MANAGEMENT SERVICES AGREEMENT
Exhibit 10.3
This Management Services Agreement
(this “Agreement”) is made and entered into effective the ___ day of February,
2010 by and among Core Equity Group LLC, with its offices located at 000 Xxxxxxx
Xxxxxx, Xxxxx 000, Xxx Xxxx, Xxx Xxxx 00000 (the “Consultant”), Xxx Xxxxxxx, an
individual and a principal of the Consultant (the “Executive”), and Advance
Nanotech, Inc., with its offices located at 000 Xxxxx Xxxxxxxxx, Xxxxx 000,
Xxxxxxxxxx, Xxx Xxxx 00000 (the “Company”).
The Company desires to have the
Consultant provide the Company with the management services described more fully
herein, the Consultant desires to provide such services and the Executive is
willing to serve the Company in the capacities described more fully
herein.
It is therefore agreed as
follows:
1. Management
Services.
(a) The
Consultant shall provide the Company with the management services (collectively,
the “Services”) of an individual to serve as (i) a member for the Company’s
Board of Directors (the “Board”), (ii) the Principal Executive Officer of the
Company reporting to the Board and (iii) the Principal Financial Officer of the
Company reporting to the Board.
(b) Unless
and until the Company and the Consultant determine otherwise, the Executive
shall be the individual to serve as the director on the Board, the Principal
Executive Officer and the Principal Financial Officer of the Company pursuant to
this Agreement. The Executive hereby consents to serve in such
capacities, accepts such management responsibility and agrees to render his
services hereunder fully, faithfully and to the best of his ability subject to
the direction of the Board.
(c) The
Company shall provide the Consultant and the Executive with such financial and
administrative support as either of them may reasonably request in connection
with the performance of the services.
(d) The
Company agrees to nominate the Executive for election to the Board by the
Company’s stockholders and for election as an officer of the Company by the
Board.
(e) In
such capacity, the Executive shall provide reports to the Board on issues,
resolutions and strategy regularly for review by the Board at scheduled
meetings
2. Term and
Termination. Unless earlier terminated as provided herein
below, the term for the Consultant’s providing the Services under this Agreement
shall commence on the date hereof, shall continue for a period of twelve (12)
months and shall thereafter continue on a month to month basis with the mutual
agreement of the parties. The Company shall have the right to
terminate this Agreement (i) at any time effective immediately upon delivery of
notice to the Consultant if such termination is for Cause or is because of the
Executive’s death, resignation or failure to be reelected to the Board or as an
officer of the Company and (ii) at any time upon sixty (60) days’ notice if such
termination without Cause. The Consultant and the Executive shall
have the right to terminate at any time effective immediately upon delivery of
notice. Upon termination, the Company shall pay the Consultant all
amounts for the Services performed and the unpaid expenses incurred through the
effective termination date. As used herein, “Cause” means (i) the
conviction of the Executive of a felony or of any criminal act involving moral
turpitude, (ii) the Executive’s deliberate or recurrent refusal to perform
duties reasonably requested by the Board, (iii) intentional fraud or
embezzlement, (iv) violation of the Federal securities laws, (v) gross
misconduct or gross negligence in connection with the performance of the
Executive’s duties, or (vi) a material breach of any term or condition of this
Agreement and the failure by the Consultant or the Executive to cure any such
breach within 15 days after receipt of written notice from the Company
describing such breach in reasonable detail and identifying such occurrence or
circumstance as Cause hereunder.
3. Compensation. In
consideration for providing the Services, the Company shall pay the Consultant
as follows:
(a) cash
consideration of $7,500 per month with the first payment to be made upon full
execution of this Agreement and the second payment on March 1, 2010 and each
subsequent payment made on the first of the month thereafter;
(b) equity
consideration of 25,000 shares of the Company’s common stock per month,
beginning upon execution of this Agreement; and
Notwithstanding
the foregoing, in the event the Consultant or the Executive find that they are
spending more or less time than the anticipated in performing the Services, the
Consultant and the Company shall renegotiate the compensation to be paid the
Consultant hereunder.
