CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (this "Agreement") dated as of November 12, 2003
is made between Rapidtron, Inc., a Nevada corporation (the "Company"), and Big
Sky Management Ltd. ("Consultant").
WHEREAS, the Company is in the business of providing automated access
solutions to fitness, winter resort, amusement, transit and other
industries;
WHEREAS, the Consultant has experience with providing strategic marketing
and business planning consulting services;
WHEREAS, the Company desires to retain Consultant to render consulting and
advisory services related to strategic marketing and business planning for
the Company on the terms and conditions set forth in this Agreement, and
Consultant desires to be retained by the Company on such terms and
conditions;
NOW, THEREFORE, in consideration of the premises, the mutual agreements
herein set forth and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties agree as follows:
1. Retention of Consultant; Services to be Performed. The Company hereby
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retains Consultant to render such consulting and advisory services as set forth
in Exhibit A and as the Company may request from time to time. Consultant
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hereby accepts such engagement and agrees to perform such services for the
Company upon the terms and conditions set forth in this Agreement. During the
Term (as defined in Section 2), Consultant shall devote the time, attention,
skill and energy to the business of the Company as may be reasonably required to
perform the services required by this Agreement up to a maximum time commitment
of 40 hours in any calendar month, and shall assume and perform to the best of
his ability such reasonable responsibilities and duties as the Company shall
assign to Consultant from time to time. Consultant shall report to the
President of the Company, and Consultant shall not render services for any other
corporation, firm, entity or person that directly competes with the business of
the Company without receiving the prior written consent of the Company.
Consultant shall perform the services hereunder primarily at the business
premises of the Consultant's office, but he shall, at the Company's expense,
also be required to render the services at such other locations as the Company
may specify from time to time.
2. Term. Unless terminated at an earlier date in accordance with Section
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10, this Agreement shall commence as of the date first written above and shall
continue for a continuously for a period of twelve months (the "Term").
3. Compensation. As compensation in full for Consultant's services
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hereunder, the Company shall pay the Consultant a consulting fee in the amount
of one hundred sixty thousand dollars ($160,000), payable by issuing Consultant
120,000 Units of the Company. Each Unit shall consist of one share of common
stock with a par value of $0.001 (a "Common Share") and one non-transferable
share purchase warrant (a "Warrant"), exercisable to acquire one additional
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Common Share at a price of $1.25 per share at any time up to 5:00 p.m. local
time in Costa Mesa, California on the first anniversary of the date of issuance
and, thereafter, at a price of $1.50 per share at any time up to 5:00 p.m. local
time in Costa Mesa, California on the second anniversary of the date of
issuance. As soon as practicable after the execution of this Agreement (but in
no event later than 30 days after such time), the Company shall undertake to
file a registration statement on Form S-8 to register the Common Shares and the
Common Shares acquirable upon exercise of the Warrants under the Securities Act
of 1933, as amended (the "Registration Statement"). The Company shall issue the
Units to the Consultant promptly upon the later of the effectiveness of the
Registration Statement or the completion of the services hereunder. The
Consultant shall not be entitled to any additional compensation for services
under this Agreement.
4. Expenses. The Company shall reimburse Consultant in accordance with
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the policies and procedures that the Company establishes from time to time for
all reasonable and necessary out-of-pocket expenses that Consultant incurs in
performing the services hereunder, including, without limitation, reasonable
travel expenses incurred by Consultant.
