CONSULTING AGREEMENT Exhibit 10.60
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This Consulting Agreement (hereinafter "Agreement") dated as of May 1, 2002,
between XXXXXX XXXXXXXXXX, INC., a corporation organized and existing under the
laws of the State of Delaware (hereinafter "Corporation") and COSMIX, INC. 000
Xxxx 00xx Xxxxxx, Xxx Xxxx 00000 (hereinafter "Consultant"), and Xxxxxxxxx X.
Xxxxxxx (hereinafter "Purches"), the President of Consultant residing at 000
Xxxx 00xx Xxxxxx Xxx Xxxx, Xxx Xxxx 00000. Collectively hereinafter referred to
as "Parties".
WHEREAS, Corporation, Consultant and Purches are parties to a Consulting
Agreement extending through March 31, 2003 which is hereby terminated without
liability to either party.
WHEREAS, the parties wish to enter into a new Consulting Agreement under revised
terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual understanding set forth herein,
the Parties agree as follows:
1. Consultant's Duties: The Corporation hereby engages the Consultant as its
business and financial consultant. Subject at all times to the control and
direction of the Corporations's Chief Executive Officer, Chief Operating Officer
and Chief Financial Officer (hereinafter Management), the Consultant shall have
the duties as the general advisor and consultant to Management on all matters
pertaining to the business and to render all other services relevant thereto.
The Consultant, by Purches, shall perform all other duties that may be
reasonably assigned to it by Management provided said duties be consistent with
the prestige and responsibility of Purches's position. The Consultant shall,
through its agents, servants and employees, devote its best efforts at all times
necessary to perform its duties and to advance the Corporation's best interests,
subject to reasonable vacations. The Consultant and the Corporation acknowledge
that the Consultant and its agents, servants and employees have other business
interests and shall not be required to devote its exclusive time and attention
to the performance of its duties hereunder.
2. Term: Unless sooner terminated as provided in Section 7 below, this
Agreement shall be for a term of three (3) years and eleven (11) months
commencing as of May 1, 2002 and ending on March 31, 2006; provided however,
that the term of this Agreement shall be automatically extended on the same
terms and conditions for a one year period and from year to year thereafter
unless either the Corporation or the Consultant shall give written notice of the
termination of this Agreement to the other at least six (6) months prior to the
expiration of said term or extended term.
3. Compensation: For all services rendered by the Consultant under this
Agreement, the Corporation shall pay to Consultant as compensation the sum of
$125,000 per annum, payable in equal bi-weekly installments of $4,807.69.
4. Health and Life Insurance: The Corporation shall, at no cost to the
Consultant or Purches, provide Purches with full health insurance, basic, major
medical and dental as well as group life insurance. Said coverage shall be
identical to that afforded the Corporation's Management.
5. Expenses: Consultant will be reimbursed by the Corporation for all
reasonable business expenses incurred by the Consultant in the performance of
its duties. Said reimbursement shall be made no less frequently than monthly
upon submission by the Consultant of a written request for same.
CONSULTING AGREEMENT
Page 2
6. Stock Options (Warrants): Purches shall be granted non qualified stock
options (warrants) to purchase 30,000 shares of Corporation's common stock at an
exercise price of $1.86 per share being the closing price of the shares of
common stock on April 30, 2002. The options (warrants) shall be exercisable at
the rate of 10,000 on March 31, 2004, 10,000 on March 31, 2005 and 10,000 on
March 31, 2006. Each option (warrant) shall be exercised within a period of ten
(10) years after the date of the grant unless earlier terminated in accordance
with its terms or those of this Agreement. The rights of Purches with respect to
any stock option (warrant) granted to Purches shall be determined exclusively by
the plans and agreements relating to the options (warrants) and this Agreement
shall not affect, in any way, the rights and obligations of the plans and
agreements.
7. Early Termination: The Corporation may terminate the Consultant's
relationship under this Agreement prior to the expiration of the term set forth
in Section 2 above only under the following circumstances:
i. Death. Upon the death of Purches.
ii. Disability. If, as a result of Purches's incapacity due to
physical or mental illness, Purches having been unable to
perform his duties under this Agreement for a period of six
consecutive calendar months, then thirty (30) days after
written notice of termination is given to Consultant (which
may only be given after the end of the six consecutive
calendar month period) provided that Purches has not returned
to his duties under this Agreement.
