Exhibit 10.38
CONSULTING AGREEMENT
This Agreement ("Agreement") entered into as of July 15, 2002 (the "Effective
Date") between Airos Group, Inc., an Ontario corporation, with offices at ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ (the "Consultant") and Smart Chip Technologies.,
a Florida corporation (the "Company"), with its principal executive offices at
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
WHEREAS, the Company is in the business of developing and commercially
exploiting smart card based loyalty systems including without limitation its
participation in the Solstice Scotiabank Project (the "Project"), and Consultant
represents that it has extensive experience in POS terminal application
development, technical project management, quality assurance management and
system integration applicable to the Project (the "Services"); and
WHEREAS, the Company desires to retain the services of the Consultant
to provide the Services (as hereinafter set forth) and the Consultant desires to
render the Services, upon the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the agreements and covenants
contained herein, the Consultant and the Company hereby agree as follows:
1. Employment
1.1 Appointment; Responsibilities.
(a) The Company hereby engages the Consultant to perform the
Services commencing as of the Effective Date, in accordance
with the terms and conditions herein. This Agreement shall be
for a term of three (3) months through October 15, 2002 (the
"Term") and shall be terminable on the terms and subject to
the conditions set forth in this Agreement and shall be
extendable by mutual agreement.
(b) The Consultant shall report to the Company representative
▇▇▇▇▇ ▇▇▇▇▇ or his designee.
1.2 Services. Consultant shall render Services to the Project as set
forth in Schedule I, attached hereto and as may be additionally required by
Company from time to time during the term of this Agreement. The terms for
provision of additional services shall be mutually agreed upon and Schedule I
shall be amended accordingly.
1.3 Representation and Warranty. Consultant represents and warrants to
the Company that the execution and delivery of this Agreement and the
fulfillment of the terms hereof (i) will not constitute a breach of any
agreement or other instrument to which Consultant is party, and (ii) does not
require the consent of any person. Additionally, Consultant represents and
warrants to the Company that it shall not utilize during the term of this
Agreement, any proprietary information of any third party, including prior
employers of the Consultant.
DS MR
2. Compensation
2.1 General. The Company shall compensate the Consultant for all of his
services under this Agreement, as set forth below.
2.2 Fees & Personnel. Commencing from the Effective Date, Consultant
shall be compensated for Services rendered at a rate of C$1,200 per actual
workday for each person engaged on behalf of Consultant in the Project (the
"Fee"). The C$1,200 will be payable as C$1,000 cash and $200 in stock. The stock
price will be equal to the closing stock price on the last business day of each
month. The first payment of cash and stock will be due on August 9, 2002. The
Consultant will be provided options on The Company stock at the rate of 100,000
shares each month, beginning on July 31, 2002, at a strike price equal to 100%
of the closing stock price on the last business day of the month. The options
will be issued monthly for the duration of this Agreement and are exercisable
within three years of issuance; for the first 30 days after issuance the options
are not exercisable. The Consultant shall not change the personnel designated in
Schedule I without the written consent of the Company. The Fee shall be payable
in arrears on the first day of each month for the preceding month, subject to
and immediately after receipt of an invoice detailing in reasonable specificity
the Fee owing and describing the specific Services performed . Consultant shall
be responsible for the payment of all taxes including without limitation, all
Canadian and provincial, income, unemployment, social security and medicare
taxes.
2.3 Deposit. Immediately subsequent to the effectiveness of this
Agreement, the Company shall deposit with the Consultant the sum of C$50,000 as
a security deposit (the "Security Deposit") for the Fees owing for the month of
October 2002, due August 9, 2002. Upon expiration of this Agreement, the
Security Deposit shall be applied first to any unpaid Fee due and owing the
Consultant. In the event that no Fees are due and owing to the Consultant or the
Agreement was either terminated by the Company for Cause (as defined below) or
terminated by Consultant for any reason other than for Cause, the Security
Deposit shall be promptly remitted to the Company.
3. Termination
3.1 Termination With effect from the Effective Date, this Agreement
shall end on the earlier of: (i) termination for Cause (as defined herein); (ii)
October 15, 2002.
3.2 Cause For the purpose of this Section 3, "Cause" shall exist if
(a) Consultant (i) substantially fails to perform the
Consultant's areas of responsibility set forth herein, (ii) engages
conduct which, in the sole discretion of the Company, is unethical,
illegal or which otherwise brings adverse notoriety to Company or has
an adverse effect on the name or public image of the Company, (iii)
fails to comply with the instructions of Company in a manner
detrimental to the Company, provided that with respect to clauses (i)
and (iii), if Consultant has cured any such condition (that is
reasonably susceptible to cure) within 15 days following delivery of
the advance notice (as defined herein) then "cause" shall be deemed not
to exist. For purposes of this Section 3, "advance notice" shall
constitute a written notice delivered to Consultant that sets forth
with particularity the facts and circumstances relied upon by the
Company as the basis for cause.
(b) (i) the Company fails to pay the Fee for a period of more
than 90 days from receipt of an invoice (ii) the Consultant is asked to
engage in conduct which is unethical or illegal.
DS MR
3.5 Termination Compensation Upon termination for Cause by the Company
or termination without Cause by the Consultant, Consultant shall be entitled to
the compensation set forth as the Fee herein, prorated to the effective date of
such termination. Upon termination for Cause by Consultant, Consultant shall be
entitled to retain all of the Security Deposit in lieu of any damages or
penalty.