5. Confidentiality.
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(a) Confidential Information. Except as permitted or directed by the
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President of the Company, during the Term or at any time thereafter Consultant
shall not divulge, furnish or make accessible to anyone or use in any way (other
than in the ordinary course of the business of the Company) or use for any
purpose other than the performance of the services hereunder, any confidential
or secret knowledge or information of the Company that Consultant has acquired
or become acquainted with or will acquire or become acquainted with during the
Term or during engagement by the Company or any affiliated companies prior to
the Term, whether developed by Consultant or by others, concerning any trade
secrets, confidential or secret designs, processes, formulae, products or future
products, plans, devices or material (whether or not patented or patentable)
directly or indirectly useful in any aspect of the business of the Company, any
customer or supplier lists of the Company, any confidential or secret
development or research work of the Company, or any other confidential
information or secret aspects of the business of the Company. Consultant
acknowledges that the above-described knowledge or information constitutes a
unique and valuable asset of the Company acquired at great time and expense by
the Company and its predecessors, and that any disclosure or other use of such
knowledge or information other than for the sole benefit of the Company would be
wrongful and would cause irreparable harm to the Company. Both during and after
the Term, Consultant will refrain from any acts or omissions that would reduce
the value of such knowledge or information to the Company. The foregoing
obligations of confidentiality, however, shall not apply to any knowledge or
information which is now publicly known or which subsequently becomes generally
publicly known in the form in which it was obtained from the Company, other than
as a direct or indirect result of the breach of this Agreement by Consultant.
(b) Know-How and Trade Secrets. All know-how and trade secret information
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conceived or originated by Consultant which arises out of the performance of the
services hereunder or any related material or information shall be the property
of the Company, and all rights therein are hereby assigned to the Company.
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(c) Return of Records. Upon termination of this Agreement, Consultant
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shall deliver to the Company all property that is in his possession and that is
the Company's property or relates to the Company's business, including, but not
limited to records, notes, data, memoranda, software, electronic information,
models, equipment, and any copies of the same. Consultant shall permanently
delete all of his electronic data containing such property.
6. Consultant Representations and Warranties. Consultant represents and
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warrants to the Company as follows:
(a) Intellectual Property. Consultant has good and marketable title to
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all of the inventions, information, material or work product made, created,
conceived, written, invented or provided by Consultant hereunder ("Work
Product"), free and clear of all liens, claims, encumbrances or demands of third
parties, including any claims by any such third parties of any right, title or
interest in or to the Work Product arising out of any trade secret, copyright or
patent;
(b) Compliance with Laws. All services provided hereunder comply with or
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will comply with all applicable laws and regulations; and
(c) Competing Activities. Consultant has disclosed to the Company any and
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all other obligations, arrangements, agreements or interests of Consultant that
may constitute or give rise to a conflict of interest on the part of Consultant
given the nature and terms of this Agreement, and Consultant is not now under
any obligation of a contractual or other nature to any person, firm, corporation
or other entity which is inconsistent or in conflict with this Agreement, or
which would prevent, limit or impair the execution of this Agreement or the
performance by Consultant of Consultant's obligations hereunder.
7. Injuries.
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(a) Injuries to Consultant. Consultant waives any rights to recovery from
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the Company for any injuries that Consultant may sustain while performing the
services hereunder and that are a result of Consultant's own negligence.
(b) Injuries to Others. Consultant agrees to take all necessary
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precautions to prevent injury to any persons (including the Company's employees)
and damage to property (including the Company's property) that occur as a result
of Consultant providing services under this Agreement.
8. Indemnification
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(a) By Company. Company shall indemnify, defend and hold harmless the
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Consultant and its agents and employees from and against all claims, losses,
expenses, fees (including attorneys' and expert witnesses' fees), costs and
judgments (collectively, "Claims") that may be asserted against the Consultant
in connection with the services provided by Consultant under this Agreement.
Consultant shall be entitled to the rights of indemnification provided in this
Section 8 if Consultant is, or is threatened to be made a party to, any action,
suit, arbitration, alternate dispute resolution mechanism, investigation,
administrative hearing or any
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other actual, threatened or completed proceeding whether civil, criminal,
administrative or investigative action, including any such action in the right
of the Company to procure a judgment in its favor. Consultant shall be
indemnified against expenses, judgments, penalties and amounts paid in
settlement, actually and reasonably incurred by Consultant or on Consultant's
behalf in connection with such proceeding if Consultant acted in good faith and
in a manner Consultant reasonably believed to be in or not opposed to the best
interests of the Company, and, with respect to any criminal proceeding, having
had no reasonable cause to believe Consultant's conduct was unlawful.