iii. Cause. For Cause. The Corporation shall have "Cause" to
terminate this Agreement upon
(a) the willful and continued failure by Consultant to
substantially perform its duties under this Agreement (other
than any failure resulting from Purches's incapacity due to
physical or mental illness) for thirty (30) days after written
demand for substantial performance is delivered by the
Corporation specifically identifying the manner in which the
Corporation believes Consultant has not substantially
performed its duties, or (b) the willful engaging by
Consultant or Purches in misconduct (including embezzlement
and criminal fraud) which is materially injurious to the
Corporation, or (c) the conviction of Purches of a felony. For
purposes of this paragraph, no act, or failure to act, by the
Consultant shall be considered "willful" unless done or
omitted to be done, by Consultant not in good faith and
without reasonable belief that its action or omission was in
the interest of the Corporation. Consultant shall not be
deemed to have been terminated for Cause unless and until
there shall have been delivered to Consultant a copy of a
resolution, duly adopted by the affirmative vote of a majority
of the entire membership of the Board of Directors (Board) at
a meeting of the Board called and held for such purpose (after
a reasonable notice to the Consultant and an opportunity for
Consultant, together with its counsel, to be heard before the
Board), finding that in the good faith opinion of the Board,
Consultant was guilty of conduct set forth above and
specifying the particulars of the conduct in detail.
CONSULT1NG AGREEMENT
Page 3
iv. Termination by Consultant or Purches. Consultant or
Purches may terminate this Agreement (a) for Good Reason (as
defined below) or (b) Purches's health should become impaired
to any extent that makes the performance of his duties under
this Agreement hazardous to his physical or mental health or
his life, provided that Purches shall have furnished the
Corporation with a written statement from a qualified doctor
to that effect and provided further that at the Corporation's
request and expense Purches shall submit to an examination by
a doctor selected by the Corporation, and the doctor shall
have concurred in the conclusion of Purches's doctor.
Consultant shall give the Corporation thirty (30) days prior
written notice of its intent to terminate this agreement.
"Good Reason" means the Corporation has had a Change in
Control. For purposes of this Agreement, a Change in Control
means the occurrence of an event or series of events (whether
or not approved by the Board) by which any person or other
entity or group of persons or other entities acting in concert
as determined in accordance with Section 12(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange
Act"), whether or not applicable, together with its or their
affiliates or associates shall, as a result of a tender offer
or exchange offer, open market purchases, privately negotiated
purchases, merger or otherwise (including pursuant to receipt
of revocable proxies) (a) be or become directly or indirectly
the beneficial owner (within the meaning of Rule 13d-3 and
Rule 13d-5 under the Exchange Act, whether or not applicable,
except that a person shall be deemed to have beneficial
ownership of all securities that such person has the right to
acquire whether such right is exercisable immediately or only
after the passage of time) of more than thirty (30) percent of
the combined voting power of the then outstanding common stock
of the Corporation or (b) otherwise have the ability to elect,
directly or indirectly, a majority of the Board.
v. Notice of Termination. Any termination of this Agreement
shall be communicated by written Notice of Termination to the
other party of this Agreement. "Notice of Termination" means a
notice which indicates the specific termination provision in
this Agreement relied upon and shall set forth in reasonable
detail the facts and circumstances claimed to provide a basis
for the termination of the Consultant's retention under the
provision so indicated.
vi. Date of Termination. Date of termination means (a) if the
Agreement is terminated by Purches's death, the date of his
death, (b) if the Consultant's retention is terminated
pursuant to subsection 7(iii)(a) above, thirty (30) days after
Notice of Termination is given provided that Purches shall not
have returned to the performance of his duties during the
thirty (30) day period, (c) if the Consultant's retention is
terminated pursuant to subsection 7(iii)(c) above, the date
specified in the Notice of Termination after the expiration of
any cure periods, and (d) if the Consultant's retention is
terminated for any other reason, the date on which Notice of
Termination is given.
CONSULTING AGREEMENT
Page 4
8. Compensation Upon Termination or During Disability:
i. Upon Purches's death, the Corporation shall pay to the person
designated by Consultant in a notice filed with the
Corporation or, if no person is designated, to Purches's
estate as a lump sum death benefit, Consultant's full
compensation for a period of six (6) months after the date of
Purches's death. Upon full payment of amounts required to be
paid under this subsection, the Corporation shall have no
further obligation under this Agreement.
ii. During any period that Purches fails to perform his duties
under this Agreement as a result of incapacity due to physical
or mental illness, Consultant shall continue to receive its
full compensation until the Consultant's relationship is
terminated pursuant to Section 7(ii) of this Agreement, or
until Consultant shall receive a lump sum of six months'
compensation.
iii. If the Consultant's retention is terminated for Cause as
defined in subsection 7(iii), the Corporation shall pay the
Consultant its compensation through the date of termination at
the rate in effect at the time Notice of Termination is
delivered and the Corporation shall have no further obligation
to Consultant under this Agreement.
