Exhibit 10.6
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT, made effective as of the 1st day of
August, 1999, by and between FIRST SCIENTIFIC, INC., a Delaware
corporation with its principal office located at 0000 Xxxx 0000
Xxxxx, Xxxxx 000, Xxxxx, Xxxx 00000, and any existing or future
subsidiary (collectively, the "Company") and XXXXXX X. XXXXXX, a
resident of Salt Lake City, Utah (the "Consultant").
The Company agrees to engage the Consultant to perform certain
marketing and management consulting and other services as detailed
hereinafter for the Company and the Consultant agrees to perform
such services on the terms and conditions hereinafter set forth.
1. TERM. The services of Consultant hereunder shall commence
on the 1st day of August, 1999 and continue for twelve months (the
"Consulting Period") from the date hereof, and shall be renewable
from year to year thereafter, unless a majority of the directors of
the Company or shareholders holding a majority of the outstanding
voting shares of Company common stock should vote not to extend the
Consulting Period and Consultant is notified of such vote at least
sixty (60) days prior to the end of the Consulting Period or any
extension thereof. This Agreement may be extended for additional
periods by written agreement between the Company and the Consultant.
2. DUTIES AND SERVICES. The Consultant shall assist the
Company in the role of a marketing consultant, and shall further
offer suggestions with respect to general management matters. The
Consultant agrees to perform all of his duties hereunder pursuant to
the direction of the Board of Directors of the Company and in
accordance with performance accountability standards which shall be
set by the Board of Directors from time to time. Consultant shall
also assist the Company in such specific other tasks as the
Consultant may be directed from time to time by the President or the
Board of Directors of the Company. The Consultant shall also serve
as Chairman of the Board of Directors of the Company unless replaced
by the Shareholders at a duly called and convened meeting; provided,
however, that any such replacement, or a resignation by the
Consultant as Board Chairman shall not diminish Consultant's
responsibilities to serve as a Marketing Consultant hereunder, nor
shall either such action diminish or cancel the obligations of the
Company under any Stock Option Plan or hereunder with respect to
payment of the full consulting fee and benefits during the remainder
of the Consulting Period or any extension thereof.
3. COMPENSATION. As compensation for his agreed services
hereunder, the Company shall pay the Consultant a consulting fee of
Seven Thousand Five Hundred Dollars ($7,500) per month during the
Consulting Period. The Consultant agrees to his duties and
obligations as described herein and agrees to devote at least forty
percent (40%) of his time and his best efforts to the performance of
his duties to the best of his ability, as may be required under this
Agreement. The Company agrees and acknowledges that the Consultant
shall not be exclusively retained by the Company and that the
Consultant shall have the right to act as a consultant on behalf of
persons other than the Company and to be an officer and director in
other companies during the term of this Agreement.
4. OWNERSHIP OF INTELLECTUAL PROPERTY. Consultant hereby
agrees that all intellectual property, whether or not protectable
under patent, trademark, copyright or other laws (whether or not the
Company chooses to file for such protection), which is conceived,
developed, enhanced or extended wholly or partially by Consultant
during the Consulting Period under this Agreement, including any
extensions or renewals, shall constitute "work for hire" and shall
be and remain the property of the Company.
5. NON-COMPETITION. The Consultant agrees that (a) he will
not during the Consulting Period engage in, or otherwise directly or
indirectly be employed by, or act as a consultant to, or be a
director, officer, employee, owner, or partner of, any other
business or organization which shall be in competition with the
Company, unless the Consultant ceases to be a consultant or employee
for the Company, and (b) unless the consulting relationship is
ceased as a result of the malfeasance or nonfeasance on the part of
the Company, for a period of two (2) years after termination
(including for "just cause") of his consulting or employment
relationship with the Company under this Agreement, Consultant shall
not directly or indirectly compete with, be engaged in the same
business as the Company, or be employed by, or act as consultant to,
or be a director, officer, employee, owner, or partner of, any
business or organization which, at the time of such cessation,
competes with and is engaged in the same business as the Company in
the same geographical area as the Company, except that this
restriction shall not prohibit the Consultant from owning up to five
percent (5%) of the capital stock of public companies that engage in
a business similar to or in competition with the Company.
6. TERMINATION OF CONSULTING RELATIONSHIP. Notwithstanding
anything to the contrary stated in the Agreement, the consulting
arrangement of the Consultant with the Company and his right to any
and all compensation to which he would otherwise be entitled shall
terminate upon the earliest to occur of the following events: (i)
his death; (ii) permanent disability (as hereafter defined), (iii)
one year from the effective date of this Agreement, or from the
beginning of an applicable one year extension of the "Consulting
Period"; or (iv) upon written notice to the Consultant for "just
cause" as defined in paragraph 6 below.