4. Expenses. The
Company shall reimburse the Consultant in accordance with Company’s regular
policy for all reasonable expenses incurred by the Consultant in connection with
the performance of the Services upon presentation of appropriate documentation
covering those expenses.
5. Confidentiality. The
Consultant and the Executive acknowledge that each of them will have access to
information of a nature not generally disclosed to the public. Each of them
agrees throughout the term of this Agreement and thereafter to keep confidential
and not disclose to anyone, unless legally compelled to do so, such information
as the Company deems confidential and proprietary, including without limitation
the Company’s business and strategic plans, financial details, computer
programs, manuals, contracts, current and prospective client and supplier lists
and all other documentation, business knowledge, data, material, property and
supplier lists and developments owned, possessed or controlled by the
Company. Such confidential information may or may not be designated
as confidential or proprietary and may be in oral, written or electronic
format. Upon termination of this Agreement, the Consultant and the
Executive shall, at Company’s option, either return to the Company or destroy
all of the Company’s confidential and proprietary information in its possession
and promptly certify in writing that it has done so.
6. Indemnification. The
Company agrees to indemnify the Consultant and the Executive in accordance with
the indemnification provisions attached to this Agreement as Annex A and
incorporated herein and made a part thereof.
7. Miscellaneous.
(a) Any
notice or other communication under this Agreement shall be in writing and shall
be considered given when delivered personally, mailed by registered or certified
mail, return receipt requested, delivered by overnight courier or faxed (with
confirmation receipt report) to the parties at the addresses set forth below (or
at such other address as a party may specify by notice to the
other):
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If to the
Company:
Attn: Board
of Directors
000
Xxxxx Xxxxxxxxx, Xxx 000
Xxxxxxxxxx,
XX 00000
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If to the Consultant or the
Executive:
Core
Equity Group LLC
Attn:
Xxx Xxxxxxx
000
Xxxxxxx Xxxxxx, Xxx 000
Xxx
Xxxx, XX 00000
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(b) The
relationship between the Consultant and the Company is that of independent
contractors. The Executive, the Consultant and the Consultant’s other
employees are independent consultants to the Company and not employees of
Company. Neither the Executive nor the Consultant nor any of the
Consultant’s other employees shall be eligible for any benefits made available
to employees of the Company.
(c) This
Agreement contains, and is intended as, a complete statement of all the terms of
the arrangements among the parties with respect to this subject matter,
supersedes all previous agreements and understandings with respect to those
matters, and cannot be changed except by an agreement in writing signed by the
parties.
(d) This
Agreement shall be governed by and construed in accordance with the laws of the
State of New York applicable to agreements made and to be performed in New York
and each party submits to the jurisdiction and venue of the courts situated in
New York.
(e) The
failure of a party to insist upon strict adherence to any term of this Agreement
on any occasion shall not be considered a waiver or deprive that party of the
right thereafter to insist upon strict adherence to that term of any other term
of this Agreement. Any waiver must be in writing.
(f) The
parties acknowledge that this Agreement contemplates certain personal services
of the Consultant and the Executive and accordingly neither this Agreement nor
any of the obligations of the Consultant or its employees including the
Executive may be assigned or delegated without Company’s prior
consent.
