EXHIBIT 10.19
CONSULTING AGREEMENT WITH XXXX X. XXXXXXX
CONSULTING AGREEMENT
This Consulting Agreement is made this 1st day of July, 1996 by and
between Xxxx X. Xxxxxxx, Attorney at Law ("Consultant") and Xxxx Industries,
Inc., a Nevada corporation, with its principal offices at 0 Xxxx Xxxxx, Xxxxx
000, Xxxxxx, Xxxxxxxxxx 00000 ("Client").
WHEREAS,Consultant is an attorney licensed to practice law in the
State of California; and
WHEREAS,Consultant has served as an Officer and Director of Client
since July 31, 1993; and
WHEREAS, Consultant received shares and an option to purchase shares of
Client as compensation for services rendered to July 31, 1994; and
WHEREAS, Consultant has billed Client $2,000 per month for services
rendered from August 1, 1994 to the present; and
WHEREAS, the parties desire to memorialize the compensation due to
Consultant for past services rendered and to state the terms and conditions for
the rendering of future services through December 31, 1996.
NOW, THEREFORE, in consideration of mutual promises, covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledge, the Company and
Consultant agree as follows:
1. Prior and Future Services
The parties confirm that Consultant has been engaged to serve as
Secretary and Director of Client since July 31, 1993. The parties agree
that Consultant has been compensated with 166,666 shares of Client's
common stock for services rendered from July 31, 1993 to July 31, 1994.
This agreement confirms Consultant's engagement and confirms the
Consultant will be engaged in his present capacities through December
31, 1996.
2. Scope of Services to be Provided
The services provided shall consist of all corporate duties commonly
performed by the General Counsel and Secretary of a publicly held
company.
3. Term
This Agreement shall have a term expiring on December 31, 1996;
thereafter, this Agreement will automatically be extended on a month to
month basis (the "Extension Period") unless Consultant or Client shall
serve written notice on the other party terminating the Agreement.
Notice to terminate shall be in writing and shall be delivered at least
ten (10) days prior to December 31, 1996 or any subsequent Extension
Period as provided herein. In the event of termination pursuant to this
Paragraph 3, neither party shall have any further rights or obligations
hereunder after the effective date of such termination, except that the
obligation of Client to pay fees earned and to
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reimburse costs and expenses of Consultant incurred prior to the effective date
of termination in performance of the Services shall continue until such fees,
costs, and expenses are paid in full by Client.
4. Time and Effort of Consultant
Consultant shall devote that amount of working time, as necessary, on a
weekly basis, to fulfilling his obligations under this Agreement. The
particular amount of time may vary from day to day or week to week;
Client understands that Consultant has other clients which require some
of Consultant's professional time, but which do not conflict with
Consultant's obligations hereunder. Consultant agrees that he will at
all times, faithfully and to the best of his experience, ability, and
talents, perform all the duties required of him under this Agreement.
5. Compensation
Compensation to Consultant for the Services provided under this
Agreement shall consist of the following:
(A) Secretary's Fee. Commencing August 1, 1994, Consultant shall
be paid a base fee of $1,000 --------------- per month.
(B) Director's Fee. Commencing August 1, 1994, Consultant shall be
paid a base fee for serving as a member of Client's Board of
Directors, at the monthly rate of $1,000.
(C) Options. As incentive to execute this Agreement, and in
consideration of past services rendered, Client grants to
Consultant the option to purchase Client's common stock (the
"Option") consisting of 166,666 shares of Client's common
stock per each twelve month period commencing August 1, 1994
(the "Option Shares") exercisable at a price of $.01 per share
(the "Exercise Price"). Subject to Client's right to
terminate, as defined in Paragraph 12 hereunder, the right of
Consultant to exercise such Option will vest to Consultant
monthly in advance over each twelve month period beginning
August 1, 1994.
6. Registration of Option Shares
As soon as possible following the date hereof, Client will register the
Option Shares with the Securities and Exchange Commission under a Form
S-8 registration statement. At Client's sole discretion, Fee Shares may
be issued or reserved for issuance prior to registration in reliance on
exemptions from registration provided by Section 4(2) of the Securities
Act of 1933 (the "Act"), Regulation D of the Act, and applicable state
securities laws.
7. Costs and Expenses
Unless otherwise agreed and approved in writing between Consultant and
Client, all third party and out-of-pocket expenses, filing fees, copy,
and mailing expenses incurred by Consultant performing Services under
this Agreement are the responsibility of Consultant. Any expenses
incurred with the previous approval of Client in carrying out the
Services set forth under this Agreement shall be reimbursed by Client
within thirty (30) days of written notice by Consultant.
