SERVICES AGREEMENT
THIS SERVICES AGREEMENT is entered into as of August 3, 2001 (the
"EFFECTIVE DATE"), by and between CDEx-Inc. Corp., a Nevada corporation (the
"COMPANY") and Xxxxxx Xxxxx through his limited liability entity (the
"Consultant").
1. SERVICES AGREEMENT. Subject to the terms and conditions set forth in
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this Agreement, the Company agrees to engage the Consultant to perform services
for the Company as set forth below.
2. TERM. The term of engagement under this Agreement shall be for two years
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from the Effective Date (the "ENGAGEMENT PERIOD"), unless terminated earlier as
provided herein.
3. SERVICES OF THE CONSULTANT. Consultant shall serve as a Consultant to
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the Company, providing transition of technology development from Loch Xxxxxx,
Inc. to CDEX. In addition, Consultant shall assist CDEX in the marketing of
CDEX products and providing other services as directed by the CEO of CDEX, as
needed. Consultant shall devote his best efforts and attention in performing
such services for the Company. These services shall include periodic meetings
and teleconferences to discuss business of the Company. These activities of the
Consultant are hereinafter called the "Services".
4. PLACE OF PERFORMANCE. The Consultant shall perform the Services at the
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locations agreed upon by the Consultant and the Company.
5. CHARGES.
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5.1. FEE.
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5.1.1. During the Engagement Period, the Company shall pay to the
Consultant fees for the services of Consultants. The fee shall be $100.00 per
year for such services. It is realized that this fee is not adequate for the
Services to be rendered. Accordingly, Consultant will be awarded equity in the
Company, as noted below in Section 5.5.
5.1.2. The fee shall be reviewed no less frequently than annually
and may be increased at the discretion of the Company. Except as otherwise
agreed to in writing by the Consultant, the fee shall not be reduced.
5.2. BONUS. The Consultant shall be eligible for an annual performance
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bonus based on the performance of the Company and the contribution of the
Consultant.
5.3. BENEFITS. Compensation provided is intended to include any and
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all payments for benefits, if any, that will be provided to Consultant by the
Company.
5.4 VACATION; HOLIDAYS. The Consultant shall take holidays and
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vacations at times that do not adversely impact the Company's work.
5.5 EQUITY PARTICIPATION. It is recognized that the fees
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provided will not adequately compensate the Consultant for the Services.
Accordingly, the Company and the Consultant have agreed that the Consultant
shall be entitled to receive a combined total of seven hundred fifty thousand
(750,000) shares of restricted common stock in the Company (the "CONSULTANT
STOCK") as part of the compensation hereunder. Further, the Consultant Stock
shall be subject to graduated repayment provisions, as set forth below. In this
regard, it is realized that substantial value will be added by the Consultant
during the transition of the technology from Loch Xxxxxx to CDEX which will
occur during the first three months of the contract period.
The parties understand that the Consultant Stock issued will be restricted
in some fashion. However, the intent is to remove those restrictions as soon as
legally possible and practicable. The Consultant agrees to comply strictly with
all such restrictions in connection with the receipt as well as any disposition
of such stock. The Consultant shall provide and deliver to the Company all
information, certifications, and other documentation as may be requested by the
Company as part of the Company's compliance with any applicable laws and
regulations relating to the issuance and/or registration of any of the Company's
stock, including but not limited to the Consultant Stock.
5.5.1. REPAYMENT. Consultant shall repay part of the shares
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of the Consultant Stock received (or other equivalent shares of the Company
stock) if, at any time during the Engagement Period, the services of Consultant
are terminated by the Company for Cause (as that term is defined in Section
7.1.1) or the Consultant elects to no longer provide substantial services to the
Company. In either event, then within sixty (60) days afterwards, the
Consultant shall repay to the Company a portion of the Consultant Stock in
accordance with the following schedule:
(a) if within the first three months after the Effective
Date, the Consultant shall repay 50% of the Consultant Stock received;
(b) if after the first three months, but before the start of
the seventh month after the Effective Date, the Consultant shall repay 25% of
the Consultant Stock received;
(c) if after the sixth month but before the end of the first
year, the Consultant shall repay 15% of the Consultant Stock received, and
(d) if after the first year but before the end of the second
year, the Consultant shall repay 10%.
