CONSULTING AGREEMENT
EXHIBIT
10.4
This
Consulting Agreement ("Agreement") is made and entered into and effective on
this 1" day of March 2005, by and between SmartVideo,
Inc., a
Delaware corporation with a principal place of business at 0000 Xxxxxxxx Xxxxx,
Xxxxx 000, Xxxxxxxx, XX 00000 ("Company"), and Forte
Capital Partners, LLC with an
address of 000 Xxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxxxx, XX 00000
("Consultant"). The Company desires to retain Consultant as an independent
contractor to perform consulting services for the Company, and Consultant is
willing to perform such services, on terms set forth more fully below. In
consideration of the mutual promises contained herein, the parties agree as
follows:
1. SERVICES,
COMPENSATION, AND TERM
1.1 Consultant
agrees to perform for the Company the services ("Services") described in
Appendix A, attached hereto.
1.2 The term
of this agreement is six (6) months.
1.3 Company
shall pay Consultant the compensation described in Appendix A, attached
hereto.
2. CONFIDENTIALITY
2.1 "Confidential
Information" means any Company proprietary information, technical data, trade
secrets or know-how, including, but not limited to, research, product plans,
products, services, customers, customer lists, markets, software, developments,
inventions, processes, formulas, technology, designs, drawings, engineering,
hardware configuration information, marketing, finances or other business
information disclosed by the Company either directly or indirectly in writing,
orally or by drawings or inspection of parts or equipment, whether marked as
"confidential" or not.
2.2 Consultant
will not, during or subsequent to the term of this Agreement and for a period of
two (2) years thereafter, use the Company's Confidential Information for any
purpose whatsoever other than the performance of the Services on behalf of the
Company or disclose the Company's Confidential Information to any third party.
It is understood that said Confidential Information shall remain the sole
property of the Company. Consultant further agrees to take all reasonable
precautions to prevent any unauthorized disclosure of such Confidential
Information. Confidential Information does not include information which (i) is
known to Consultant at the time of disclosure to Consultant by the Company as
evidenced by written records of Consultant, (ii) has become publicly known and
made generally available through no wrongful act of Consultant, or (iii) has
been rightfully received by Consultant from a third party who is authorized to
make such disclosure.
2.3 Consultant
agrees that Consultant will not, during the term of this Agreement, improperly
use or disclose any proprietary information or trade secrets of any former or
current employer or other person or entity with which Consultant has an
agreement or duty to keep in confidence information acquired by Consultant if
any, and that Consultant will not bring onto the premises of the Company any
unpublished document or proprietary information belonging to such employer,
person or entity unless consented to in writing by such employer, person or
entity. Consultant will indemnify the Company and hold it harmless from and
against all claims, liabilities, damages and expenses, including reasonable
attorney's fees and costs of suit, arising out of or in connection with any
violation or claimed violation of a third party's rights resulting in whole or
in part from the Company's use of the work product of Consultant under this
Agreement.
2.4 Consultant
recognizes that the Company has received and in the future will receive from
third parties their confidential or proprietary information subject to a duty on
the Company's part to maintain the confidentiality of such information and to
use it only for certain limited purposes. Consultant agrees that Consultant owes
the Company and such third parties, during the term of this Agreement and
thereafter, a duty to hold all such confidential or proprietary information in
the strictest confidence and not to disclose it to any person, firm or
corporation or to use it except as necessary in carrying out the Services for
the Company consistent with the Company's agreement with such third
party.
2.5 Upon the
termination of this Agreement, or upon Company's earlier request, Consultant
will deliver to the Company all of the Company's property or Confidential
Information that Consultant may have in Consultant's possession or
control.
3. CONFLICTING
OBLIGATIONS
Consultant
certifies that Consultant has no outstanding agreement or obligation that is in
conflict with any of the provisions of this Agreement, or that would preclude
Consultant from complying with the provisions hereof, and further certifies that
Consultant will not enter into any such conflicting agreement during the term of
this Agreement.
4. TERMINATION
Either
party may terminate this Agreement, with or without reason, upon giving thirty
(30) days prior written notice thereof to the other party. Additionally, the
Company may terminate this Agreement immediately for Cause as defined below by
giving Consultant written notice thereof. Any such notice shall be addressed to
the party at the address shown above or such other address as the party may
notify the other of and shall be deemed given upon delivery if delivered in
person, or twenty (24) hours after having been deposited with any commercial
"over-night" curriers marked for "next day" delivery, or forty-eight (48) hours
after having been deposited in the United States mail, postage prepaid,
registered or certified mail, return receipt requested.
