after the
effective date of termination, all amounts owing to Consultant for Services
completed and accepted by the Company prior to the termination date and related
expenses, if any, reasonably necessary and prudent in connection with the
performance of Services pursuant to this Agreement and in accordance with the
provisions of Section 1 of this Agreement; and

                      (2)Section 2 (Confidentiality), Section 3 (Ownership),
Section 4 (Conflicting Obligations), Section 7 (Independent Contractor;
Benefits), Section 8 (Indemnification) and Section 10 (Arbitration and Equitable
Relief) will survive termination of this Agreement.

        7. Independent Contractor; Benefits.

               A. Independent Contractor. It is the express intention of the
Company and Consultant that Consultant perform the Services as an independent
contractor to the Company. Nothing in this Agreement shall in any way be
construed to constitute Consultant as an agent, employee or representative of
the Company. Without limiting the generality of the foregoing, Consultant is not
authorized to bind the Company to any liability or obligation or to represent
that Consultant has any such authority. Consultant agrees to furnish (or
reimburse the Company for) all tools and materials necessary to accomplish this
Agreement and shall incur all expenses associated with performance, except as
expressly provided in Exhibit A. Consultant acknowledges and agrees that
Consultant is obligated to report as income all compensation received by
Consultant pursuant to this Agreement. Consultant agrees to and acknowledges the
obligation to pay all self-employment and other taxes on such income.

               B. Benefits. The Company and Consultant agree that Consultant
will receive no Company-sponsored benefits from the Company. If Consultant is
reclassified by a state or federal agency or court as Company's employee,
Consultant will become a reclassified employee and will receive no benefits from
the Company, except those mandated by state or federal law, even if by the terms
of the Company's benefit plans or programs of the Company in effect at the time
of such reclassification, Consultant would otherwise be eligible for such
benefits.

        8. Indemnification. Consultant agrees to indemnify and hold harmless the
Company and its directors, officers and employees from and against all taxes,
losses, damages, liabilities, costs and expenses, including attorneys' fees and
other legal expenses, arising directly or indirectly from or in connection with
(i) any bad faith or reckless or intentionally wrongful act of Consultant or


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Consultant's assistants, employees or agents, (ii) a determination by a court or
agency that the Consultant is not an independent contractor, (iii) any breach by
the Consultant or Consultant's assistants, employees or agents of any of the
covenants contained in this Agreement, or (iv) any failure of Consultant to
perform the Services in accordance with all applicable laws, rules and
regulations.

        9. Nonsolicitation. From the date of this Agreement until 12 months
after the termination of this Agreement (the "RESTRICTED PERIOD"), Consultant
will not, without the Company's prior written consent, directly or indirectly,
solicit or encourage any employee or contractor of the Company or its affiliates
to terminate the consulting relationship with, or cease providing services to,
the Company or its affiliates. During the Restricted Period, Consultant will
not, whether for Consultant's own account or for the account of any other
person, firm, corporation or other business organization, intentionally
interfere with any person who is or during the period of Consultant's engagement
by the Company was a partner, supplier, customer or client of the Company or its
affiliates.

        10. Arbitration and Equitable Relief.

               A. Arbitration. Consultant agrees that any and all controversies,
claims or disputes with anyone (including the Company and any employee, officer,
director, shareholder or benefit plan of the Company, in its capacity as such or
otherwise) arising out of, relating to or resulting from Consultant's
performance of the Services under this Agreement or the termination of this
Agreement, including any breach of this Agreement, shall be subject to binding
arbitration under the Arbitration Rules set forth in California Code of Civil
Procedure Section 1280 through 1294.2, including Section 1283.05 (the "RULES")
and pursuant to California law. CONSULTANT AGREES TO ARBITRATE, AND THEREBY
AGREES TO WAIVE ANY RIGHT TO A TRIAL BY JURY WITH RESPECT TO, ALL DISPUTES
ARISING FROM OR RELATED TO THIS AGREEMENT, INCLUDING BUT NOT LIMITED TO: ANY
STATUTORY CLAIMS UNDER STATE OR FEDERAL LAW, CLAIMS UNDER TITLE VII OF THE CIVIL
RIGHTS ACT OF 1964, THE AMERICANS WITH DISABILITIES ACT OF 1990, THE AGE
DISCRIMINATION IN EMPLOYMENT ACT OF 1967, THE OLDER WORKERS BENEFIT PROTECTION
ACT, THE CALIFORNIA FAIR EMPLOYMENT AND HOUSING ACT, THE CALIFORNIA LABOR CODE,
CLAIMS OF HARASSMENT, DISCRIMINATION OR WRONGFUL TERMINATION AND ANY STATUTORY
CLAIMS. Consultant understands that this Agreement to arbitrate also applies to
any disputes that the Company may have with Consultant.