4. Development Rights; Confidential Information; Non-competition
4.1 Development Rights
Consultant agrees and declares that all proprietary information
including but not limited to trade secrets, know-how, patents and other rights
in connection therewith developed by or with the contribution of Consultant's
efforts during the term of his provision of Services to the Company, shall be
the sole property of the Company. Upon the Company's request (whenever made),
Consultant shall execute and assign to the Company all the rights in the
proprietary information.
4.2 Confidentiality
(a) The term "Information" as used in this section means any and all
confidential and proprietary information including but not limited to any and
all specifications, formulae, prototypes, software design plans, computer
programs, and any and all records, data, methods, techniques, processes and
projections, plans, marketing information, materials, financial statements,
memoranda, analyses, notes, and other data and information (in whatever form),
as well as improvements and know-how related thereto, relating to the Company or
its products. Information shall not include information that (a) was already
known to or independently developed by Consultant prior to its disclosure as
demonstrated by reasonable and tangible evidence satisfactory to the Company;
(b) shall have appeared in any printed publication or patent or shall have
become part of the public knowledge except as a result of breach of this
Agreement by the Consultant or similar agreements by other Consultant's or
Company employees (c) shall have been received by the Consultant from another
person or entity having no obligation of confidentiality to the Company or (d)
is approved in writing by the Company for release by the Consultant.
(b) Consultant agrees to hold in trust and confidence all Information
disclosed to it and further agrees not to exploit or disclose the Information to
any other person or entity or use the Information directly or indirectly for any
purpose other than for Consultant's work with the Company.
(c) Consultant agrees to disclose the Information only to persons
necessary in connection with Consultant's work with the Company and who have
undertaken in writing the same confidentiality obligations set forth herein in
favor of the Company. Consultant agrees to assume full responsibility for the
confidentiality of the Information disclosed to Consultant and to prevent its
unauthorized disclosure, and shall take appropriate measures to ensure that such
persons acting on his behalf are bound by a like covenant of secrecy.
(d) Consultant acknowledges and agrees that the Information furnished
hereunder is and shall remain proprietary to the Company. Unless otherwise
required by statute or government rule or regulation, all copies of the
Information, shall be returned to the Company immediately upon request without
retaining copies thereof.
DS MR
5. Miscellaneous
5.1 Notices. All notices, requests or other communications provided for
in this Agreement shall be given to the addresses listed above
All notices, requests or other communications provided for in this
Agreement shall be made in writing either (a) by personal delivery to the party
entitled thereto, (b) by facsimile or electronic mail with confirmation of
receipt, (c) by mailing to the last known address of the party entitled thereto
or (d) by express courier service. The notice, request or other communication
shall be deemed to be received upon personal delivery, upon confirmation of
receipt of facsimile or electronic mail transmission or upon seven (7) days from
mailing from any national mail service or upon receipt if by express courier
service; provided, however, that if a notice, request or other communication is
not received during regular business hours, it shall be deemed to be received on
the next succeeding business day of the Company.
5.2 Assignment and Succession. This Agreement is personal to Consultant
and Consultant shall not assign or delegate his rights or duties to a third
party, whether by contract, will or operation of law, without the Company's
prior written consent.
5.3 Headings. The Article, Section, paragraph and subparagraph headings
are for convenience of reference only and shall not define or limit the
provisions hereof.
5.4 Invalidity. If any provision of this Agreement is or becomes
invalid, illegal or unenforceable in any respect under any law, the validity,
legality or enforceability of the remaining provisions hereof shall not in any
way be affected or impaired.
5.5 Waivers. No omission or delay by either party hereto in exercising
any right, power or privilege hereunder shall impair such right, power or
privilege, nor shall any single or partial exercise of any such right, power or
privilege, preclude any further exercise thereof, or the exercise of any other
right, power or privilege.
5.6 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
5.7 Entire Agreement. This Agreement contains the entire understanding
of the parties and supersedes all prior agreements and understandings relating
to the subject matter hereof. No representation, promise or inducement has been
made by either party hereto that is not embodied in this Agreement and neither
party shall be bound by or liable for any alleged representation, promise or
inducement not set forth herein. This Agreement may not be amended, except by a
written instrument hereafter signed by each of the parties hereto.
5.8 Interpretation. The parties hereto acknowledge and agree that each
party and its or his counsel reviewed and negotiated the terms and provisions of
this Agreement and have contributed to its drafting. Accordingly, (i) the rules
of construction to the effect that any ambiguities are resolved against the
drafting party shall not be employed in the interpretation of this Agreement,
and (ii) the terms and provisions of this Agreement shall be construed fairly as
to all parties hereto and not in favor of or against any party regardless of
which party was generally responsible for the preparation of this Agreement.
5.9 Governing Law. This Agreement and the performance hereof shall be
construed and governed in accordance with Ontario law without reference to
principles of conflict of laws.
DS MR
IN WITNESS WHEREOF, each of the Company and the Consultant has caused
this Agreement to be signed by its duly authorized officer as of the day and
year first above written.
SMART CHIP TECHNOLOGIES AIROS GROUP INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ Miki Radivojsa
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇ Name: Miki Radivojsa
Title: Chairman Title: President
Schedule I
Service/Resource Service Period
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Software Developer - ▇▇▇▇ ▇▇▇▇ From July 15, 2002 through October 15, 2002
Software Developer - ▇▇▇▇▇▇ ▇▇▇▇ From July 15, 2002 through October 15, 2002
Quality Assurance - TBA From August 15, 2002 through October 15, 2002
Quality Assurance - TBA From August 15, 2002 through October 15, 2002
