Exhibit 10.2
CONSULTING AGREEMENT
This CONSULTING AGREEMENT ("Agreement") dated as of November
12 , 2004, by and between VidRev Technologies Inc., incorporated under the
laws of the state of Florida, with its principal offices at 0000 Xxxxxxx Xxxx
Xxxx, #000, Xxx Xxxxxxx, Xxxxxxxxxx 00000 (the "Company") and Xx Xxxxxxxxx, an
individual and independent contractor, with his primary residence at 0000
Xxxxxxx Xxxxxx, Xxxxxxxxx 000, Xxxxx Xxxxx, Xxxxxxx 00000 (the "Consultant").
WHEREAS, the Company is in the business of licensing and operating
products used for video telephony, video conferencing, Internet broadcasting
and compression and transmission of electronic files, in connection with the
World Wide Web, and has the exclusive United States license for the
distribution of the product known as the VidPhone.
WHEREAS, the Consultant is an individual with extensive experience
in business development and can provide business advice, xxxxxx business
relationships and support marketing efforts for the Company.
WHEREAS, the parties desire to enter into a consulting agreement
on the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the mutual promises and
benefits set forth herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound hereby, agree as follows:
1. Services. Upon the terms and subject to the conditions of
this Agreement, the Consultant agrees to provide consulting services to the
Company relating to the promotion of the Company, the marketing of the
company's products, the initial launch and marketing campaign of the VidPhone
and other services, as may be requested by the Company. Consultant will also
serve as a member of the Company's Board of Directors.
2. Term. This Agreement shall commence as of November 12, 2004
and shall continue in effect until November 11, 2006, unless otherwise
terminated pursuant to this Agreement (the "Term"). The Term shall
automatically renew for successive one-year periods. Either party may
terminate this Agreement for any reason and at any time by providing the other
party with thirty (30) days prior written notice, however both parties'
obligations will continue to the end of such notice period. In the event this
Agreement is terminated by either party, the Company shall pay the Consultant
the Compensation accrued through the date of his termination.
3. Duties; Extent of Services.
(a) Duties. During the Term of this Agreement, the
Consultant shall have the title of Manager, Business Development and the
Consultant's services shall include, but are not limited to assisting with:
(i) directing and supervising the business development of the VidPhone product
and any other subsequent product offerings; (ii) identifying and securing
potential Clients (as defined herein); (iii) engaging in direct marketing of
the Company's services; (iv) assisting in negotiating and implementing License
Agreements with Clients; and (v) recruiting potential officers, executives and
staff of the Company
(b) Board Appointment. Consultant has been elected and
will serve on the Board of Directors of the Company for an initial two-year
term. Upon receipt of written notice, the Consultant shall attend
approximately four (4) Board meetings per calendar year. In consideration for
the Consultant's attendance at the Company's Board meetings, the Company
agrees to pay the Consultant Two Thousand, Five Hundred Dollars ($2,500.00)
per meeting attended by the Consultant as well as reasonable travel expenses.
The Company will also issue five hundred (500) shares of common stock par
value $0.0001 per share in the Company ("Common Stock") to the Consultant for
each meeting attended.
(c) The Consultant acknowledges that he has been informed
that the Company currently has Directors and Officers Insurance ("D&O
Insurance"). The Consultant has been advised to take whatever additional
steps he deems necessary to adequately protect his interests.
(d) Extent of Services. The Consultant acknowledges that
he is expected to devote reasonable time and attention to the business of the
Company and use reasonable efforts to promote the interests of the Company;
assist in necessary follow-up activities; and assist with negotiating
transactions between the Company and Clients.
(i) Consultant and the Company agree that Consultant
will at all times be engaged as an independent contractor. In performing
services under this Agreement, Consultant shall not act as an employee of the
Company for any purpose whatsoever. Notwithstanding what would otherwise be
permitted within Consultant's capacity as a member of the Board of Directors,
Consultant shall have no power or authority to incur or create any obligations
or liability of any kind for or on behalf of the Company except as the Company
shall expressly authorize in writing in each instance and Consultant shall not
at any time enter into any contract with any person, firm or company that
shall purport to bind the Company in any manner whatsoever without specific
written authority obtained from the Company in advance, and any such contract
entered into by Consultant without such written authority shall not be binding
upon the Company.
(ii) Consultant affirms that he operates an
independent business and is responsible for payment of all tax and related
obligations arising under any state, federal or local statute.
(iii) While this Agreement is in effect and
thereafter, Consultant is free to perform services for persons or entities
other than the Company and/or Clients (as herein defined), provided that such
service does not conflict with this Agreement.