Notwithstanding the foregoing, no such indemnification shall be made in respect
of any claim, issue or matter in such proceeding as to which Consultant shall
have been adjudged to be liable to the Company or if applicable law prohibits
such indemnification. In defending the Consultant or indemnifying the
Consultant against any such Claims, the Company shall have the right to select
legal counsel to provide such defense and shall have the right to settle any
such Claims in its sole discretion, provided it satisfies its indemnity
obligations set forth herein. Notwithstanding the foregoing, the Consultant may
engage legal counsel of its choice to represent the Consultant at any time, at
Consultant's sole cost and expense. The Consultant shall have no authority to
settle any Claim indemnified hereunder without the consent of the Company first
being obtained, which consent shall not be unreasonably withheld.
(b) By Consultant. Consultant shall indemnify, defend and hold harmless
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the Company and its officers, directors, agents and employees from and against
all Claims that may be asserted against the Company in connection with
Consultant's negligence or misconduct, or acts outside the scope of this
Agreement. Company shall be entitled to the rights of indemnification provided
in this Section 9 if Company is, or is threatened to be made a party to, any
action, suit, arbitration, alternate dispute resolution mechanism,
investigation, administrative hearing or any other actual, threatened or
completed proceeding whether civil, criminal, administrative or investigative
action, including any such action in the right of the Consultant to procure a
judgment in its favor. Company shall be indemnified against expenses,
judgments, penalties and amounts paid in settlement, actually and reasonably
incurred by Company or on Company's behalf in connection with such proceeding if
Company acted in good faith and in a manner Company reasonably believed to be in
or not opposed to the best interests of the Consultant, and, with respect to any
criminal proceeding, having had no reasonable cause to believe Company's conduct
was unlawful. In defending the Company or indemnifying the Company against any
such Claims, the Consultant shall have the right to select legal counsel to
provide such defense and shall have the right to settle any such Claims in its
sole discretion, provided it satisfies its indemnity obligations set forth
herein. Notwithstanding the foregoing, the Company may engage legal counsel of
its choice to represent the Company at any time, at Company's sole cost and
expense. The Company shall have no authority to settle any Claim indemnified
hereunder without the consent of the Consultant first being obtained, which
consent shall not be unreasonably withheld.
9. Independent Parties. In rendering services hereunder, Consultant
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shall be acting as an independent contractor and not as an employee or agent of
the Company. As an independent contractor, Consultant shall have no authority,
express or implied, to commit or obligate the Company in any manner whatsoever,
except as specifically authorized from time to time in writing by an authorized
representative of the Company, which authorization may be general or specific.
Nothing contained in this Agreement shall be construed or applied to create a
partnership. Consultant shall be responsible for the payment of all federal,
state or local taxes
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payable with respect to all amounts paid to Consultant under this Agreement;
provided, however, that if the Company is determined to be liable for collection
and/or remittance of any such taxes, Consultant shall immediately reimburse the
Company for all such payments made by the Company.
10. Termination. Notwithstanding any contrary provision contained
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elsewhere in this Agreement, this Agreement and the rights and obligations of
the Company and Consultant hereunder (other than the rights and obligations of
the parties under Sections 5, 6 and 8) shall be terminated immediately upon the
occurrence of any of the following events:
(a) Consultant willfully refuses to comply with or implement reasonable
policies established by the Company; or
(b) A party is in breach of this Agreement and has failed to cure such
breach within 30 days of the receipt of written notice of breach from the
non-breaching party.
If this Agreement is terminated pursuant to this Section 10, Consultant
shall be entitled to any consulting fee paid to the Consultant through the date
of termination and to reimbursement of any expenses pursuant to Section 4 of
this Agreement, but all other rights to receive consulting fees shall terminate
on such date.
