Exhibit 10.3
CONSULTING AGREEMENT
THIS AGREEMENT effective the 23rd day of June, 1999.
AMONG:
SILVERWING SYSTEMS CORPORATION, a company duly
incorporated pursuant to the laws of the State of Nevada
(herein called "Silverwing")
OF THE FIRST PART
AND:
CAGE CONSULTING LTD., a company duly incorporated
pursuant to the laws of British Columbia
(herein called the "Consultant")
OF THE SECOND PART
WITNESSES THAT WHEREAS:
A. At the date hereof, the only investment and undertaking of Silverwing is the
holding of all of the issued and outstanding shares of Advertain On-Line Canada
Inc. ("AOL");
B. AOL is in the business of creating and developing computer software for an
Internet web site called "Xxxxxxxxx.xxx" and maintaining and operating the said
web site. The primary purpose of the web site is to collect and distribute
entertaining advertising on the Internet;
C. The Consultant has the experience, knowledge and skill in computer software
development to provide the necessary consulting services to Silverwing and AOL;
D. The Consultant employs individuals who are knowledgeable and have special
skills and abilities in computer software development and the management and
operation of an Internet web site and who have background in and knowledge of
the business of Silverwing and AOL;
E. Silverwing requires the consulting services of the Consultant to carry on its
business and the business of AOL;
F. The Board of Directors believes that the consulting services of the
Consultant are critical to the business of Silverwing and its wholly-owned
subsidiary, AOL;
G. Each of Silverwing and the Consultant have agreed to reduce to writing the
terms of the consulting agreement as provided herein.
NOW THEREFORE in consideration of the premises and of the covenants and
agreements of the parties hereinafter set forth, the parties hereto covenant and
agree each with the other as follows:
1. DEFINITIONS
1.1 In this Agreement:
a) "AOL" means Advertain On-Line Canada Inc.;
b) "Associated" and "Affiliate" have the meanings ascribed thereto by the
Company Act, R.S.B.C. 1979, c.59, as amended;
c) "Board of Directors" means the duly executed board of directors of
Silverwing;
d) "Change of Control" means any change in the holding, direct or indirect, of
shares of either Silverwing or AOL as a result of which a person, or a
group of persons, or persons acting in concert, or persons Associated or
Affiliated with any such person or group are in a position to exercise
effective control of either of Silverwing or AOL, other than as a result of
a public offering and other than as a result of an issue of shares to a
third party pursuant to a decision of the Board of Directors of either
Silverwing or AOL, whichever is the case, and for the purposes of this
Agreement, a person or group of persons holding shares and/or other
securities in excess of the number which, directly or following conversion
thereof, would entitle the holders thereof to cast more than 20% of the
votes attaching to all shares of any of Silverwing or AOL which may be cast
to elect directors of such companies, respectively, shall be deemed to be
in a position to exercise effective control of either of Silverwing or AOL,
whichever is the case;
e) "Consulting Fee" means the sum of USD$60,OO0 per annum or such greater
amount as may be determined pursuant to Section 4 hereof;
f) "Permanent Disability" means permanent disability as certified by a
qualified medical practitioner;
g) "Services" means the service to be provided by the Consultant to Silverwing
hereunder which services shall consist of computer software development
services, the provisions of technical services and computer support and
marketing services;
h) "Silverwing" means Silverwing Systems Corporation;
i) "Term" means the two year period set out in Clause 2.2 hereof and includes
any renewal term.
ENGAGEMENT OF SERVICES
2.1 ENGAGEMENT
Silverwing hereby engages the Consultant, to provide the Services and the
Consultant hereby accepts the engagement with Silverwing upon the terms and
conditions herein set forth.
2.2 Term
The Term of this Agreement shall be for two (2) years from June , 1999 and this
Agreement shall remain in force during the Term, subject to earlier termination
as provided herein, and will be automatically renewed for successive terms of
two (2) years unless either party gives written notice of non-renewal not less
than six (6) months prior to the expiry of any Term.
DUTIES AND OBLIGATIONS
3.1 Duties
The Consultant shall provide consulting services with respect to the creation,
development and promotion of the web site "Xxxxxxxxx.xxx" and the computer
software in connection therewith.
3.2 Assistance
Silverwing agrees to employ or to cause AOL to employ such individuals with the
required training and skills as are considered by the Consultant to be necessary
in order to assist the Consultant in the discharge of its duties hereunder. The
Consultant shall be permitted to use an office within Silverwing's premises and
Silverwing shall provide reasonable secretarial and administrative support and
computer equipment.