(iv) It is agreed that Consultant may not render
services to any existing or potential competitors of the Company in the United
States for the duration of this Agreement and for three (3) months thereafter
without the Company's prior written consent.
(v) Consultant shall utilize his own independent
judgment and discretion in the performance of his consulting services without
supervision or right to supervise or control as to the means and manner,
including location and sequencing of performance, by the Company.
(vi) Consultant shall provide his own tools,
equipment or other materials as needed.
(vii) Consultant may perform his services from any
location. If Consultant seeks to utilize facilities provided by the Company,
he must obtain the Company's prior consent in each instance.
(viii) Consultant shall be reimbursed for
reasonable travel or other costs or expenses incurred, with the prior approval
of the Company, in connection with this Agreement.
(ix) Consultant may take reasonable time off without
the Company's prior approval.
(x) Consultant is not required to identify himself
as a representative of the Company.
4. Compensation. In consideration of the services rendered by
the Consultant hereunder, the Company shall compensate the Consultant in the
issuance of shares of Common Stock in the Company in the manner set forth in
the following compensation chart shown as Schedule A and Schedule B:
(a) The Consultant shall only be eligible to receive the
above-referenced commissions if, (i) he introduces Clients to the Company
(Schedule A); (ii) he is directly involved in negotiating the transaction
between the Company and Client (Schedule B); (iii) the transaction results in
the execution of a License Agreement (as defined herein) between the Company
and Client; and (iv) the Company has received payment pursuant to such License
Agreement and/or the Client fulfills its payment obligation to the Company.
(b) The Consultant acknowledges that the Revenue generated
from licensing fees will be calculated on an annual basis from the execution
of the License Agreement through the one year anniversary date of such License
Agreement. The Consultant further acknowledges that issuance of any common
Stock pursuant to Section 4 will be made within forty-five (45) days of the
one-year anniversary date of such License Agreement (each such anniversary
date, an "Issuance Date").
(c) To the extent the Consultant is only partially
involved in the activities described in Section 4(a), (i.e., only introduces
the Client to the Company) the Company's Chief Operating Officer (the "COO")
shall in his sole and absolute discretion allocate any commission the COO
deems appropriate under the circumstances, if any, between the Consultant and
any other person who participated in the activities described in Section 4(a).
(d) Consultant hereby acknowledges that for purposes of
future compensation only the Company will set the value of one share of Common
Stock at $5.00 (the "Market Price") and the aggregate value of 540,000 shares
of Common Stock in the foregoing example in Section 4 will be set $2,700,000
(the "Aggregate Value"). In the event the average closing price per share of
Common Stock for the preceding 10 days of an Issuance Date exceeds the Market
Price, the Board of Directors, in its sole and absolute discretion, may reduce
the number of shares issuable to Consultant on such Issuance Date (the
"Adjusted Amount"); provided that, the Adjusted Amount shall not be less than
the quotient of: (x) Aggregate Value, divided by (y) the Market Price.
(e) The Company will not deduct or withhold any federal,
state or local income taxes from the payments made to Consultant. Company
shall issue to Consultant a Form 1099 in connection with the payments.
Consultant shall be solely responsible for the payment of any taxes due on
fees paid to him by the Company.
(f) Compensation under Section 3(b) shall not be subject
to any of the terms of Section 4 relating to compensation for consulting
services.
5. Additional Compensation.
(a) The Consultant acknowledges that upon execution of
this Agreement, he will receive 300,000 shares of restricted Common Stock in
the Company. Of this number of shares, 45,000 shall constitute a signing
bonus, and 255,000 shall be deemed as compensation. The Consultant
acknowledges that these shares of restricted Common Stock in the Company are
being issued in consideration for services rendered.
6. Registration of Shares.
(a) The Consultant acknowledges that any shares of Common
Stock to be issued hereunder have not been registered under the Securities Act
of 1933, as amended, (the "Securities Act") and are being issued in reliance
on exemptions from the registration requirements of the Securities Act; that
the Common Stock is subject to restrictions on transferability and resale and
may not be offered, sold, pledged, hypothecated or otherwise transferred or
disposed of except pursuant to an effective registration statement under the
Securities Act or exempt from such registration, and the Company receives an
opinion of counsel acceptable to it to the effect that such registration is
not required. The Consultant hereby agrees that the following or similar
legend may be placed prominently on the face or back of the certificates
evidencing the Common Stock:
"The securities represented hereby have not been registered under
the Securities Act of 1933, as amended (the "Securities Act") or under
any state securities laws and may not be offered, sold, pledged,
hypothecated or otherwise transferred or disposed of except pursuant to
an effective registration statement under the Securities Act and
applicable state securities laws, unless exempt from such registration
and the issuer receives an opinion of counsel satisfactory to the issuer
that an exemption from registration is available."
