Exhibit 10.4
[signature page to Consulting Agreement]
{B0167105; 4}
CONSULTING AGREEMENT
This CONSULTING AGREEMENT (this "Agreement"), dated as of March 23,
2005, by and between Xxxxxxx.xxx, Inc., an Utah corporation (the "Company")
and Xxxxxx X. Xxxxxxx ("Consultant").
WITNESSETH:
WHEREAS, the Company and the Consultant are parties to an Asset Purchase
Agreement dated the date hereof (the "Asset Purchase Agreement") relating to,
among other things, the sale and transfer of the Battery Brain Product (the
"Product"); and
WHEREAS, the Consultant has agreed to provide consulting services to the
Company in connection with the Product, and the Company has agreed to retain and
compensate the Consultant therefor, all upon the terms and conditions set forth
herein.
NOW, THEREFORE, in consideration of the covenants and agreements herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. Duties and Responsibilities.
The Consultant agrees that during the Term and in accordance with the
other terms and provisions hereof, to consult with the Company and provide such
services as are reasonably required in connection with the Product as are
necessary to ensure the smooth transition of the business to the Company and the
ongoing development, sales and marketing of the Product. Without limiting the
generality of the foregoing, but subject to the other terms and provisions
hereof, the Consultant shall during the Term perform for the Company the
following consulting services:
(i) assistance in negotiations and communications with suppliers,
and other customers, clients and vendors of the Product;
(ii) advice and assistance regarding marketing, public relations,
circulation, and similar activities;
(iii) assistance with and general liaison with the business
community regarding the Product;
(iv) assistance in identifying, researching and implementing the
Product;
(v) consult and advise the Company on business opportunities
related to the Product; and
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(vi) such other services of a similar nature as the Company may
reasonably request from time to time.
All activities of the Consultant shall only relate to the Battery Brain product
and no other business or activity.
2. Compensation.
(a) During the Term the Consultant shall be paid at an annual rate as set
forth below, which amounts shall be payable monthly, in arrears, on or prior to
the 1st day of each month during the Term, commencing on the date hereof. In the
event that the Term is extended, the parties shall negotiate the compensation
for such additional term.
i. During the first year of the Term, $160,000;
ii. During the second year of the Term, $200,000;
iii. During the third year of the Term, $240,000; and
iv. During the fourth year of the Term, $240,000.
(b) In addition, the Company shall reimburse the Consultant for its
reasonable out-of-pocket travel, meals and entertainment costs and expenses
incurred in connection with its provision of the consulting services set forth
herein, within no less than thirty (30) days of the request therefore from the
Consultant; provided, however, that (i) all such expenses in excess of $5,000
shall be approved in advance by the Company and (ii) the Consultant shall submit
to the Company reports and documentation detailing all expenses. All expenses
must be properly verified by supporting receipts and bills, or other suitable
evidence. The Consultant shall receive a cell phone from the Company and the
Company shall be responsible for all bills relating thereto. The Company shall
pay the Consultant a car allowance in the maximum amount which is permitted by
the Internal Revenue Service and applicable rules.
(c) All benefits which shall be granted to the Chief Executive Officer of
the Company shall be granted to the Consultant, including without limitation
bonuses and stock options.
3. Term.
The term of this Agreement shall be four years (the "Term") commencing and
effective as of the date hereof, and, unless sooner terminated as provided in
Section 5, shall end on March 23, 2009. The Term may be extended only by mutual
consent of the parties.
4. Termination.
In the event that prior to the expiration of the Term, the Company
terminates the services of the Consultant, including without limitation, whether
such termination is as a result of the death or disability of Consultant or for
cause, the Company shall pay the Consultant or his representatives the balance
of the payments described in Section 2(a) above. For the avoidance of doubt, the
Company further agrees and acknowledges that all payments described in Section
2(a) which have not yet been paid at the time of any termination of the services
of the Consultant shall become immediately due and payable upon the termination.
For example, if the Company terminates the services of the Consultant on the
third anniversary of the date hereof, and all payments for the 3-year period
have been paid in full, the Company shall owe the Consultant $240,000 upon the
termination.
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5. Non-competition; Non-solicitation.
During the Term, the Consultant shall not:
(i) directly or indirectly own, produce, engage in, be associated
with, consult for, or have a financial interest in, or take
the initiative in founding or organizing any individual, firm,
corporation, limited liability company, partnership, trust,
estate, association or other entity engaged in a business
competitive with the business of the Company (collectively, a
"Competing Business"); provided, however, that the foregoing
shall not apply to the Consultant's ownership of less than
five percent (5%) of the capital stock of a company having a
class of capital stock which is traded on any national stock
exchange; or
(ii) directly or indirectly solicit, induce or cause (or in any
manner attempt to do the same) any individual employed or
engaged by the Company or any of its affiliates during the
Term to leave such employment or engagement, whether or not
such employment or engagement is pursuant to a written
contract with the Company or otherwise, or hire or engage any
such individual (other than through general employment
opportunity solicitations).