3.3 Reporting
The Consultant shall report to the Board of Directors and take direction from
the Board of Directors by resolution, minutes or other written communication. In
the absence of, or pending such written form of communication from the Board of
Directors on any matter, the Consultant will take direction from the Chairman of
the Board of Directors or the Chief Executive Officer of Silverwing or such
other person or persons as may be determined by the Board of Directors from time
to time.
3.4 Time and Effort
During the Term and any renewal thereof, the Consultant and its employees shall
devote such time, attention, labour and skill to the Services as is necessary to
carry out the duties hereunder. The Consultant shall be free to devote such
portion of its time, energy, effort and skill as the Consultant sees fit and to
perform the Consultant's duties when and where it sees fit, as long as the
Consultant performs the Services set out in this Agreement in a timely fashion.
3.5 Confidentiality and non-Competition
The Consultant recognizes and understands that in performing the duties and
responsibilities provided in this Agreement, it will occupy a position of trust
and confidence, pursuant to which it will develop and acquire wide experience
and knowledge with respect to all aspects of the manner in which the business of
Silverwing and AOL is conducted. It is the intent and agreement of the
Consultant and of Silverwing that such knowledge and experience shall be used
solely and exclusively in furtherance of the business interests of Silverwing
and AOL and not in any manner which would be detrimental to either of them. In
the event of termination of this agreement, the Consultant agrees to keep
confidential all information of a confidential or proprietary nature concerning
Silverwing and AOL and their subsidiaries and Affiliates and their respective
operations, assets, finances, business and affairs and further agrees not to use
such information for its own advantage, provided that nothing herein shall
prevent disclosure of information which is publicly available or which is
required to be disclosed under appropriate statutes, rules of law or legal
process or which is necessary to discl~se for the conduct of the business of
either of AOL and Silverwing.
FEES
4.1 Consulting Fees
The Consultant shall be paid the Consulting Fee commencing June , 1999 and,
unless otherwise agreed, the Consulting Fee shall be paid in equal monthly
installments and will be due and payable in advance in each month during the
Term. The Board of Directors may determine that the Consultant is entitled to an
increased consulting fee on the anniversary date of this Agreement and/or at the
end of the fiscal year of Silverwing taking into account the services performed
by the Consultant, the performance by the Consultant during the prior period,
the Consultant's contribution to the success of Silverwing and/or AOL in
achieving their respective corporate and financial objectives and the financial
results or performance by Silverwing and/or AOL in the prior period.
4.2 Annual Review of Consulting Fee
The Consulting Fee shall be subject to annual review for increase by the Board
of Directors and upon completion of the review, the adjusted Consulting Fee
shall be payable as aforesaid from the anniversary date of the commencement of
the Consulting Fee. In any event, the Consulting Fee shall be the minimum salary
payable to the Executive.
4.3 Expenses
In addition, to the Consulting Fee, Consultant shall be entitled to
reimbursement for reasonable expenses incurred by it in connection with the
performance of its duties and responsibilities hereunder, including without
limitation, acquiring and owning a suitable automobile or automobiles for a key
employee or employees and travel expenses, upon presentation of proper accounts,
statements, invoices or receipts.
5. TERMINATION OF AGREEMENT
5.1 Consultant's Right to Terminate
The Consultant will be entitled to terminate this Agreement:
a) at any time prior to a Change of Control, on not less than 90 days
written notice to Silverwing or at any time following a Change of
Control, on not less than 30 days written notice to Silverwing;
b) if a significant employee of the Consultant is under a Permanent
Disability, on not less than 30 days written notice to Silverwing; or
c) immediately, without notice, if Silverwing is in breach of this
Agreement; provided that Silverwitig may, in its sole discretion,
waive any such notice.
5.2 Silverwing's Right to Terminate
Silverwing may terminate this Agreement:
a) without notice and at any time if the Consultant is in breach of its
material duties or obligations as set forth herein; or
b) at any time on 60 days written notice to the Consultant.
5.3 Notice of Breach
In the event that either party determines that the other is in breach of any of
the covenants, terms or conditions set forth in this Agreement to be performed,
observed or complied with by the other party, the party alleging the breach
shall give written notice to the other party providing a sufficiently detailed
description of the breach and giving five (5) business days to the other party
to cure or remedy the breach.