4.1 Upon any
such termination all rights and duties of the parties toward each other shall
cease except that:
|
(i)
|
In
the event of a termination without Cause, the Company shall be obliged to
pay, within ten (10) days of the effective date of termination, all
amounts owing to Consultant for Services completed prior to the
termination date and related expenses, if any, in accordance with the
provisions of Section
1
(Services and Compensation) hereof, and any Compensation as defined in
said Section 1 as and when due for the Term of the Agreement as if the
Agreement had not been terminated, |
Or
|
(ii)
|
in
the event of a termination for Cause, the Company shall be obliged to pay,
within ten (10) days of the effective date of termination, all amounts
owing to Consultant for Services completed prior to the termination date
and related expenses, if any, in accordance with the provisions of
Section
1
(Services and Compensation) hereof. For purposes of this Agreement, Cause
shall mean and/or be deemed to have occurred upon: (i) one or more acts of
personal dishonesty, fraud or deceit taken by Consultant in connection
with his responsibilities as a Consultant and intended to result in
personal enrichment of Consultant and/or harm to the Company, and/or (ii)
the date Consultant is charged with, or pleas nolo contendere
to, any crime involving honesty, ethics or moral turpitude, and/or (iii)
any willful act(s) or omission(s) to act by Consultant which constitutes
negligence, willful bad acts and/or gross misconduct and which is
materially injurious to the operations, prospects, reputation or business
of the Company, and/or (iv) Consultant's failure to cure performance
issues within ten (10) days following delivery to Consultant of a written
demand for performance which describes the basis for the Company's
reasonable belief that Consultant has failed to substantially and
materially perform his duties, or that Consultant has continued to violate
his obligations to the Company which violations are demonstrably willful
and deliberate on Consultant's part. |
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|
(iii) |
Sections
2
(Confidentiality), 6
(Independent Contractor), 8
(Accuracy of Information), and 9
through 13
shall survive termination of this Agreement;
and |
5. ASSIGNMENT
Neither
this Agreement nor any right hereunder or interest herein may be assigned or
transferred by Consultant without the express written consent of the Company,
and any such assignment or transfer in violation of this Section 5 shall be null
and void.
6. INDEPENDENT
CONTRACTOR
The
parties to this Agreement are independent contractors. Nothing in this Agreement
shall in any way be construed to constitute Consultant as an agent, employee or
representative of the Company, but Consultant shall perform the Services
hereunder as an independent contractor. Consultant agrees to furnish (or
reimburse the Company for) all tools and materials necessary to accomplish this
contract, and shall incur all expenses associated with performance, except as
expressly provided on Appendix A of this Agreement. Consultant acknowledges and
agrees that Consultant is obligated to report as income all compensation
received by Consultant pursuant to this Agreement and Consultant agrees to and
acknowledges the obligation to pay any applicable self-employment and other
taxes thereon.
7. BENEFITS
Consultant
acknowledges and agrees and it is the intent of the parties hereto that
Consultant receive no Company-sponsored benefits from the Company either as a
Consultant or employee. If Consultant is reclassified by a state or federal
agency or court as an employee, Consultant will become a reclassified employee
and will receive no benefits except those mandated by state or federal law, even
if by the terms of the Company's benefit plans in effect at the time of such
reclassification Consultant would otherwise be eligible for such
benefits.
8. ACCURACY
OF INFORMATION
In
connection with the Consultant's services, the Company will furnish to
Consultant information that Consultant reasonably believes necessary to the
provision of services under this Agreement. The Company recognizes that
Consultant does not assume responsibility for the accuracy or completeness of
this information and Consultant will not independently verify the same. The
information furnished by the Company, when delivered, will be, to the best of
the Company's knowledge, true and correct in all material respects. The
information shall be deemed to be "Confidential Information," subject to the
provisions of Section
2 hereof,
and may not be disclosed without the prior written consent of the Chief
Executive Officer of the Company. Consultant covenants that all information
delivered or furnished by Consultant to any third party shall accurately reflect
the information given to it by the Company, and Consultant shall hold Company
harmless from any and all liability, expenses or claims arising from any breach
of Consultant's obligations under this Section
8.
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9. GOVERNING
LAW
This
Agreement shall be governed by the internal substantive laws, but not the choice
of law rules, of the State of California.
