Exhibit 10.2
CONSULTING AGREEMENT
DATE: March 28, 2006, to be effective as of February 14, 2006.
BETWEEN: Rotary Engine Technologies, Inc.
0000 Xxxxxxxx Xxx, Xxxxx 000
Xxxx, XX 00000-0000 ("Company")
AND: Xxxxx Xxxxxx
0000 Xxxxxx Xxxxx
Xxxxxxx, XX 00000 ("Xxxxxx")
RECITALS
Xxxxxx desires to provide certain consulting and advisory services to
the Company and the Company desires to retain Xxxxxx to perform such services
pursuant to the terms and conditions of this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants referred to
herein, the parties agree as follows:
AGREEMENT
1. RETENTION OF XXXXXX. The Company hereby retains Xxxxxx to perform,
and Xxxxxx hereby agrees to perform, consulting and advisory services for the
Company upon the terms and conditions of this Agreement.
2. TERM. The term of this Agreement shall commence on the date of this
Agreement and shall continue for sixty (60) months thereafter, subject to annual
renewals, unless earlier terminated in accordance with Section 9 of this
Agreement.
3. DUTIES OF XXXXXX. Xxxxxx agrees to provide certain consulting and
advisory services ("Services"), more specifically described in the attached
Exhibit "A", which is incorporated by reference. The Services shall be rendered
over a period of time and in such reasonable manner as may be mutually agreed
upon between the Company and Xxxxxx, consistent with Xxxxxx'x other activities
and businesses. The Services shall not be in connection with the offer and sale
of securities of the Company in a capital raising transaction, nor shall such
services directly or indirectly promote or maintain a market for any of the
Company's securities.
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4. COMPENSATION OF XXXXXX.
4.1 CASH COMPENSATION. The annual cash compensation to be paid
to Xxxxxx for services rendered under this Agreement shall be Sixty Thousand
Dollars ($60,000.00), payable monthly. The initial annual compensation shall be
increased to $120,000.00 at such time as Aqua Xtremes, Inc., of which the
Company is a wholly-owned subsidiary, shall have either (a) delivered a minimum
of three hundred (300) Xboards(TM) per month to customers for a period of two
(2) consecutive months; or (b) completed the production, sale, and delivery of
one of the Company's engines; or (c) completed the sale and delivery of three
thousand (3,000) 407 or 814 Wankel engines.
4.2 NON-CASH COMPENSATION. As additional compensation,
Encompass Holdings, Inc., of which the Company is a second-tier subsidiary,
shall issue to Xxxxxx its common stock ("Encompass Shares") in an amount equal
to $100,000 based on the closing bid price of the Encompass Shares as quoted on
the OTC Bulletin Board on the date of issuance of the Encompass Shares.
5. EXPENSES. Xxxxxx shall be entitled to reimbursement from the Company
for reasonable expenses necessarily incurred by Xxxxxx in the performance of
Xxxxxx'x services under this Agreement, upon presentation of vouchers indicating
in detail the amount and business purpose of each such expense and upon
compliance with the Company's reimbursement policies established from time to
time.
6. REGISTRATION STATEMENT. The Company shall take all corporate action
necessary to file and have declared effective a registration statement on Form
S-8, or any successor forms, with the United States Securities and Exchange
Commission, covering the issuance to Xxxxxx of the Encompass Shares.
7. LIABILITY/INDEMNIFICATION.
(a) The Company agrees that Xxxxxx shall not be liable for any
damages or injury to the Company or any of its employees, agents or
representatives or for the loss of or damage to the property of the Company, in
any manner based upon the performance of duties under this Agreement, unless
such injury, loss or damage is caused by the intentional misconduct of Xxxxxx.
(b) The Company agrees to indemnify and hold Xxxxxx harmless
for any claims, loss, damage or costs, including attorney's fees, which are
asserted against or incurred by Xxxxxx and which are a result of the duties
performed by Xxxxxx for the Company, unless caused by the intentional misconduct
of Xxxxxx.
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(c) Xxxxxx agrees to indemnify and hold the Company, its
officers, directors, employees, agents and representatives harmless for any
claims, loss, damage or costs, including attorney's fees, which are asserted
against or incurred by The Company and which are a result of the duties
performed by Xxxxxx for the Company, unless caused by the intentional misconduct
of the Company.
8. CONFIDENTIALITY.
8.1 CONFIDENTIALITY. Xxxxxx acknowledges and agrees that all
planning information, lists of the Company's clients, financial information, and
other Company data related to its business ("Confidential Information") are
valuable assets of the Company. Except for information that is a matter of
public record, Xxxxxx shall not, during the term of this Agreement or after the
termination of employment with the Company, disclose any Confidential
Information to any person or use any Confidential Information for the benefit of
Xxxxxx or any other person, except with the prior written consent of the
Company.
8.2 RETURN OF DOCUMENTS. Xxxxxx acknowledges and agrees that
all originals and copies of records, reports, documents, lists, plans, drawings,
memoranda, notes, and other documentation related to the business of the Company
or containing any Confidential Information shall be the sole and exclusive
property of the Company, and shall be returned to the Company upon the
termination of employment with the Company or upon the written request of the
Company.
8.3 INJUNCTION. Xxxxxx agrees that it would be difficult to
measure damages to the Company from any breach by Xxxxxx of subsections 8.1 or
8.2 and that monetary damages would be an inadequate remedy for any such breach.