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8. Place of Services
The Services provided by Consultant hereunder will be performed
primarily through Client's offices in Irvine, California, except as
otherwise mutually agreed by Consultant and Client. It is understood
and expected that Consultant may make contacts with persons and
entities and perform services in other locations as deemed appropriate
and directed by Client.
9. Independent Contractor
Consultant will act as an independent contractor in the performance of
duties under this Agreement. Accordingly, Consultant will be
responsible for payment of all federal, state, and local taxes on
compensation paid under this Agreement, including income and social
security taxes, unemployment insurance, and any other taxes or business
license fees as may be required.
10. No Agency Express or Implied
This Agreement neither expressly nor impliedly creates a relationship
of principal and agent between Consultant and Client. Consultant is not
authorized to enter into any agreements on behalf of Client. Client
expressly retains the right to approve, in its sole discretion, any and
all transactions introduced by Consultant (if any) and to make all
final decisions with respect to activities undertaken by Consultant
related to this Agreement.
11. Nondisclosure and Nonuse of Confidential Information
Consultant agrees that non-public information concerning the finances,
plans, strategies, and overall business operations of Client is highly
confidential and proprietary to Client ("Confidential Information").
This Confidential Information includes, but is not limited to, the
following:
(A) Non-public information related to the business operations,
including financial and accounting information, plans of
operations, and potential mergers or acquisitions prior to the
public announcement of Client;
(B) Customer lists, call lists, and other non-public customer data
of Client;
(C) Memoranda, notes, records, sketches, plans, drawings, and any
media used to store, communicate, transmit, record, or embody
such Confidential Information of Client;
(D) Information treated, marked, or otherwise identified by Client
as confidential or as trade secrets.
Consultant acknowledges that such Confidential Information represents a
legitimate, valuable, and protectable interest of Client and gives
Client a competitive advantage, which would otherwise be lost if the
Confidential Information was improperly disclosed. Consultant further
acknowledges that unauthorized or improper disclosure or use of
Confidential Information would cause Client irreparable harm and
injury. Consultant therefore agrees that, in perpetuity or for as long
as the Confidential Information remains confidential, he will not
disclose or threaten to disclose the Confidential Information to any
person, partnership, company, corporation, or to any other business
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or governmental organization or agency without the express written
consent of Client, as the case may be. Consultant further agrees not to
use or threaten to use the Confidential Information in any way that is
not specifically authorized by, or otherwise contrary to the interests
of Client, as the case may be. Consultant agrees that unauthorized
disclosure or use of Confidential Information constitutes
misappropriation of trade secrets and confidential information.
Consultant further agrees that all ownership rights to the Confidential
Information are held or retained by Client, as the case may be, and
that no right of ownership shall pass to Consultant by virtue of this
Agreement or the services provided hereunder.
12. Termination
(A) Termination for Disability. If prior to December 31, 1996,
Consultant shall be unable to provide the services as set
forth under this Agreement for twenty (20) business days
because of illness, accident, or other incapacity, Client
shall have the right to terminate this Agreement upon written
notice to Consultant within ten (10) days after the end of any
such 20-day period. Termination under this Paragraph 12(A)
shall be effective upon receipt by Consultant of such written
notice.
(B) Death. In the event of Consultant's death, this Agreement and
all rights and obligations hereunder shall immediately be
terminated.
(C) Termination for Cause. The Client may, at its option,
terminate this Agreement by giving written notice of
termination to Consultant without prejudice to any other
remedy to which the Client may be entitled either at law, in
equity, or under this Agreement, if Consultant:
(i) Willfully breaches or neglects the duties, or fails to
timely provide the Services as required under the terms
of this Agreement;
(ii) Fails to promptly comply with and carry out the
directives of Client's Board of Directors;
(iii)Commits any dishonest or unlawful act, in the judgment
of Client's Board of Directors.