A. "Permanent Disability" for purposes of this Agreement. The
Consultant shall be considered to have a "permanent disability" if,
in the judgment of two (2) licensed physicians (one of whom shall be
selected by the Board of Directors of the Company and the other
selected by the Consultant (or his personal representative)), the
Consultant is unable to perform his customary duties under this
Agreement because of a physical or mental impairment or if the
Consultant is unable to perform his customary duties and
responsibilities under this Agreement for one hundred twenty (120)
days in any twelve (12) month period for any reason whatsoever;
provided, however, that the Company shall only pay the Consultant
his compensation package as provided by paragraph 2 above for up to
thirty (30) days during said disability period. The determination
by such physicians shall be binding and conclusive for all purposes.
Upon the expiration of said one hundred twenty (120) day period,
the Company may, in its sole discretion, terminate this Agreement.
7. TERMINATION FOR "JUST CAUSE."
A. "Just cause" for purposes of this Agreement shall mean: (i)
the commission by the Consultant of acts constituting theft,
embezzlement, obtaining funds or property under false pretenses or
gross misconduct with respect to the property of the Company; (ii)
the continuation, after written warning by the Board of Directors of
the Company, of a habitual pattern of personal conduct by the
Consultant involving alcohol, drugs or the like that adversely
impacts his ability to perform his duties hereunder for the benefit
of the Company; or (iii) the commission by the Consultant of a
material act in breach of the confidentiality provisions of this
Agreement or similar breach of trust against the Company.
B. In the event that the Consultant is terminated without
"just cause" as that term has been defined above, and the Company
fails to make timely payments of any compensation due him under this
Agreement, the Consultant will be entitled to be paid all reasonable
legal fees and costs incurred as the result of any legal action
taken by him to challenge such termination and to collect such
unpaid compensation and for other damages. It is further agreed
that the Company will have no right to challenge the
"reasonableness" of legal fees and costs by the Consultant in any
successful challenge to a determination by "just cause" if the total
amount does not exceed fifteen percent (15%) of the unpaid
compensation and other damages awarded him by the Court.
C. In the event the Company elects to terminate the Consultant
under this Agreement for "just cause" as defined above, the Company
shall send written notice to the Consultant describing in reasonable
detail what actions of the Consultant are deemed to constitute "just
cause."
D. The Consultant shall be given a reasonable opportunity to
demonstrate to the Board of Directors of the Company, at a meeting
which he may call for the purpose, that no "just cause" exists for
his termination. No waiver by the Company of any default by the
Consultant or the breach by him of his obligations to perform under
this Agreement shall be deemed a waiver of any future breach or
default, whether or not such breach or default is of the same nature.
8. COVENANT OF CONFIDENTIALITY. The Consultant agrees that
the knowledge, information and relationship with existing or
prospective products, customers, suppliers, dealers, agents, brokers
and representatives, and the knowledge of the business, methods,
systems, plans and policies of the Company which he hereafter shall
establish, receive or obtain as a consultant to or employee of the
Company or in connection with services performed pursuant to this
Agreement, are valuable and unique assets. During the Consulting
Period under this Agreement, including extensions and renewals, and
for two (2) years following termination thereof for any reason,
Consultant shall not (otherwise than pursuant to his duties
hereunder), directly or indirectly, use, divulge, furnish or make
accessible to anyone, without the prior written consent of the Board
of Directors of the Company, any such knowledge or information
pertaining to the Company, or the business, shareholders, personnel,
products, methods, systems, plans or policies thereof, to any
person, firm, corporation or other entity, for any reason or purpose
whatsoever.
9. ENTITLEMENT OF THE COMPANY TO INJUNCTIVE RELIEF. The
Consultant acknowledges that the services to be rendered by him are
of a special, unique and extraordinary character and, in connection
with such services, he will have access to confidential information
vital to the business of the Company. The Consultant consents and
agrees that, if he violates any provision of this Agreement with
respect to non-competition and confidentiality or if he otherwise
diverts the Company's customers, clients, employees, agents,
brokers, or representatives, irreparable harm would be sustained.
Therefore, in addition to any other remedies which the Company may
have under this Agreement or otherwise, the Company shall be
entitled to apply to any court of competent jurisdiction for an
injunction restraining the Consultant or any other party acting in
concert with him from committing, continuing or participating in a
violation of this Agreement.