6. EXPENSES. The Company shall reimburse the Consultant for reasonable and
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authorized expenses incurred upon periodic presentation by the Consultant of an
itemized account of such expenses and appropriate receipts.
7. TERMINATION OF SERVICES.
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7.1 TERMINATION OF SERVICES. An Consultant's service for the Company
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during the Engagement Period will continue until the Consultant's termination in
accordance with this Section or termination by resignation. Upon termination,
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this Agreement shall become null and void, except as otherwise provided in
Section 12.3.
7.1.1. TERMINATION FOR CAUSE. The Company may terminate the
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Consultant for "CAUSE", as defined herein below, by providing a Notice of
Termination (as that term is defined hereinafter) to the Consultant.
For purposes of this Agreement, Cause shall be limited to any of the
following:
(i) Material breach of any provision of the Agreement or
Agreements referenced in Section 9;
(ii) The conviction of, or a plea of nolo contendere to, a
felony that materially damages the Company or its reputation;
(iii) The intentional fraud on, or willful misappropriation
of, funds or property belonging to or claimed by the Company and exceeding
$500.00 in an aggregate amount;
(iv) Except in cases involving mental or physical incapacity
or disability, willful misconduct or gross negligence in connection with the
performance of duties that adversely impacts the Company;
(v) The chronic use of alcohol, drugs or other similar
substances affecting work performance;
7.2 TERMINATION UPON DISABILITY. If the Company determines in good
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faith that the Consultant has a Disability as defined in this Section 7.2, the
Company may terminate that individual under this Agreement by notifying the
Consultant thereof at least thirty (30) days before the Date of Termination.
For purposes of this Agreement, "DISABILITY" means the inability to
substantially perform the Services by reason of any medically determined
physical or mental impairment that is or will be a permanent condition or is a
condition that will continue for at least three (3) months.
7.3 NOTICE OF TERMINATION. Any termination of Consultant by the
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Company or the Consultant (other than because of death) shall be communicated by
written Notice of Termination to the other party hereto as noted below. For
purposes of this Agreement, a "NOTICE OF TERMINATION" shall mean a notice which
shall indicate the specific termination provision in this Agreement relied upon,
if any, and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination.
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8. COMPENSATION UPON TERMINATION.
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8.1. DEATH OR DIABILITY. If Consultant is terminated during the
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Engagement Period as a result of death or disability, the Company shall pay to
the Consultant all fees and expenses owed to the Consultant as of the date of
death. In this event, there shall be no obligation to repay any of the
Consultant Stock upon the termination.
8.2. BY THE COMPANY FOR CAUSE. If the Company terminates Consultant
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during the Engagement Period for Cause, the Company shall pay the Consultant all
fees and expenses owed to the Consultant as of the date of termination. In
addition, Consultant shall be obligated to repay to the Company the Consultant
Stock in accordance with the repayment provisions contained in Section 5.5.1,
above.
8.3. BY THE COMPANY WITHOUT CAUSE. If the Company terminates Consultant
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during the Engagement Period other than for Cause, Death, or Disability, the
Company shall pay Consultant all fees and expenses owed to Consultant and
Consultant shall have no obligation to repay to the Company any of the
Consultant Stock.