11. Miscellaneous.
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(a) Entire Agreement. This Agreement (including the exhibits, schedules
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and other documents referred to herein) contains the entire understanding
between the parties hereto with respect to the subject matter hereof and
supersedes any prior understandings, agreements or representations, written or
oral, relating to the subject matter hereof.
(b) Counterparts. This Agreement may be executed in separate
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counterparts, each of which will be an original and all of which taken together
shall constitute one and the same agreement, and any party hereto may execute
this Agreement by signing any such counterpart.
(c) Severability. Whenever possible, each provision of this Agreement
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shall be interpreted in such a manner as to be effective and valid under
applicable law but if any provision of this Agreement is held to be invalid,
illegal or unenforceable under any applicable law or rule, the validity,
legality and enforceability of the other provision of this Agreement will not be
affected or impaired thereby.
(d) Successors and Assigns. This Agreement shall be binding upon and
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inure to the benefit of the parties hereto and their respective heirs, personal
representatives and, to the extent permitted by subsection (e), successors and
assigns.
(e) Assignment. This Agreement and the rights and obligations of the
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parties hereunder shall not be assignable, in whole or in part, by either party
without the prior written consent of the other party.
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(f) Modification, Amendment, Waiver or Termination. No provision of this
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Agreement may be modified, amended, waived or terminated except by an instrument
in writing signed by the parties to this Agreement. No course of dealing
between the parties will modify, amend, waive or terminate any provision of this
Agreement or any rights or obligations of any party under or by reason of this
Agreement.
(g) Notices. All notices, consents, requests, instructions, approvals or
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other communications provided for herein shall be in writing and delivered by
personal delivery, overnight courier, mail, electronic facsimile or e-mail
addressed to the receiving party at the address set forth herein. All such
communications shall be effective when received.
To: Rapidtron, Inc.
0000 Xxxxxx Xxx., Xxxx. X
Xxxxx Xxxx, XX 00000
Fax: 949/000-0000
With a copy to:
Xxx & Xxxxxxx LLP
00000 Xxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxx
Fax: 000-000-0000
To: CONSULTANT
Big Sky Management Ltd.
Xxxxxxxxxx Xxxxxx
Xxxxx 0000-000 Xxxxxxx Xx.
Xxxxxxxxx, XX, X0X 0X0
Fax 000-000-0000
Any party may change the address set forth above by notice to each other party
given as provided herein.
(h) Headings. The headings and any table of contents contained in this
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Agreement are for reference purposes only and shall not in any way affect the
meaning or interpretation of this Agreement.
(i) Governing Law. ALL MATTERS RELATING TO THE INTERPRETATION,
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CONSTRUCTION, VALIDITY AND ENFORCEMENT OF THIS AGREEMENT SHALL BE GOVERNED BY
THE INTERNAL LAWS OF THE STATE OF CALIFORNIA, WITHOUT GIVING EFFECT TO ANY
CHOICE OF LAW PROVISIONS THEREOF.
(j) Third-Party Benefit. Nothing in this Agreement, express or implied,
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is intended to confer upon any other person any rights, remedies, obligations or
liabilities of any nature whatsoever.
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(k) No Waiver. No delay on the part of the Company in exercising any
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right hereunder shall operate as a waiver of such right. No waiver, express or
implied, by the Company of any right or any breach by Consultant shall
constitute a waiver of any other right or breach by Consultant.