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CORE
EQUITY GROUP LLC
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By:
/s/ Xxx
Xxxxxxx
Name: Xxx Xxxxxxx
Title: Managing Partner
Date: February 23,
2010
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By:
/s/ Xxxxx
Xxxx
Name:
Xxxxx
Xxxx
Title: Director
Date: February
23, 2010
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XXX
XXXXXXX
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By:
/s/ Xxx
Xxxxxxx
Name: Xxx
Xxxxxxx
Title: Individual
Date:
February 23,
2010
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Annex
A
INDEMNIFICATION
PROVISIONS
Advance Nanotech, Inc. (the “Company”),
agrees to indemnify and hold harmless Core Equity Group LLC (“Consultant”) and
Xxx Xxxxxxx (“Executive”) against any and all losses, claims, damages,
obligations, penalties, judgments, awards, liabilities, costs, expenses, and
disbursements (and any and all actions, suits, proceedings, and investigations
in respect thereof and any and all legal and other costs, expenses, and
disbursements in giving testimony or furnishing documents in response to a
subpoena or otherwise), including, without limitation the costs, expenses, and
disbursements, as and when incurred, of investigating, preparing, or defending
any such action, suit, proceeding, or investigation (whether or not in
connection with litigation in which Consultant or Executive is a party),
directly or indirectly, caused by, relating to, based upon, arising out of, or
in connection with Consultant’s or Executive’s acting for the Company,
including, without limitation, any act or omission by Consultant or Executive in
connection with its acceptance of or the performance or non-performance of its
obligations under the Management Services Agreement dated as of February __,
2010 by and among Consultant, Executive and the Company, as it may be amended
from time to time (the “Agreement”); provided, however, such indemnity agreement
shall not apply to any portion of any such loss, claim, damage, obligation,
penalty, judgment, award, liability, cost, expense, or disbursement to the
extent it is found in a final judgment by a court of competent jurisdiction (not
subject to further appeal) to have resulted primarily and directly from the bad
faith or willful misconduct of Consultant or Executive. The Company also agrees
that Consultant and Executive shall not have any liability (whether direct or
indirect, in contract or tort or otherwise) to the Company for or in connection
with the engagement of Consultant or Executive, except to the extent that any
such liability is found in a final judgment by a court of competent jurisdiction
(not subject to further appeal) to have resulted primarily and directly from
Consultant or Executive’s bad faith or willful misconduct.
These Indemnification Provisions shall
be in addition to any liability which the Company may otherwise have to
Consultant or Executive or the persons indemnified below in this sentence and
shall extend to the Consultant, its affiliated entities, managers, directors,
officers, employees, legal counsel, agents, and controlling persons (within the
meaning of the federal securities laws). All references to Consultant
in these Indemnification Provisions shall be understood to include any and all
of the foregoing including Executive.
If any action, suit, proceeding, or
investigation is commenced, as to which Consultant or Executive proposes to
demand indemnification, it shall notify the Company with reasonable promptness;
provided, however, that any failure by Consultant or Executive to notify the
Company shall not relieve the Company from its obligations
hereunder. Consultant and Executive shall have the right to retain
counsel of its own choice to represent it, and the Company shall pay the
reasonable fees, expenses, and disbursements of such counsel; and such counsel
shall, to extent consistent with its professional responsibilities, cooperate
with the Company and any counsel designated by the Company. The
Company shall be liable for any settlement of any claim against Consultant
and/or Executive made with the Company’s written consent, which consent shall
not be unreasonably withheld. The Company shall not, without the
prior written consent of Consultant and/or Executive, settle or compromise any
claim, or permit a default or consent to the entry of any judgment in respect
thereof, unless such settlement, compromise, or consent includes, as an
unconditional term thereof, the giving by the claimant to Consultant and
Executive of an unconditional release from all liability in respect of such
claim.
In order to provide for just and
equitable contribution, if a claim for indemnification pursuant to these
Indemnification Provisions is made, but it is found in a final judgment by a
court of competent jurisdiction (not subject to further appeal) that such
indemnification may not be enforced in such case, even though the express
provisions hereof provide for indemnification in such case, then the Company, on
the one hand, and Consultant and Executive, on the other hand, shall contribute
to the losses, claims, damages, obligations, penalties, judgments, awards,
liabilities, costs, expenses, and disbursements to which the indemnified persons
may be subject in accordance with the relative benefits received by the Company,
on the one hand, and Consultant and Executive, on the other hand, and also the
relative fault of the Company, on the one hand, and Consultant and Executive on
the other hand, in connection with the statements, acts, or omissions which
resulted in such losses, claims, damages, obligations, penalties, judgments,
awards, liabilities, costs, expenses, or disbursements and the relevant
equitable considerations shall also be considered. No person found
liable for a fraudulent misrepresentation shall be entitled to contribution from
any person who is not also found liable for such fraudulent
misrepresentation. Notwithstanding the foregoing, Consultant and
Executive shall not be obligated to contribute any amount hereunder that exceeds
the amount of fees previously received by Consultant and/or Executive pursuant
to the Agreement.
Neither termination nor completion of
the engagement of Consultant and Executive referred to above shall affect these
Indemnification Provisions which shall then remain operative and in full force
and effect.
