EXHIBIT 10
CONSULTING AGREEMENT
This Consulting Agreement (the "Agreement") is made and entered into as
of January 16, 2001 between Incubator Capital, Inc. (the "Company"), a Delaware
corporation, and Xxxxx Xxxxxxxxx (the "Consultant").
WHEREAS, Consultant has in the past provided consulting services to the
Company for which the Company owes Consultant compensation; and
WHEREAS, Consultant and affiliates of Consultant have previously lent
money in the form of secured convertible promissory notes to the Company and the
Company's affiliates, which monies remain due and owing;
WHEREAS, the Company desires to retain the services of Consultant to
provide on a going forward basis consulting services pursuant to the terms and
conditions of this Agreement;
NOW THEREFORE, in consideration of and for the mutual promises and
covenants contained herein, and for other good and valuable consideration, the
receipt of which is hereby acknowledged, the parties agree as follows:
1. Purpose. Company hereby engages Consultant as a non-exclusive, independent
consultant (and not as an agent, employee, partner or joint venturer) during the
term specified hereinafter to render consulting advice to Company upon the terms
and conditions as set forth herein.
2. Term. This Agreement will be effective for a period of twelve (12) months,
commencing on the date of this Agreement (the "Term"), provided that either
party may terminate this engagement with or without cause at any time upon at
five (5) days prior written notice to the other party. Upon such termination,
except as specifically provided to the contrary in this Agreement, Consultant
and Company shall have no further obligations to each other under this
Agreement.
3. Duties of Consultant.
(a) During the Term, Consultant will provide the Company with such consulting
advice as is reasonably requested by Company with respect to general
troubleshooting and handling of problems and complex situations that occur at
the Company, and the development of a business plan. In performance of these
duties, Consultant will provide Company with the benefits of his reasonable
judgment and efforts.
(b) In connection with rendering his advice hereunder, Consultant and his
employees and agents will be given reasonable access to Company's officers,
premises and records.
(c) Company acknowledges that Consultant's advice pursuant hereto does not and
will not constitute any guarantee or other assurance as to the ability of
Consultant to accomplish any specific goals or plans of Company, and Consultant
makes no representation or warranty as to the success of any advice or
transaction for which the Consultant may provide services for hereunder or as to
whether the Company could obtain more beneficial advice from another consultant.
(d) Company acknowledges that Consultant retains the right to provide consulting
advice to other parties and to engage in other business transactions. Nothing
herein contained will be construed to limit or restrict Consultant in conducting
such business with respect to others, or in rendering advice to others or
conducting any other business.
(e) Company acknowledges that Consultant may take on certain roles as an
officer, director, employee and/or equity owner with other companies that may
engage in businesses competitive with or in conflict with the Company, including
companies that the Company is interested in acquiring or is in the process of
acquiring in whole or in part. Further, the Company acknowledges that it is
aware of and has consented to Consultant's employment by ThemeWare Corp.
4. Compensation. In consideration for Consultant agreeing to provide and
providing the consulting services to be rendered pursuant to this Agreement, the
Company agrees, subject to the applicable requirements of federal and state law
of the United States and of any regulatory authority therein, to issue to
Consultant shares representing 9.9% (the "Shares") of the Company's outstanding
stock. The Shares will be issued to Consultant promptly following the execution
of this Agreement and the effectiveness of a Registration Statement on Form S-8
covering the Shares, but in no event later than January 31, 2001. During the
Term and for a period of 6 months thereafter, if the number of the Company's
issued and outstanding shares is increased, Consultant will be issued that
number of shares of the Company's common stock that will permit Consultant to
retain his 9.9% ownership interest in the Company (the "Additional Shares"). For
each ninety (90) day period during the Term, the Company shall issue the
appropriate number of Additional Shares and shall register such Additional
Shares in a Registration Statement on Form S-8.
5. Expenses. The Company will pay or promptly reimburse Consultant for the
out-of-pocket expenses, including expenses for travel, lodging, and meals, which
(a) are incurred by Consultant in connection with the performance of services
under this Agreement, (b) the Company either (i) authorizes in advance and
confirms in writing or (ii) subsequently determines, in its sole discretion, to
be reasonable under the circumstances, (c) are identified in an invoice
submitted to the Company, and (d) are supported by receipts for individual
expense items of Twenty-Five Dollars ($25) or more.