iv. If (a) in breach of this Agreement, the Corporation shall
terminate the Consulting relationship other than pursuant to
Sections 7(iii)(b) or 7(iii)(c) (it being understood that a
purported termination pursuant to Sections 7(iii)(b) or
7(iii)(c) which is disputed and finally determined not to have
been proper shall be a termination by the Corporation in
breach of this Agreement), or (b) the Consultant shall
terminate the relationship for Good Reason, then
(1) The Corporation shall pay the Consultant its full
compensation through the date of termination at the rate then
in effect at the time Notice of Termination is given through
the end of the Term;
(2) In the event of a Change in Control as defined in Section
7(iv), the Corporation shall pay Consultant, in a lump sum, an
amount equal to the greater of (a) twice the amount then due
through the end of the Term; or (b) two times the annual
compensation paid to Consultant.
(3) In the event of a Change in Control of the Corporation as
defined in Section 7(iv) above, the total number of
outstanding unexercised options (warrants) granted to
Consultant under this Agreement as well as any previous
employment, consultant or other agreements, shall be doubled
in quantity while retaining the original exercise price.
(4) The Corporation shall pay all reasonable legal fees and
expenses incurred by Consultant in contesting or disputing any
such termination or in seeking to obtain or enforce any right
or benefit in this Agreement.
CONSULTING AGREEMENT
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v. Unless the Consultant is terminated for Cause, the Corporation
shall maintain in full force and effect, for the continued
benefit of Consultant for the greater of the remaining term of
this Agreement or eighteen (18) months after termination of
this Agreement, all health and hospitalization plans and
programs in which Consultant was entitled to participate in
immediately prior to the Date of Termination as defined in
Section 4 of this Agreement, provided that Consultant's
continued participation is possible under the general terms
and provisions of the plans and programs. If Consultant's
participation in any plan or program is barred, the
Corporation shall arrange to provide the Consultant with
benefits substantially similar to those which Consultant would
otherwise have been entitled to receive under the plan and
program from which his continued participation is barred.
9. Savings Clause: The determination that any provision of this Agreement is
unenforceable shall not terminate this Agreement or otherwise affect the other
provisions of this Agreement, it being the intention of the parties hereto that
this Agreement shall be construed to permit the equitable reformation of such
provision to permit the enforcement thereof, if possible, and otherwise to
permit the enforcement of the remaining provisions of this Agreement as if such
unenforceable provision were not included herein.
10. Equitable Relief: The parties hereto agree and declare that legal remedies
may be inadequate to enforce the provisions of this Agreement and that equitable
relief, including specific performance and injunctive relief, may be used to
enforce the provisions of this Agreement.
11. Notice: Any notice required or permitted to be given under this Agreement
shall be in writing and shall be deemed to have been given and received on the
date when personally delivered or deposited in the United States Mail,
registered postage prepaid, addressed:
a. if to the Corporation to: Xx. Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Inc. 0000 X.X. 00xx Xxxxxx Xxxx Xxxxxxxxxx, XX
00000
b. if to the Consultant or Purches to: Xx. Xxxxxxxxx Xxxxxxx
000 Xxxx 00xx Xxxxxx Xxx Xxxx, Xxx Xxxx 00000
or to such other address as the Corporation or the Consultant may designate in
writing.
12. Amendments: This Agreement may be amended or modified only by a writing.
13. Governing Law: This Agreement shall be governed and construed under the laws
of the State of Florida.
14. Entire Agreement: This Agreement constitutes the entire Agreement between
the Consultant, Purches and the Corporation, with respect to its subject matter,
and all prior and other agreements between them, oral or written concerning the
same subject matter are merged into this Agreement and thus extinguished.
CONSULTING AGREEMENT
Page 6
15. Survival of Covenants: Any of the provisions in this Agreement which would
by their terms continue after the termination of this Agreement shall be deemed
to survive such termination.
16. Assignability and Binding Effect: This Agreement shall be binding upon and
inure to the benefit of the Corporation and its successors and assigns. This
Agreement may not be assigned by either party without the written consent of the
other party hereto.
IN WITNESS WHEREOF, the parties have hereunto set their hands and seals as of
the date first written above.
XXXXXX XXXXXXXXXX, INC.
By: /s/ Xxxx Xxxxxx
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Xxxx Xxxxxx, Chief Executive Officer
Consultant:
COSMIX INC
By: /s/ Xxxxxxxxx X. Xxxxxxx
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Xxxxxxxxx X. Xxxxxxx, President
and Xxxxxxxxx X. Xxxxxxx Individually