10. INDEMNIFICATION AND PAYMENT OF LITIGATION EXPENSES.
A. The Company agrees to indemnify the Consultant against
reasonable costs, disbursements and counsel fees and amounts paid or
incurred in satisfaction of settlements, judgments, fines and
penalties, in connection with any proceeding involving the
Consultant by reason of any action taken by him in his capacity as a
consultant to or as an officer, director or duly authorized
representative of the Company.
B. The termination of any proceeding by judgment, order,
settlement, conviction or upon a plea of nolo contendere or its
equivalent shall not result in the executive being required to
reimburse the Company for any amounts paid under this
indemnification provision unless the trier of fact specifically
determines that the Consultant intentionally took the action or
actions complained of for his personal benefit as opposed to that of
the Company.
C. As used in this indemnification provision, the term
"proceeding" means any pending, threatened or completed civil,
criminal, administrative or arbitrative action, suit or proceeding,
and any appeal therefrom and any inquiry or investigation which
would lead to such action, suit or proceeding.
D. In any proceeding subject to this indemnification
provision, the Consultant will be entitled to retain an attorney of
his own choice to represent him personally.
E. Consultant shall be entitled to advances or reimbursements
for reasonable costs, disbursements and counsel fees incurred by the
Consultant in his capacity as an officer, director, or duly
authorized representative of the Company in advance of the final
disposition of the proceeding, upon receipt by the Company of a
written undertaking from the Consultant and his counsel that such
amounts will be reimbursed if there is an ultimate determination
that the Consultant intentionally took the action or actions
complained of for his personal benefit.
11. ASSIGNABILITY. Consultant shall have the right to assign
his payments under this agreement to his consulting firm, Client
Synergy Group; provided, however, that all personal services to be
provided by Consultant hereunder must be rendered by Xxxxxx X. Xxxxxx.
12. MODIFICATION. This Agreement sets forth the entire
understanding of the parties with respect to the subject matter
hereof, supersedes all existing agreements between them concerning
the subject matter and may be modified only by a written instrument
duly authorized and executed by the party to be bound.
13. NOTICES. Any notice or other communication required to be
given hereunder shall be in writing and shall be delivered
personally or mailed by Certified Mail Return Receipt Requested, to
the party to whom it is to be given at the address of such party as
set forth on the signature page to this Agreement or to such other
address as the parties shall have furnished in writing in accordance
with the provisions of this section.
14. WAIVER. Any waiver by any party of a breach of any
provision of this Agreement shall not operate as or be construed to
be a waiver of any other breach of such provision or of any breach
of any other provision of this Agreement. The failure of a party to
insist upon strict adherence to any term of this Agreement on one or
more occasions shall not be considered a waiver or deprive that
party of the right hereafter to insist upon strict adherence to that
term or any other term of this Agreement. Any waiver by the Company
must be in writing and authorized by a resolution of the Board of
Directors.
15. BINDING EFFECT. This Agreement shall inure to the benefit
of and shall be binding upon the heirs, executors, administrators,
successors and legal representatives of the Consultant, and shall
inure to the benefit of and be binding upon the company and its
successors. In the event of any sale or other disposition of all or
substantially all of the business of the Company, whether by sale of
stock, sales of assets, merger or otherwise, then its successors and
assigns shall assume the obligations of the Company under this
Agreement.
16. SEPARABILITY. If any provision of this Agreement is
invalid, illegal or unenforceable, the balance of this Agreement
shall remain in effect, and if any provision is inapplicable to any
person, circumstance or jurisdiction, it shall nevertheless remain
applicable to all other persons, circumstances and jurisdictions.
17. HEADINGS. The headings in this Agreement are solely for
convenience of reference and shall be given no effect in the
construction or interpretation of this Agreement.
18. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
19. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Utah without
giving effect to the conflict of laws. The parties hereby
irrevocably consent exclusively to jurisdiction of the courts of the
State of Utah and to any federal court located in such jurisdiction
in connection with any action or proceeding arising out of or
relating to this Agreement, any document or instrument delivered
pursuant thereto, in connection with, or simultaneously with this
Agreement or breach of this Agreement or any such document or
instrument. In the event the services of an attorney are retained
to obtain enforcement of this Agreement by the non-defaulting party,
such party shall be entitled to recover all costs and expenses and
reasonable attorney's fees, whether or not legal proceedings are
initiated to obtain performance of this Agreement by the defaulting
party.
IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the date first above written.
"Company" FIRST SCIENTIFIC, INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Xxxxxxx X. Xxxxxx, President
"Consultant"
/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