6. Proprietary Information. Consultant agrees that, except as appropriate to
carry out his duties under this Agreement or as required by law (in the opinion
of Consultant's counsel), he will not use or disclose, without the Company's
prior consent, any information furnished or disclosed (whether before or after
the date hereof) to Consultant by the Company or its employees, agents or
representatives, including without limitation any of the Company's trade secrets
or other proprietary information or information concerning the Company's current
and any future proposed operations, services or products; provided that
Consultant's obligations of nonuse and nondisclosure under this provision will
not be deemed to restrict the use and/or disclosure of information that (a) is
or becomes publicly known or within the public domain without a breach of this
agreement, (b) Consultant can establish was known to it prior to its receipt
thereof, or(c) has been or is subsequently disclosed to Consultant by a third
person who is not under an obligation of confidence to the Company or any of its
affiliates.
7. Representations and Warranties of the Company. The Company represents and
warrants to Consultant as follows:
(a) The Company is a corporation duly incorporated, validly existing, and in
good standing under the laws of the State of Delaware and has all corporate
power and authority, and all corporate authorizations, necessary to enable it to
enter into this Agreement and carry out the transactions that are the subject of
this Agreement.
(b) This Agreement is a valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms.
(c) When issued as provided in this Agreement, the Shares will be duly and
validly issued, fully paid and nonassessable, free and clear of any liens or
encumbrances, and will be free of restrictions on transfer.
(d) When issued as provided in this Agreement, the Shares will have been
registered with the Securities and Exchange Commission and qualified in the
State of California under the California Corporate Securities Laws of 1968, as
amended, or exempt from such qualification.
8. Representations and Warranties of Consultant. The Consultant represents and
warrants to the Company that this Agreement is a valid and binding agreement of
the Consultant, enforceable against the Consultant in accordance with its terms.
9. Indemnification by the Company.
(a) The Company hereby agrees to indemnify, defend and hold harmless Consultant
and each of Consultant's heirs, executors, administrators, attorneys, agents,
employees, representatives, successors and assigns, including any entities in
which Consultant is an officer or equity owner (excluding ThemeWare Corp.), and
each of them ("Indemnified Parties"), from and against all loss, damage,
liability, cost, expense or injury suffered or sustained by him by reason of any
acts or omissions from the date of execution of this Agreement to the date of
termination of this Agreement, whether or not the event of loss occurs during or
after such term arising out of his activities authorized under this Agreement,
including but not limited to securities law claims, and any judgment, award,
settlement, attorneys' fees and/or costs and expenses incurred in connection
with the defense of any actual or threatened action, proceeding or claim
(collectively designated as "Events of Loss"); provided, however, that,
notwithstanding the foregoing, the Indemnified Parties shall not be indemnified
against any Events of Loss attributable to or in connection with any action or
failure to act by the Consultant or such Indemnified Party's constituting a
criminal act under applicable federal or state laws.
(b) Consultant shall give written notice to the Company of the nature, amount
and cause of any claims for indemnification or the commencement of such action
or proceeding in reasonable detail promptly after receipt by the such
Indemnified Party of notice of any claim or the commencement of any action or
proceeding, if a claim with respect thereto is to be made against Company of the
nature described in Section 9(a). Company shall, at the Indemnified Party's
option, compromise or defend, at Company's sole expense and by its own counsel,
which counsel shall be reasonably satisfactory to the Indemnified Party, any
such matter involving the asserted liability. The Indemnified Party shall have
the right at his own expense to participate in the defense of such asserted
liability. Company may settle or compromise any claim against an indemnified
party only if such compromise or settlement results in an unconditional release
of Indemnified Party.
10. Release and Limitation of Liability.
(a) In consideration of entering into this Agreement and Consultant waiving any
rights he may have with regard to monies owed to him for consulting services
provided prior to the execution of this Agreement, the Company, on its own
behalf and on behalf of all of its subsidiaries, affiliated corporations,
companies and divisions (the "Company Parties"), hereby releases, acquits, and
forever discharges Consultant, and his respective present and former assigns,
attorneys, heirs, executors, administrators, and representatives, including any
entities in which Consultant is an officer or equity owner (excluding ThemeWare
Corp.), and each of them ("Consultant Releasees"), of and from any and all
causes of action, claims for relief, lawsuits, charges, complaints, debts,
liens, contracts, agreements, promises, liabilities, demands, damages, losses,
rights, benefits, obligations, attorneys' fees, costs or expenses of any nature
whatsoever, in law, equity or otherwise, whether known or unknown, whether or
not fixed or contingent, whether or not pending before a court, administrative
agency, government authority, or otherwise, which the Company Parties now own,
hold, have or claim to have, may claim to have, or at any time heretofore have
owned, held, had or claimed to have had, against any of the Consultant
Releasees, which arise out of or in any way are related to any prior consulting
or other services or acts committed on behalf of the Company.