(l) Jurisdiction and Venue. THIS AGREEMENT MAY BE ENFORCED IN ANY FEDERAL
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COURT OR STATE COURT SITTING IN ORANGE COUNTY, CALIFORNIA, AND EACH PARTY
CONSENTS TO THE JURISDICTION AND VENUE OF ANY SUCH COURT AND WAIVES ANY ARGUMENT
THAT VENUE IN SUCH FORUM IS NOT CONVENIENT. IF ANY PARTY COMMENCES ANY ACTION
UNDER ANY TORT OR CONTRACT THEORY ARISING DIRECTLY OR INDIRECTLY FROM THE
RELATIONSHIP CREATED BY THIS AGREEMENT IN ANOTHER JURISDICTION OR VENUE, ANY
OTHER PARTY TO THIS AGREEMENT SHALL HAVE THE OPTION OF TRANSFERRING THE CASE TO
THE ABOVE-DESCRIBED VENUE OR JURISDICTION OR, IF SUCH TRANSFER CANNOT BE
ACCOMPLISHED, TO HAVE SUCH CASE DISMISSED WITHOUT PREJUDICE.
(m) Arbitration. Any claim or dispute of any nature between the parties
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hereto arising directly or indirectly from the relationship created by this
Agreement shall be resolved exclusively by arbitration in Orange County,
California, in accordance with the applicable rules of the American Arbitration
Association. The fees of the arbitrator(s) and other costs incurred by the
parties in connection with such arbitration shall be paid by the party which is
unsuccessful in such arbitration. The decision of the arbitrator(s) shall be
final and binding upon both parties. Judgment of the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereof. In the
event of submission of any dispute to arbitration, each party shall, not later
than 30 days prior to the date set for hearing, provide to the other party and
to the arbitrator(s) a copy of all exhibits upon which the party intends to rely
at the hearing and a list of all persons each party intends to call at the
hearing.
(n) Waiver of Jury Trial. EACH PARTY IRREVOCABLY WAIVES ANY AND ALL RIGHT
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TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
(o) Remedies. The parties agree that money damages may not be an adequate
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remedy for any breach of the provisions of this Agreement and that any party
may, in its discretion, apply to any court of law or equity of competent
jurisdiction for specific performance and injunctive relief in order to enforce
or prevent any violations this Agreement, and any party against whom such
proceeding is brought hereby waives the claim or defense that such party has an
adequate remedy at law and agrees not to raise the defense that the other party
has an adequate remedy at law.
(p) Advice of Counsel. Each party acknowledges that it has been advised
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by counsel in the negotiation, execution and delivery of this agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
set forth in the first paragraph.
RAPIDTRON, INC.
/s/ Xxxx Xxxxx
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Xxxx Xxxxx, President
CONSULTANT
/s/ Xxxx Xxxxxxx
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(Address)
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EXHIBIT A TO CONSULTING AGREEMENT
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DESCRIPTION OF CONSULTING SERVICES:
A. to provide general consulting services to the Company in connection
with the development of new business ventures;
B. to participate in efforts to raise capital for the Company, but only
to assist in presentations and not to source funds;
C. to assist in strategic business planning for the Company and advise
the Company with respect to its capital structure;
D. to perform a financial and strategic review of the Company and to
assist the Company in formulating its future strategy;
E. to assist the Company in the performance of due diligence related to
potential business arrangements;
F. to provide general consulting services on such matters as may be
requested by the Board of Directors of the Company; and
G. to assist the Company in developing marketing and promotional
strategies.
RAPIDTRON, INC. CONSULTANT
By /s/ Xxxx Xxxxx /s/ Xxxx Xxxxxxx
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Its President
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(Type or print name)
Date 11-12-03 Date 11/12/03
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EXHIBIT B TO CONSULTING AGREEMENT
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TO: RAPIDTRON, INC.
DATE:
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SUBJECT: Background Technology
1. Except as listed in Section 2 below, the following is a complete list
of all inventions or improvements relevant to the subject matter of my
consulting services to RAPIDTRON, INC. (the "Company") that have been made or
conceived or first reduced to practice by me, alone or jointly with others,
prior to my engagement by the Company:
[____] No inventions or improvements
2. Due to a prior confidentiality agreement, I cannot complete the
disclosure under Section 1 above with respect to inventions or improvements
generally listed below, the proprietary rights and duty of confidentiality with
respect to which I owe to the following party(ies):
Invention or Improvement Party(ies) Relationships
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1.
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2.
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3.
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