7. Benefits. The Consultant acknowledges that as a result of
his independent contractor status he shall not be eligible to participate in
any Company-sponsored benefit plans provided to the Company's employees
including but not limited to group health insurance, medical and
hospitalization coverage or stock option plan.
8. Confidentiality.
(a) Importance of Confidential Information. In the course
of performing his responsibilities under this Agreement, the Consultant may be
exposed to or acquire information regarding the business, projects,
operations, finances, activities, research, development, products, technology,
technology architecture, business models, plans or processes, marketing plans,
customers, finances, personnel data, procurement processes or strategies or
suppliers of the Company, its Clients, or their respective directors,
officers, employees, agents or customers, including, without limitation, any
idea, proposal, plan, procedure, technique, formula, technology, or method of
operation (collectively, "Confidential Information"). Without limiting the
foregoing, Confidential Information shall also include all written or oral
information relating to the Company and/or its Clients, or their respective
directors, officers, employees, agents or customers, that given its nature or
the context of disclosure should reasonably be understood to be confidential.
The Consultant agrees to hold Confidential Information in strict confidence,
to use such information for no purpose other than as necessary for the
performance of his obligations hereunder, and to make no disclosure of such
information except in accordance with the terms of this Agreement and in
relation to his duties hereunder. The Consultant hereby acknowledges that the
use by the Consultant for his own account or the disclosure by the Consultant
to any existing or potential competitors of the Company of any Confidential
Information could place the Company at a serious competitive disadvantage, and
could do serious and irreparable damage, financial or otherwise, to the
business of the Company.
(b) No Right to Disclose Confidential Information. By
reason of Section 6(a) above, the Consultant hereby covenants and agrees that
he shall not, at any time, directly or indirectly, reveal, divulge or make
known to any Person (as herein defined) (other than the Company) or use for
his own account, or for the account of any Person (other than the Company),
any Confidential Information of which he becomes aware during the Term.
(c) Exclusion from Definition of Confidential Information.
The term "Confidential Information" shall not include (i) the Consultant's
general expertise, knowledge and experience in any business including any
business in which the Company is engaged; and (ii) any information which (A)
has become available to the general public without fault on the part of the
Consultant; (B) has been received by the Consultant at any time from a source
other than the Company, its agents, representatives or employees, lawfully
having possession of such information without an obligation of
confidentiality; or (C) has been in the public domain or been part of a
printed publication available to the public.
(d) Return of Confidential Materials. Upon the
termination of this Agreement, Consultant promises and agrees to return to the
Company all records, documents, files, papers and other materials or property
belonging to the Company and/or its Clients.
9. Indemnification. Consultant hereby agrees to indemnify,
defend and hold harmless the Company and its members, employees and their
respective successors, assigns and affiliates from and against any and all
damages caused by, resulting from or arising out of the negligence or willful
misconduct of Consultant in connection with the services provided by
Consultant to the Company or its Clients under this Agreement.
10. Definitions. For purposes of this Agreement, the following
terms shall have the following meanings:
(a) "Client" or "Clients" means, in relation to the
Company, (i) any customer, vendor or licensee of the Company during the Term;
or (ii) any potential customer, vendor or licensee of the Company who has been
targeted as a potential Client or with whom the Company is involved in
discussions relating to a current or future transaction related to their
businesses during the Term.
(b) "License Agreement" means an agreement granting a
Client the right to market and distribute VidRev Technologies, Inc. products
and software in accordance with the terms and conditions set forth by the
Company.
(c) "Person" means any individual, partnership,
corporation, limited liability company, association, business trust, joint
venture, governmental entity, business entity or other entity of any kind or
nature.
(d) "Revenue" means all fees received by the Company
pursuant or relating to License Agreements, including any related services
agreements, excluding taxes paid to a government entity.
11. Assignment. This Agreement shall be binding upon and shall
inure to the benefit of the Company and its successors and assigns, and any
successor to the Company (whether by purchase, lease, merger, consolidation,
liquidation or otherwise) or a purchaser of all or substantially all of the
Company's business and/or assets if it shall assume the obligations under this
Agreement and agree expressly to perform the obligations of the Company under
this Agreement. Neither this Agreement nor any right or interest hereunder
may be assigned by the Consultant, his beneficiaries, or legal representatives
without the prior written consent of the Company; provided, however, that
nothing in this Section 10 shall preclude (i) the Consultant from designating
a beneficiary to receive any benefit payable hereunder upon his death, or (ii)
the executors, administrators, or other legal representatives of the
Consultant or his estate from assigning any rights hereunder to distributees,
legatees, beneficiaries, testamentary trustees or other legal heirs of the
Consultant. Nothing contained herein shall prohibit the Company from assigning
its rights and obligations hereunder to any affiliate, subsidiary or related
entity of the Company.