10. ENTIRE
AGREEMENT
This
Agreement is the entire agreement of the parties and supersedes any prior
agreements between them, whether written or oral, with respect to the subject
matter hereof. No waiver, alteration, or modification of any of the provisions
of this Agreement shall be binding unless in writing and signed by duly
authorized representatives of the parties hereto.
11. ATTORNEY'S
FEES
In any
court action at law or equity which is brought by one of the parties to enforce
or interpret the provisions of this Agreement, the prevailing party will be
entitled to reasonable attorney's fees, in addition to any other relief to which
that party may be entitled.
12. SEVERABILITY
The
invalidity or unenforceability of any provision of this Agreement, or any terms
thereof, shall not affect the validity of this Agreement as a whole, which shall
at all times remain in full force and effect.
13. INDEMNIFICATION
Consultant
will indemnify and hold Company harmless from and against expenses, damages,
claims, suits, actions, judgments and costs (including but not limited to
attorneys' fees) from any third party arising from or in any way connected with
any claim, action or suit that arises from Consultant's performance of its
obligations under this Agreement.
Consultant
further agrees to indemnify and hold harmless the Company and its directors,
officers, and employees from and against all taxes, losses, damages,
liabilities, costs and expenses, including attorney's fees and other legal
expenses, arising directly or indirectly from (i) any negligent, reckless or
intentionally wrongful act of Consultant or Consultant's assistants, employees
or agents, (ii) a determination by a court or agency that the Consultant is not
an independent contractor, or (iii) any breach by the Consultant or Consultant's
assistants, employee or agents of any of the covenants contained in this
Agreement.
Company
will indemnify and hold Consultant harmless from and against expenses, damages,
claims, suits, actions, judgments and costs (including but not limited to
attorneys' fees) arising from or in any way connected with any claim, action or
suit that arises from Company's performance of its obligations under this
Agreement.
Company
further agrees to indemnify and hold harmless the Consultant and its partners
and employees from and against all taxes, losses, damages, liabilities, costs
and expenses, including attorney's fees and other legal expenses, arising
directly or indirectly from (i) any negligent, reckless or intentionally
wrongful act of Company or Company's directors, officers, or employees, (ii) any
breach by the Company's or Company's directors, officers, or employee of any of
the covenants contained in this Agreement.
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IN
WITNESS WHEREOF, the
parties hereto have executed this Agreement as of the day and year written
below.
| COMPANY | ||
| SmartVideo Technologies, Inc. | ||
| |
|
|
| Date: March 1, 2005 | By: | /s/ Xxxxxxx X. Xxxxxxx Xx. |
|
Xxxxxxx X. Xxxxxxx Xx. | ||
| President and Chief Executive Officer | ||
| CONSULTANT | ||
| Forte Capital Partners, LLC | ||
| |
|
|
| By: | /s/ Xxxxxx XxXxxxxx | |
|
Xxxxxx XxXxxxxx | ||
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APPENDIX
A
SERVICES
AND COMPENSATION
1. SERVICES
Consultant
shall provide the following services as may be specified by the Company's Chief
Executive Officer and/or Board of Directors:
a) Reviewing/verifying
company's financial controls and procedures;
b) Verifying
company is SOX compliant and/or develop action to become SOX compliance;
c) Verifying
reps and warranties with each investor for current financing;
d) Work with
accountants to complete the current audit;
e) Manage
the registration - investors and company;
f) Manage
the SEC review of the SB-2;
g) Ensure no
damages are paid on the SB-2 filing and effectiveness (within
reason);
Consultant
shall use his best efforts to perform the Services and shall devote such time as
reasonably necessary to perform the Services. Consultant shall coordinate his
work with the Company's Chief Executive Officer. Consultant shall perform the
work in a professional manner consistent with industry standards.
2. MONTHLY
COMPENSATION
As
consideration for the performance of the Services, Company will pay Consultant
for each month of this Agreement, Seven Thousand Five Hundred Dollars ($7,500)
per month, payable within ten (10) days of each month end. The Company shall
reimburse Consultant for all reasonable travel and other out-of-pocket expenses
incurred in performing the Services. The Company shall reimburse Consultant
within thirty (30) days of receipt of Consultant's itemized statement and
accompanying receipts.
In
addition, the Board of Directors or authorized committee thereof, will grant to
the Consultant a warrant to purchase 150,000 shares of common stock which will
vest immediately. The warrant shall be exercisable at any time before midnight
on February 28, 2010. The exercise price shall be $3.50. The warrant shall also
provide for "cashless" exercise and will be included in the upcoming
registration statement (current round of financing) to be filed by the
Company.
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