               B. Procedure. Consultant agrees that any arbitration will be
administered by the American Arbitration Association ("AAA"), and that a neutral
arbitrator will be selected in a manner consistent with its National Rules for
the Resolution of Employment Disputes. Consultant agrees that the arbitrator
will have the power to decide any motions brought by any party to the
arbitration, including discovery motions, motions for summary judgment and/or
adjudication and motions to dismiss and demurrers, prior to any arbitration
hearing. Consultant agrees that the arbitrator will issue a written decision on
the merits. Consultant also agrees that the arbitrator will have the power to
award any remedies, including attorneys' fees and costs, available under
applicable law. Consultant understands that the Company will pay for any
administrative or hearing fees charged by the arbitrator or AAA, except that
Consultant shall pay the first $200.00 of any filing fees associated with any
arbitration Consultant initiates. Consultant agrees that the arbitrator will
administer and


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conduct any arbitration in a manner consistent with the Rules and that, to the
extent that the AAA's National Rules for the Resolution of Employment Disputes
conflict with the Rules, the Rules will take precedence.

               C. Remedy. Except as provided by the Rules, arbitration will be
the sole, exclusive and final remedy for any dispute between the Company and
Consultant. Accordingly, except as provided for by the Rules, neither the
Company nor Consultant will be permitted to pursue court action regarding claims
that are subject to arbitration. Notwithstanding the foregoing, the arbitrator
will not have the authority to disregard or refuse to enforce any lawful Company
policy, and the arbitrator shall not order or require the Company to adopt a
policy not otherwise required by law which the Company has not adopted.

               D. Availability of Injunctive Relief. In addition to the right
under the Rules to petition the court for provisional relief, Consultant agrees
that any party may also petition the court for injunctive relief where either
party alleges or claims a violation of Sections 2 (Confidentiality), 3
(Ownership) or 4 (Conflicting Obligations) of this Agreement or any other
agreement regarding trade secrets, confidential information, nonsolicitation or
Labor Code Section 2870. In the event either the Company or Consultant seeks
injunctive relief, the prevailing party will be entitled to recover reasonable
costs and attorneys' fees.

               E. Administrative Relief. Consultant understands that this
Agreement does not prohibit Consultant from pursuing an administrative claim
with a local, state or federal administrative body such as the Department of
Fair Employment and Housing, the Equal Employment Opportunity Commission or the
workers' compensation board. This Agreement does, however, preclude Consultant
from pursuing court action regarding any such claim.

               F. Voluntary Nature of Agreement. Consultant acknowledges and
agrees that Consultant is executing this Agreement voluntarily and without any
duress or undue influence by the Company or anyone else. Consultant further
acknowledges and agrees that Consultant has carefully read this Agreement and
has asked any questions needed to understand the terms, consequences and binding
effect of this Agreement and fully understand it, including that Consultant is
waiving its right to a jury trial. Finally, Consultant agrees that Consultant
has been provided an opportunity to seek the advice of an attorney of its choice
before signing this Agreement.

        11. Miscellaneous.

               A. Governing Law. This Agreement shall be governed by the laws of
California without regard to California's conflicts of law rules.

               B. Assignability. Except as otherwise provided in this Agreement,
Consultant may not sell, assign or delegate any rights or obligations under this
Agreement.

               C. Entire Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter of this
Agreement and supersedes all prior written and oral agreements between the
parties regarding the subject matter of this Agreement.


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               D. Headings. Headings are used in this Agreement for reference
only and shall not be considered when interpreting this Agreement.

               E. Notices. Any notice or other communication required or
permitted by this Agreement to be given to a party shall be in writing and shall
be deemed given if delivered personally or by commercial messenger or courier
service, or mailed by U.S. registered or certified mail (return receipt
requested), or sent via facsimile (with receipt of confirmation of complete
transmission) to the party at the party's address or facsimile number written
below or at such other address or facsimile number as the party may have
previously specified by like notice. If by mail, delivery shall be deemed
effective 3 business days after mailing in accordance with this Section 11(E).

                      (1)   If to the Company, to:
                            Argonaut Technologies, Inc.
                            1101 Chess Drive
                            Foster City, CA 94404
                            Attention: Lissa Goldenstein
                            Telephone: (650) 655-4200
                            Facsimile: (650) 655-4300

                      (2) If to Consultant, to the address for notice on the
signature page to this Agreement or, if no such address is provided, to the last
address of Consultant provided by Consultant to the Company.

               F. Attorneys' Fees. In any court action at law or equity that is
brought by one of the parties to this Agreement to enforce or interpret the
provisions of this Agreement, the prevailing party will be entitled to
reasonable attorneys' fees, in addition to any other relief to which that party
may be entitled.