9. CDEX AGREEMENTS. As an express condition for the Company's agreement to
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enter into this Agreement, and as a pre-condition to the effectiveness of this
Agreement, the Consultant and Company agree that each shall (i) keep the
confidential and proprietary information and the intellectual property of the
Company confidential; (ii) assign to the Company all of the ownership rights in
and to any intellectual property relating to the Company and its business that
is developed, created, or discovered by Consultant during the Engagement Period;
and (iii) agree not to compete with the Company anywhere in the world and its
business or solicit the Company's customers, vendors, or employees during the
Engagement Period and for an additional period of five years. A breach of this
provision shall be deemed a material breach of this Agreement. To further
provide for the implementation of this provision, within twenty days from
execution of this Agreement the Consultant agrees to execute and deliver to the
Company a CDEX Non-disclosure and Confidentiality Agreement and a CDEX
Non-Compete and Non-Solicitation Agreement, and the Consultants shall execute an
Ownership and Assignment of Intellectual Property Rights Agreement
(collectively, the "CDEX Agreements"), the terms and conditions of which are
specifically incorporated herein by reference.
10. INDEPENDENT CONTRACTOR OBLIGATIONS. It is expressly agreed that the
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Consultant is acting as an independent contractor in performing the Services.
The Company shall carry no Workers' Compensation insurance or any health or
accident insurance to cover the Consultant or any of its employees or
contractors. The Consultant shall carry all such insurance as shall be required
by law and as it deems appropriate, and shall provide the Company with a copy of
each such insurance policy upon the request of the Company. The Company shall
not pay any contribution to Social Security, unemployment insurance, federal or
state withholding taxes, nor provide any other contributions or benefits which
might be expected to be paid by an employer in an employer-employee
relationship. The Consultant expressly agrees to report and to pay, on or before
the date due, any and all contributions for taxes, unemployment insurance,
Social Security, and other benefits for itself and its employees. Upon the
request of the Company, the Consultant shall provide evidence, satisfactory to
the Company, that all such tax and other payments required to be made by the
Consultant under this Section have been timely paid when and as due.
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11. ARBITRATION. Any failure to perform, controversy or claim arising out
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of or relating to this Agreement or the breach, termination or validity thereof,
shall be determined exclusively by arbitration in accordance with the provisions
of this Section and in accordance with the rules of the American Arbitration
Association for arbitrating commercial matters. The arbitration shall be held in
Washington, D.C., the surrounding metropolitan area of Maryland, or such other
location as the parties shall mutually agree. The arbitrators shall base their
award on applicable Maryland law and judicial precedent, and shall accompany
their award with written findings of fact and conclusions of law. The decision
of the arbitrators shall be binding on the parties, except that any party may
appeal the arbitrators' decision by filing an action to reconsider the decision
of the arbitrators in a court having jurisdiction hereunder. In any such action
the arbitrators' findings of fact shall be conclusive and binding on both
parties and the sole questions to be determined by the court shall be (i)
whether or not the arbitrators' decision was contrary to Maryland law and
judicial precedent, and (ii) if the court determines that the arbitrators'
decision was contrary to Maryland law and judicial precedent, then how the
dispute shall be resolved based on the arbitrators' findings of facts and
Maryland law and judicial precedent. The decision of the court as to the
resolution of the dispute under Maryland law and judicial precedent shall
supercede the arbitrators' decision. Judgment upon the award rendered by the
arbitrators, as modified by the court, if applicable, may be entered in any
court having jurisdiction in accordance herewith.
11.1 SELECTION OF ARBITRATORS. One arbitrator shall be selected
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by the Company and one by the Consultant, and the arbitrators shall mutually
select another arbitrator to serve with them so that there shall be an odd
number of arbitrators. Alternatively, the parties may agree to accept a single
arbitrator to be mutually agreed upon by the parties. Each person serving as an
arbitrator hereunder shall be a professional with excellent academic and
professional credentials who has had experience as an arbitrator and at least
ten years experience in the field of resolving commercial disputes in the
Washington Metropolitan area.
11.2 DISCOVERY. Each party shall, upon the written request of
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the other party, provide the other with copies of documents relevant to the
issues raised thereby. Other discovery may be ordered by the arbitrators to the
extent the arbitrators deem additional discovery appropriate, and any dispute
regarding discovery, including disputes as to the need therefor or the relevance
or scope thereof, shall be determined by the arbitrators, which determination
shall be conclusive.