Accordingly, Xxxxxx agrees that if Xxxxxx shall breach or take steps preliminary
to breaching subsections 8.1 or 8.2, the Company shall be entitled, in addition
to all other remedies it may have at law or in equity, to an injunction or other
appropriate orders to restrain any such breach, without showing or proving any
actual damage sustained by the Company.
8.4 NO RELEASE. Xxxxxx agrees that the termination of
employment with the Company shall not release Xxxxxx from any obligations under
subsections 8.1, 8.2 or 8.3 of this Section 8.
9. TERMINATION.
9.1 TERMINATION BY PRIOR NOTICE. The services of Xxxxxx may be
terminated either by the Company, for cause, or by Xxxxxx, upon the giving of
seven (7) days' prior written notice to the other party. In addition, this
Agreement may be terminated at any time upon the mutual written agreement of the
Company and Employee. "For cause" shall be defined as the occurrence of any one
of the following events:
9.2.1 Xxxxxx willfully and continuously fails or
refuses to comply with
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the policies, standards, and regulations of the Company established from time to
time;
9.2.2 Xxxxxx engages in fraud, dishonesty, or any
other act of misconduct in the performance of Xxxxxx'x duties on behalf of the
Company;
9.2.3 Xxxxxx fails to perform any provision of this
Agreement to be performed by Xxxxxx;
9.2.4 All or substantially all the assets of the
Company are sold, transferred, or otherwise disposed of, the Company's assets
are distributed to its shareholders in liquidation, or the Company's business is
discontinued; or
9.2.5 Xxxxxx suffers a permanent disability. For
purposes of this Agreement, "permanent disability" shall be defined as Xxxxxx'x
inability, due to illness, accident, or other cause, to perform the majority of
Xxxxxx'x services for a period of ninety (90) days or more despite reasonable
accommodation by the Company.
9.3 PRORATION OF ANNUAL COMPENSATION. Upon the termination of
Xxxxxx'x services hereunder, the then current annual compensation payable to
Xxxxxx pursuant to Section 2.1 of this Agreement shall be prorated to the date
of such termination.
10. COVENANT NOT TO COMPETE. During the term of this Agreement, and for
a period of one (1) year hereafter, Xxxxxx shall not, directly or indirectly, as
proprietor, partner, limited partner, member of a limited liability company,
shareholder, officer, director, Xxxxxx, agent or representative, engage in a
Competitive Business Activity within the United States. "Competitive Business
Activity" shall mean the usual and customary products and services provided by
the Company. In addition, during the term of his employment under this
Agreement, and for a period of one (1) year thereafter, Xxxxxx shall not,
directly or indirectly, hire the employees of the Company to engage in a
Competitive Business Activity within the United States nor shall Xxxxxx solicit
any employees or customers to leave the Company.
11. REPRESENTATIONS AND WARRANTIES OF XXXXXX. Xxxxxx represents and
warrants to the Company that there is no employment contract or any other
contractual obligation to which Xxxxxx is subject which prevents Xxxxxx from
entering into this Agreement or from performing fully Xxxxxx'x services under
this Agreement.
10. MISCELLANEOUS PROVISIONS.
10.1 The wavier by either the Company or Xxxxxx of a breach of
any provision of this Agreement will not operate by either the Company as a
waiver of any subsequent breach by either the Company or Xxxxxx.
10.2 This Agreement shall be binding upon and shall inure to
the benefit of
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both the Company and Xxxxxx and then respective successors, heirs, and legal
representatives; however, neither this Agreement nor any rights hereunder may be
assigned by either the Company or Xxxxxx without the written consent of the
other party.
10.3 No amendment or variation of the terms and conditions of
this Agreement shall be valid unless it is in writing and signed by the Company
and Xxxxxx.
10.4 All notices required or permitted to be given under this
Agreement shall be in writing. Notices may be served by certified or registered
mail, postage prepaid with return receipt requested; by private courier,
prepaid; by telex, facsimile or other telecommunications device capable of
transmitting or creating a written record; or personally. Mailed notices shall
be deemed delivered ten (10) days after mailing, properly addressed. Notices
sent by courier shall be deemed delivered on that date the courier warrants the
delivery will occur. Telex or telecommunicated notices shall be deemed delivered
when receipt is either confirmed by confirming transmission equipment or
acknowledged by the addressee or its office. Personal delivery shall be
effective when accomplished. Unless a party changes its address by giving notice
to the other party as provided herein, notices shall be delivered to the parties
at the addresses first set forth above
10.5 In the event suit or action is instituted to enforce any
of the terms of this Agreement, the prevailing party shall be entitled to
recover from the other party such sum as the Court may adjudge reasonable as
attorney's fees at trial or on appeal, in addition to all other sums provided by
law.
10.6 This Agreement shall be interpreted and enforced in
accordance with the laws of the State of Nevada.
10.7 This Agreement constitutes the entire agreement and
understanding of the parties with respect to the subject matter hereof and
supercedes all prior oral or written agreements and understandings with respect
thereto.
10.8 This Agreement may be executed in several counterpart
copies, each of which shall be deemed an original and shall constitute one
agreement.
IN WITNESS WHEREOF, this Agreement is executed on the day and year
first above written.
ROTARY ENGINES TECHNOLOGIES, INC. Xxxxxx:
By:/s/ XXXXXX X. XXXXXX /s/ XXXXX XXXXXX
--------------------------------- -----------------------------------
Title: Chief Executive Officer Xxxxx Xxxxxx
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EXHIBIT "A"
DESCRIPTION OF CONSULTING SERVICES
All services involving the development of rotary engine technology and
rotary engines
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