12. Arbitration. In the event of any dispute arising out of or
relating to this Agreement, the matter shall be resolved by arbitration
pursuant to the then current Rules of the American Arbitration Association
("AAA"). Arbitration shall be initiated by one party's making a written
demand on the other party and simultaneously filing copies of the demand,
together with the required fees, with the regional office of the AAA. Within
fifteen (15) days after their appointment, each party shall designate one
party arbitrator. These two arbitrators shall, within fifteen (15) days of
meeting with the AAA, select a third arbitrator. In the event that the first
two arbitrators are unable to agree upon the third arbitrator, then the
arbitrators shall apply to the AAA to designate and appoint a person as the
third arbitrator. In the event the party upon whom the original arbitration
demand was served shall fail to designate its arbitrator within the fifteen
(15) day period, the arbitrator designated by the party requesting arbitration
shall act as the sole arbitrator and shall be deemed to be the single,
mutually approved arbitrator to resolve the matter. The arbitration shall be
conducted in New York City, New York under the auspices of the AAA. The AAA's
National Rules for the Resolution of Employment Disputes shall govern all
proceedings unless otherwise provided herein. In case of conflict between the
AAA's National Rules for the Resolution of Employment Disputes and this
Agreement, the provisions of this Agreement shall govern. The parties
expressly covenant and agree to be bound by the decision of the arbitration
panel and accept any such decision as the final determination of the matter in
dispute. A judgment of any court related to this arbitration may be entered
upon any award made pursuant to this Section 10. The foregoing shall not
apply to injunctive actions arising from Consultant's breach of the provisions
contained in Section 6 of this Agreement.
13. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been given when delivered by
hand, mailed by first-class registered or certified mail, postage prepaid and
return receipt requested, or delivered by overnight courier addressed as set
forth in the preamble hereto or at such other address as may from time to time
be specified to the other party in a notice similarly given.
14. Waiver. The failure of any party at any time to require
performance of another party of any provision hereof or to resort to his
remedy at law or in equity or otherwise, shall in no way affect the right of
such party to require such full performance or to resort to such remedy at any
time thereafter, nor shall the waiver by any party of a breach of any
provision hereof be taken or held to be a waiver of any subsequent breach of
such provision unless expressly so stated in writing. No waiver of any of the
provisions hereof shall be effective unless in writing and signed by the party
to be charged with such waiver.
15. Representations and Warranties. In accepting the terms of
this Agreement, the Consultant hereby represents that he has not taken, and
will not take in connection with his duties and services for the Company, any
action that he reasonably believes would violate any contractual or other
restriction or obligation that is binding on him or any continuing duty he may
owe to others, including but not limited to a prior employer. The Consultant
hereby acknowledges that the Company has specifically and definitively
instructed the Consultant that all such continuing duties to others, including
but not limited to, the Consultant's prior employer(s), must be respected and
adhered to.
16. Entire Agreement. This Agreement is the entire agreement
among the parties hereto and, when executed and delivered by both of such
parties (at which time this Agreement shall be effective), supersedes all
prior agreements and communications, either oral or in writing, among such
parties with respect to the subject matter contained herein.
17. Severability. If any of the provisions, terms or conditions
of this Agreement are held to be invalid or unenforceable, then the remaining
provisions, terms and conditions which can be effected without such invalid or
unenforceable part of the Agreement shall nonetheless remain in full force and
effect.
18. Governing Law. This Agreement and all the terms hereof
shall be construed, performed and enforced in accordance with the laws of the
State of Florida.
19. Headings. The headings in this Agreement are for the
convenience of the parties and do not affect, in any manner whatsoever, the
interpretation or meaning of any of the terms or provisions of this Agreement.
20. Rule of Construction Waived. The rule of construction that
provides that agreements shall be construed against the drafter shall not be
applied or considered in any action or proceeding to enforce any provision of
this Agreement.
21. Counterparts. This Agreement may be executed in multiple
counterparts and each such counterpart shall be considered as an original.
One counterpart shall be delivered to each of the parties hereto.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Agreement as of the date first written above.
VidRev Technologies, Inc.
By: /s/Xxxxx Xxxxx
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Name: Xxxxx Xxxxx
Title: Vice President
/s/ Xx Xxxxxxxxx
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Xx Xxxxxxxxx