(D) Termination Other Than For Cause. This Agreement shall
terminate immediately on the occurrence of any one of the
following events:
(i) The occurrence of circumstances, in the judgment of
Client's Board of Directors, that make it impracticable
for Client to continue its present line(s) of business;
(ii) The decision of and upon notice by Consultant to
voluntarily terminate this Agreement;
(iii) The loss by Consultant of legal capacity;
(iv) If either party files a petition in a court of
bankruptcy or is adjudicated a bankrupt;
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(v) If either party institutes, or has instituted against
it any bankruptcy proceeding for reorganization for
rearrangement of the party's financial affairs;
(vi) If either party has a receiver of the party's assets or
property appointed because of insolvency;
(vii)If either party makes a general assignment for the
benefit of creditors; or
(viii) If either party otherwise becomes insolvent or unable
to timely satisfy all obligations in the ordinary
course of business.
(E) Effect of Termination on Compensation. In the event of the
termination of this Agreement for Other Than Cause prior to
December 31, 1996, Consultant shall be entitled to the
compensation earned, and to the Option Shares accrued prior to
the date of termination as provided for in this Agreement.
Consultant shall be entitled to no further compensation after
the date of termination.
13. Representations and Warranties of Client
Client represents and warrants to Consultant that:
(A) Corporate Existence. Client is a corporation duly organized,
validly existing, and in good standing under the laws of the
State of Nevada, with corporate power to own property and
carry on its business as it is now being conducted.
(B) No Conflict. This Agreement has been duly executed by Client
and the execution and performance of this Agreement will not
violate, or result in a breach of, or constitute a default in
any agreement, instrument, judgment, decree or order to which
Client is a party or to which Client is subject, nor will such
execution and performance constitute a violation or conflict
of any fiduciary duty to which Client is subject.
(C) Date of Representations and Warranties. Each of the
representations and warranties of Client set forth in this
Agreement is true and correct at and as of the date of
execution of this Agreement.
14. Representations and Warranties of Consultant
Consultant represents and warrants to Client that:
(A) Prior Experience. Consultant has extensive experience in the
practice of general business and securities law.
(B) No Conflict. This Agreement has been duly executed by
Consultant and the execution and performance of this Agreement
will not violate, or result in a breach of, or constitute a
default in any agreement, instrument, judgment, decree or
order to which Consultant is a party or to which Consultant is
subject, nor will such execution and performance constitute a
violation or conflict of any fiduciary duty to which
Consultant is subject.
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(C) Date of Representations and Warranties. Each of the
representations and warranties of Consultant set forth in this
Agreement is true and correct at and as of the date of
execution of this Agreement.
15. Indemnification
Client and Consultant agree to indemnify, defend and hold each other
harmless from and against all demands, claims, actions, losses,
damages, liabilities, costs and expenses, including without limitation,
interest, penalties and attorneys' fees and expenses asserted against
or imposed or incurred by either party by reason of or resulting from a
breach of any representation, warranty, covenant, condition, or
agreement of the other party to this Agreement. Client and Consultant
agree to execute a separate Indemnification Agreement.
16. Agreement Does not Contemplate Corrupt Practice - Domestic or Foreign
Any and all payments under this Agreement constitute compensation for
services performed and this Agreement and all payments and the use of
the payments by Consultant, do not and shall not constitute an offer,
payment, or promise or authorization of payment of any money or gift to
an official or political party of, or candidate for political office in
any jurisdiction within or outside the United States. These payments
may not be used to influence any act or decision of an official, party
or candidate to use his/her/its influence with a government to assist
Client in obtaining, retaining, or directing business to Client, or any
person or other corporate entity. As used in this paragraph, the term
"official" means any officer or employee of a government, or any person
acting in an official capacity for or on behalf of any government; the
term "government" includes any department, agency, or instrumentality
of a government.
17. Inside Information - Securities Laws Violations
In the course of the performance of his duties, Consultant may become
aware of information which may be considered "inside information"
within the meaning of the Federal Securities Laws, Rules and
Regulations. Consultant acknowledges that his use of such information
to purchase or sell securities of Client, or its affiliates, or to
transmit such information to any other party with a view to buy, sell
or otherwise deal in the securities of Client or its affiliates is
prohibited by law and would constitute a breach of this Agreement and
notwithstanding the provisions of this Agreement, will result in the
immediate termination of the Agreement.
18. Miscellaneous
(A) Subsequent Events. Consultant and Client each agree to notify
the other party if, subsequent to the date of this Agreement,
either party incurs obligations which could compromise their
efforts and obligations under this Agreement.
(B) Amendment. This Agreement may be amended or modified at any
time and in any manner only by an instrument in writing
executed by the parties hereto.
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(C) Further Actions and Assurances. At any time and from time to
time, each party agrees, at its or their expense, to take
actions and to execute and deliver documents a may be
reasonably necessary to effectuate the purposes of this
Agreement.