6. Confidentiality; Non-disparagement.
(a) During the Term, the Consultant agrees not to reveal or disclose to
any person or use for its own benefit, without the consent of the
Company, any proprietary or confidential information concerning the
Company, the Product or the Company's conduct thereof. Without
limiting the generality of the foregoing, the Consultant agrees not
to make any copies of materials containing any such proprietary or
confidential information, except with the Company's prior written
consent, and that it will return as soon as practicable after the
termination of this Agreement all such materials (and copies) of
such proprietary or confidential information. This Agreement does
not convey to the Consultant a license in or any proprietary right
to such information other than the right to use such information in
connection with his provision of the consulting services set forth
in Section 1 hereof. For purposes of this Agreement, information
shall not be deemed proprietary or confidential if (i) is generally
known to the public at the time of disclosure or becomes generally
known through no wrongful act on the part of the Consultant, (ii)
becomes known to the Consultant through unrestricted disclosure by
sources other than the Company having a legal right to disclose such
information, or (iii) is already known by the Consultant at the time
of disclosure.
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(b) The Consultant shall not make, including through an agent, any oral
or written statements which are or could reasonably be interpreted
to be of a negative or critical nature concerning the Company or its
business.
The Consultant agrees to cause its employees to be bound by all the terms
and provisions of Sections 5 and 6 hereof.
7. Independent Contractor.
The Consultant shall be deemed to be an independent contractor of the
Company and shall not be considered an agent, employee, partner, or joint
venturer with the Company. The Consultant shall be responsible for payment of
any and all self-employment and other payroll-related taxes, as applicable, and
shall be solely responsible for securing any necessary insurance. The Consultant
shall not have the authority, nor represent that he has the authority, to make
any commitments on the Company's behalf.
8. Indemnification.
The Company shall indemnify and hold harmless the Consultant and its
officers, directors, shareholders and employees from and against any loss,
damage, liability, cost and expense (including attorneys' fees and legal costs)
caused to or incurred by it or any of them as a result of third party claims
filed against it or any of them and arising out of or resulting from the
performance by Consultant of the consulting services under Section 1 hereof
and/or the use by the Company of any information developed or provided by
Consultant in the performance of its consulting services under Section 1
hereunder, except for acts which involve the willful misconduct of the
Consultant. In connection with the indemnification under this Section 9, the
Company will obtain and maintain adequate levels of liability insurance insuring
the performance of the Consultant during the Term.
9. Miscellaneous.
(a) The internal laws of the State of New Jersey, without regard to
conflicts or choice of law principles, will govern the validity of
this Agreement, the construction of its terms, and the
interpretation and enforcement of the rights and duties of the
parties hereto.
(b) Neither party to this Agreement may assign, transfer or otherwise
dispose of any of its rights in this Agreement or delegate, transfer
or otherwise dispose of any of its duties under this Agreement
without the prior written consent of the other party, provided,
however, that the Consultant shall have the right to assign this
Agreement to another person or entity as long as the Consultant
shall provide the services hereunder. This Agreement shall be
binding upon the successors of the parties hereto.
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(c) If any provision of this Agreement, or the application thereof, is
for any reason held to any extent to be invalid or unenforceable,
the remainder of this Agreement and application of such provision to
other persons or circumstances will be interpreted so as reasonably
to effect the intent of the parties hereto. The parties further
agree to replace such unenforceable provision of this Agreement with
a valid and enforceable provision that will achieve, to the extent
possible, the economic, business and other purposes of the void or
unenforceable provision.
(d) This Agreement may be executed in counterparts, each of which will
be an original as regards any party whose name appears thereon and
all of which together will constitute one and the same instrument.
This Agreement will become binding when one or more counterparts
hereof, individually or taken together, bear the signatures of all
parties reflected hereon as signatories.
(e) Any term or provision of this Agreement may be amended, and the
observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only by a writing signed by the party to be bound
thereby. The waiver by a party of any breach hereof or default in
the performance hereof will not be deemed to constitute a waiver of
any other default or any succeeding breach or default. The failure
of any party to enforce any of the provisions hereof will not be
construed to be a waiver of the right of such party thereafter to
enforce such provisions.
(f) Any notice or other communication required or permitted to be given
under this Agreement must be in writing, will be deemed duly
received when delivered in person or when sent by facsimile (with
copy of confirmation receipt), or one business day after having been
sent by a nationally recognized overnight courier service, addressed
as follows (or to such other addresses as a party may designate):
If to the Company:
Xxxxxxx.xxx, Inc.
c/o 00 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Tel: (000) 000-0000
Fax: 9516) 000-0000
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If to the Consultant:
Xxxxxx X. Xxxxxxx
0-00 Xxxxx Xxxxx
Xxxx Xxxx, XX 00000
Tel: 000-000-0000/000-000-0000
(g) The language hereof will not be construed for or against any party
based solely on that party being the drafting party. The titles and
headings in this Agreement are for reference purposes only and will
not in any manner limit the construction of this Agreement. Where
the context permits, the word "including" shall mean "including
without limitation" or words to that effect. For the purposes of
such construction, this Agreement will be considered as a whole.
(h) No provisions of this Agreement are intended, nor will be
interpreted, to provide or create any third party beneficiary
rights.
(i) This Agreement constitutes the entire understanding and agreement of
the parties hereto with respect to the subject matter hereof and
supersedes all prior and contemporaneous agreements or
understandings, inducements or conditions, express or implied,
written or oral, between the parties with respect to the subject
matter hereof. The express terms hereof control and supersede any
course of performance or usage of trade inconsistent with any of the
terms hereof.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and
delivered by their respective officers thereunto duly authorized, all as of the
date first written above.
CONSULTANT:
/s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
XXXXXXX.XXX, INC.:
By: /s/ Xxxx Xxxxx
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Name: Xxxx Xxxxx
Title: President
[signature page to Consulting Agreement]