(b) The Company's sole right and remedy under this Agreement as against
Consultant shall be the Company's right to terminate this Agreement under
Section 2 above, and the Company hereby expressly waives all other rights and
remedies it may have, including, without limitation, any rights under Section
1542 of the California Civil Code as well as any right to set-off against any
payments due to Consultant under this Agreement any other amount. Section 1542
of the California Civil Code has been duly explained to and is understood by
each party, and reads as follows:
"A general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release, which if
known by him must have materially affected his settlement with the debtor."
The Company acknowledges that it has obtained the advice of legal counsel of its
choice prior to executing this Agreement and represents that the waiver of its
rights set forth in this paragraph 10(b) above is given voluntarily and with
full knowledge of its legal consequences
11. Assignment. This Agreement and the rights hereunder may not be assigned by
either party (except by operation of law) without prior written consent of the
other party, but, subject to the foregoing limitation, this Agreement will be
binding upon and inure to the benefit of the respective successors, assigns and
legal representatives of the parties.
12. Notices and Other Communications. Any notice or other communication required
or permitted to be given under this Agreement must be in writing and will be
deemed effective when delivered in person or transmitted by a facsimile process
(with a prompt written confirmation) or, if outside the hours of 9:00 a.m. to
5:00 p.m. on any business day in the jurisdiction of the addressee, will be
deemed to be given at 9:00 a.m. on the next business day, or on the third
business day after the day on which mailed from within the United States of
America, to the following addresses (or to any other address subsequently
specified by the person to whom the notice or other communication is sent):
If to the Company:
Incubator Capital, Inc.
0000 Xxxxxxxx Xxxx., Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
With a copy to:
Xxxxxxx Xxxxxx, Esq.
Eisner & Associates
0000 Xxxxxxxx Xxxx., Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
If to the Consultant:
Xxxxx Xxxxxxxxx
Graybox, LLC
00000 Xxxxx Xxxxxx Xxxx., Xxxxx 000
Xxx Xxxxxxx, XX 00000
With a copy to:
Xxxxx X. Xxxxxx, Esq.
Graybox, LLC
00000 Xxxxx Xxxxxx Xxxx., Xxxxx 000
Xxx Xxxxxxx, XX 00000
For the purposes of this Agreement, "business day" will refer to a day
in which trading banks are open for business.
13. Captions. The headings of the sections of this Agreement are intended solely
for convenience of reference and are not intended and will not be deemed for any
purpose whatever to modify or explain or place any construction upon any of the
provisions of this Agreement.
14. Attorneys' Fees. In the event any party hereto will institute an action to
enforce any rights hereunder, the prevailing party in such action will be
entitled, in addition to any other relief granted, to reasonable attorneys' fees
and costs.
15. Entire Agreement. This Agreement, together constitutes the entire agreement
between the parties hereto pertaining to the consulting relationship of the
parties and supersedes all prior and contemporaneous agreements and
understandings of the parties, and there are no representations, warranties or
other agreements between the parties in connection with the subject matter
hereof except as specifically set forth herein. No supplement, modification,
amendment, waiver or termination of this Agreement will be binding unless
executed in writing by the parties hereto. No waiver of any of the provisions of
this Agreement will be deemed or will constitute a waiver of any provision
hereof (whether or not similar), nor will waiver constitute a continuing waiver.
16. Severability. If any provision or portion of a provision of this Agreement
is held to be invalid, illegal or unenforceable under applicable law, that
provision or portion will be excluded from this Agreement, but only to the
extent of such prohibition or unenforceability, and the balance of the Agreement
will be interpreted as if that provision or portion were so excluded, and will
be enforceable in accordance with its terms.
17. Governing Law. This Agreement will be governed by, and construed under, the
laws of the State of California as applied to agreements among California
residents entered into and to be performed entirely within California.
18. Counterparts. This Agreement may be executed in counterparts. All of such
counterparts will constitute one and the same agreement. The Company and
Consultant agree that facsimile signatures of this Agreement will be deemed a
valid and binding execution of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
Company: Incubator Capital, Inc.
a Delaware corporation
By: /s/ Xxxxx Xxxxxxx
Name: Xxxxx Xxxxxxx
Title: Chief Executive Officer
Consultant:
/s/ Xxxxx Xxxxxxxxx
Xxxxx Xxxxxxxxx