11.3 EXPENSES. Each party shall pay its own expenses incurred in
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any arbitration proceeding, except as may be otherwise provided by the rules of
the American Arbitration Association.
11.4 CONFIDENTIALITY OF PROCEEDINGS. The arbitrators, expert
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witnesses, stenographic reporters and any other third parties shall sign
appropriate nondisclosure agreements in the event that any confidential or
proprietary information is or may be disclosed in the arbitration proceedings.
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12. MISCELLANEOUS.
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12.1 NOTICES. All notices, demands, requests or other communications
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required or permitted to be given or made hereunder shall be in writing and
shall be hand-delivered or shall be mailed by first class registered or
certified mail, postage prepaid to the respective addresses of the parties.
Notice shall be deemed to have been received either on the day delivered, if
hand-delivered, or five (5) days after mailing, if mailed.
12.2 SEVERABILITY. The invalidity or unenforceability of any one or
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more provisions of this Agreement shall not affect the validity or
enforceability of the other provisions of this Agreement, which shall remain in
full force and effect.
12.3 SURVIVAL. It is the express intention and agreement of the
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parties hereto that the provisions of Section 8, Section 9, Section 10, and
Section 11 hereof shall survive the termination of this Agreement. In addition,
all obligations of the Company to make payments or distributions hereunder, and
all obligations to repay any shares of stock, if applicable, shall survive any
termination of this Agreement on the terms and conditions set forth herein.
12.4 ASSIGNMENT. The rights and obligations of the Consultant under
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this Agreement shall not be assignable or delegable, except that with the prior
written consent of the Company.
12.5 BINDING EFFECT. Subject to any provisions hereof restricting
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assignment, this Agreement shall be binding upon the parties hereto and shall
inure to the benefit of the parties and their respective heirs, devisees,
executors, administrators, legal representatives, successors and assigns.
12.6 AMENDMENT; WAIVER. This Agreement shall not be amended, altered
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or modified except by an instrument in writing duly executed by the parties
hereto. Neither the waiver by any of the parties hereto of a breach of or a
default under any of the provisions of this Agreement, nor the failure of any of
the parties, on one or more occasions, to enforce any of the provisions of this
Agreement or to exercise any right or privilege hereunder, shall thereafter be
construed as a waiver of any subsequent breach or default of a similar nature,
or as a waiver of any such provisions, rights or privileges hereunder.
12.7 HEADINGS. Section and subsection headings contained in this
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Agreement are inserted for convenience of reference only, shall not be deemed to
be a part of this Agreement for any purpose, and shall not in any way define or
affect the meaning, construction or scope of any of the provisions hereof.
12.8 GOVERNING LAW. This Agreement, the rights and obligations of the
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parties hereto, and any claims or disputes relating thereto, shall be governed
by and construed in accordance with the laws of the State of Maryland (but not
including the choice of law rules thereof). Subject to the arbitration
provisions herein, any action filed in relation to this Agreement and the
performance of the parties hereunder shall be filed in the appropriate state
court or the U.S. District Court having jurisdiction over Rockville, Maryland,
the parties hereto waiving any other venue to which they may be entitled by
virtue of domicile or otherwise. Each of the parties hereto waives a trial by
jury in regard to any claims or disputes relating to this Agreement.
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12.9 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
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between the parties respecting the engagement of the Consultant, there being no
representations, warranties or commitments except as set forth herein.
12.10 COUNTERPARTS. This Agreement may be executed in two or more
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counterparts, each of which shall be an original and all of which shall be
deemed to constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement, or
have caused this Agreement to be duly executed on their behalf effective as of
the day and year first hereinabove written.
By: _________________________ By: _________________________
Xxxxxx Xxxxx Xxxxxxx X. Xxxxxxx, Xx.
CEO
CDEX, Inc.
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