               G. Severability. If any provision of this Agreement is found to
be illegal or unenforceable, the other provisions shall remain effective and
enforceable to the greatest extent permitted by law.

               H. Insurance and Indemnity. The Company will use its reasonable
best efforts to provide coverage to Consultant under the Company's Directors and
Officers Insurance Policy during the Term with respect to any Services provided
to the Company pursuant to this Agreement. If at any time Consultant is no
longer an officer of the Company, the Company agrees to indemnify and hold
harmless Consultant from and against all taxes, losses, damages, liabilities,
costs and expenses, including reasonable attorney's fees (collectively "Losses")
arising directly from or in connection with any violation or claimed violation
of a third party's rights relating to any period during the Term, provided,
however, that the Company shall not indemnify or hold harmless Consultant in
connection with any Losses which relate to amounts due and owing by Consultant
to Company pursuant to Section 8 hereof or which arise directly or indirectly
from Consultant's negligence, willful misconduct or bad faith.


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               I. Access to Information. During the Term of this Agreement, the
Company will provide Consultant with reasonable access to the business and
financial information regarding (i) the Company, (ii) the Company's ongoing
merger and acquisition activities relative to the project referred to as
Rainbow, (iii) the Company's financial and SEC reporting and Nasdaq compliance
initiatives, and (iv) the Company's tax reporting initiatives, reasonably
necessary for Consultant to perform the duties of Consultant described in
Exhibit A, or as reasonably requested by Consultant in connection with the
performance of such duties.

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


CONSULTANT                                 ARGONAUT TECHNOLOGIES, INC.


--------------------------------           -------------------------------------
John T. Supan                              Lissa Goldenstein
                                           President and Chief Executive Officer

Address for Notice:

John T. Supan
372 Devonshire Boulevard
San Carlos, CA 94070
Tel:     (650) 593-3170
         (650) 593-3501


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                                    EXHIBIT A

                            Services and Compensation

        1. Contact. Consultant's principal Company contact:

        Lissa Goldenstein, President and Chief Executive Officer

        2. Services. The Services shall include, but shall not be limited to,
the following:

               A. Act as the Company's Chief Financial Officer during the Term,
and provide the services typically associated with that office, including,
without limitation, the following:

                      (i) working closely with the Company's internal accounting
personnel and officers and directors and independent auditors in connection with
the Company's audit for the year ended December 31, 2001; and

                      (ii) working closely with the Company's internal
accounting personnel and directors and officers and independent auditors in
connection with the Company's federal and state tax reporting initiatives for
the year ended December 31, 2001 and prior periods;

                      (iii) working closely with the Company's internal
accounting personnel, directors and officers, independent auditors and outside
counsel in connection with any activities conducted in connection with the
Company's compliance with Securities and Exchange Commission ("SEC") and Nasdaq
reporting requirements, including any press releases, earnings conference calls
or webcasts undertaken by the Company in compliance with SEC Regulation FD;

                      (iv) attending meetings of the Company's audit committee,
compensation committee and board of directors as requested from time to time by
the Company's President and Chief Executive Officer or Chairman or any member of
the Company's board of directors; and

                      (v) assisting the Company's directors and officers in
connection with ongoing and currently planned mergers and acquisition
initiatives, including without limitation the project referred to as "Rainbow"
with the understanding that this may involve international and domestic travel.

               B. Any transition related duties which are necessary in order to
ensure that the incoming Chief Financial Officer of the Company has all
appropriate information to perform his or her responsibilities.

        3. Compensation.

               A. Consulting Fee. The Company shall pay Consultant a monthly fee
in an amount equal to the lesser of (i) $40,000 or (ii) the product of (x) the
number of hours worked by Consultant


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on Company matters during the month, as set forth on time recording statements
submitted by Consultant to the President and Chief Executive Officer of the
Company, multiplied by (y) $200, payable within 30 days of receipt of invoice
from Consultant.

               B. Vesting. During the Term, all stock options held by Consultant
shall continue vest in accordance with their terms and may be exercised in
accordance with the terms of the applicable Company option plan. Upon
termination of this Agreement, Consultant's options shall cease to vest and
shall be exercisable only for the period following termination set forth in the
applicable Company option plan. Consultant shall not be eligible to participate
in the Company's employee stock purchase plans.

        Promptly following the last day of each calendar month during the Term,
Consultant shall submit to the Company a written invoice for Services and
expenses, and such statement shall be subject to the approval of the contact
person listed above or other designated agent of the Company.


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Accepted and agreed as of January 10, 2002


CONSULTANT                                ARGONAUT TECHNOLOGIES, INC.


--------------------------------          --------------------------------
John T. Supan                             Lissa Goldenstein
                                          President and Chief Executive Officer


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