(D) Waiver. Any failure of any party to this Agreement to comply
with any of its obligations, agreements, or conditions
hereunder may be waived in writing by the party to whom such
compliance is owed. The failure of any party to this Agreement
to enforce at any time any of the provisions of this Agreement
shall in no way be construed to be a waiver of any such
provision or a waiver of the right of such party thereafter to
enforce each and every such provision. No waiver of any breach
of or non-compliance with this Agreement shall be held to be a
waiver of any other or subsequent breach or non-compliance.
(E) Assignment. Neither this Agreement nor any right created by it
shall be assignable by Consultant without the prior written
consent of Client.
(F) Notices. Any notice or other communication required or
permitted by this Agreement must be in writing and shall be
deemed to be properly given when delivered in person to an
officer of the other party, when deposited in the United
States mails for transmittal by certified or registered mail,
postage prepaid, or when deposited with a public telegraph
company for transmittal, or when sent by facsimile
transmission charges prepared, provided that the communication
is addressed:
(1) In the case of Client:
Xxxx Industries, Inc.
0 Xxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
Telephone: (000) 000-0000
Telefax: (000) 000-0000
(2) In the case of Consultant:
Xxxx X. Xxxxxxx
0000 Xxxxxxx
Xxxxxxx Xxxxx, XX 00000
(000) 000-0000
or to such other person or address designated by Client or Consultant
to receive notice.
(G) Headings. The paragraph and subparagraph headings in this
agreement are inserted for convenience only and shall not
affect in any way the meaning or interpretation of this
Agreement.
(H) Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and
the same instrument.
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(I) Governing Law. This Agreement was negotiated and is being
contracted for in the State of California, and shall be
governed by the laws of the State of California,
notwithstanding any conflict-of-law provision to the contrary.
(J) Binding Effect. This Agreement shall be binding upon the
parties hereto and inure to the benefit of the parties, their
respective heirs, administrators, executors, successors, and
assigns.
(K) Entire Agreement. This Agreement contains the entire agreement
between the parties hereto and supersedes any and all prior
agreements, arrangements, or understandings between the
parties relating to the subject matter of this Agreement. No
oral understandings, statements, promises, or inducements
contrary to the terms of this Agreement exist. No
representations, warranties, covenants, or conditions, express
or implied, other than as set forth herein, have been made by
any party.
(L) Severability. If any part of this Agreement is deemed to be
unenforceable the balance of the Agreement shall remain in
full force and effect.
(M) Facsimile Counterparts. A facsimile, telecopy, or other
reproduction of this Agreement may be executed by one or more
parties hereto and such executed copy may be delivered by
facsimile of similar instantaneous electronic transmission
device pursuant to which the signature of or on behalf of such
party can be seen, and such execution and delivery shall be
considered valid, binding and effective for all purposes. At
the request of any party hereto, all parties agree to execute
an original of this Agreement as well as any facsimile,
telecopy or other reproduction hereof.
(N) Termination of Any Prior Agreements. Effective the date
hereof, all prior rights of Consultant relating to the accrual
or payment of any form of compensation or other benefits from
Client based upon any agreements other than this Agreement,
whether written or oral, entered into prior to the date
hereof, are hereby terminated.
(O)Consolidation or Merger. Subject to the provisions of Paragraph 12
hereof, in the event of a sale of the stock, or substantially all
of the stock, of Client, or consolidation or merger of Client
with or into another corporation or entity, or the sale of
substantially all of the operating assets of the Client to
another corporation, entity or individual, Client may assign its
rights and obligations under this Agreement to its
successor-in-interest and such successor-in-interest shall be
deemed to have acquired all rights and assumed all obligations of
Client hereunder; provided, however, that in no event shall the
duties and services of Consultant provided for in Paragraph 2
hereof, or the responsibilities, authority or powers commensurate
therewith, change in any material respect as a result of such
sale of stock, consolidation, merger or sale of assets.
(P) Time is of the Essence. Time is of the essence of this
Agreement and of each and every provision hereof.
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IN WITNESS WHEREOF, the parties have executed this Agreement
on the date above written.
"Consultant"
/s/ Xxxx X. Xxxxxxx
--------------------------------------------
Xxxx X. Xxxxxxx
"Client"
XXXX INDUSTRIES, INC.
a Nevada corporation
By:----------------------------------------
Name: Xxxx X. Xxxx
Title: President
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