6. SILVERWING'S OBLIGATIONS ON TERMINATION OF AGREEMENT
6.1 Payment on Termination
Except where the Consultant's engagement is properly terminated by reason of the
Consultant being in breach of its obligations hereunder and where the Consultant
has not cured or remedied the breach after receiving the requisite notice
thereof, Silverwing will pay to the Consultant as liquidated damages and not as
a penalty:
a) the amount obtained when the total Consulting Fee (on a monthly basis)
is multiplied by the number of months remaining in the Term;
b) three (3) times the total annual Consulting Fee payable hereunder;
c) all accrued and unpaid fees and expenses to which the Consultant may
be entitled pursuant to the provisions hereof up to the effective date
of termination; and
d) all reasonable legal fees and expenses incurred by the Consultant as a
result of termination of this Agreement, including all fees and
expenses, if any, incurred in contesting or disputing any such
termination or in seeking to obtain or enforce any nght or benefit
provided by this Agreement.
6.5 Payments
Silverwing acknowledges that the payments set out herein are for the benefit of
the Consultant and it is the intention that the Consultant receive the full
benefit of such payments.
6.6 Interpretation
For greater certainty, if a notice of termination is given pursuant to this
Agreement, the date for determining Silverwing's obligations pursuant to this
Section 6 shall be the date that the notice of termination is given, not the
effective date of termination except where such an interpretation would be
disadvantageous to the Consultant, in
which case the date for determining Silverwing's obligations pursuant to this
Section 6 shall be the actual date of termination.
7. INDEMNITY
7.1 Silverwing shall indemnify and save harmless the Consultant against and
from:
a) any and all charges and claims of every nature and kind whatsoever
which may be brought or made by any person, firm, corporation or
foreign or domestic government, or by any governmental department,
body, commission, board, bureau or agency against the Consultant or
any of its employees or contractors m consequence of its being a
consultant to Silverwing;
b) any and all costs, damages, expenses (including legal fees and
disbursements on a full indemnity basis), fines, liabilities
(statutory and otherwise), losses and penalties which the Consultant
or any of its employees or contractors may sustain, incur or be liable
for in consequence or as a result of providing services to Silverwing
including, without limiting the generality of the foregoing, all
liabilities and penalties at any time imposed or claims at any time
made under or by virtue of any provincial, federal or foreign
legislative enactments; and
c) in particular, and without in any way limiting the generality of the
foregoing, any and all costs, damages, expenses (including legal fees
and disbursements on a full indemnity basis), fines, liabilities,
losses and penalties which the Consultant (or any of its employees or
contractors) may sustain, incur or be liable for as a result of or in
connection with the services provided hereunder.
8. MISCELLANEOUS
8.1 This Agreement shall ensure to and be binding upon Silverwing and its
successors and permitted assigns and the Consultant and its successors or
permitted assigns but otherwise it is not assignable by Silverwing but may be
assigned by the Consultant.
8.2 This Agreement shall be governed and interpreted in accordance with the laws
of the Province of British Columbia which Province shall be the sole and proper
forum with respect to any suits brought with respect to this Agreement.
8.3 In case any one or more of the provisions contained herein shall, for any
reason, be held to be invalid or unreasonable in any respect, such invalidity or
unreasonability shall not affect any other provision of this Agreement and this
Agreement shall be construed as if such invalid or unenforceable provision or
provisions had never been contained herein.
8.4 The headings appearing in this Agreement are for convenience of reference
only and in no way define, limit, or enlarge the scope of meaning under the
provisions of this Agreement.
8.5 Any notice required or permitted to be given under this Agreement will be in
writing and may be given by personal service or prepaid registered mail, posted
in Canada, and addressed to the proper party at the address stated below:
a) if to Silverwing:
SILVERWING SYSTEMS CORPORATION
X/x 000 X. Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: A Cage
b) if to the Consultant:
Cage Consulting Ltd.
0xx Xxxxx 000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
or to such other address as any party may specify by notice. Any notice sent by
registered mail as aforesaid will be deemed conclusively to have been
effectively given on the fifth business day after posting; but if at the time of
posting or between the time of posting and the third business day thereafter
there is a strike, lockout or other labour disturbance affecting postal service,
then such notice will not be effectively given until actually received.
8.6 Wherever the singular or masculine is used in this Agreement the same shall
be deemed to include the plural, feminine or body politic or corporate and also
the successors and assigns of the parties hereto and each of them where the
context of the parties so require.
8.7 No modifications of this Agreement shall be effective unless set forth in
writing and signed by both Silverwing and the Consultant.
IN WITNESS WHEREOF the parties have executed this Agreement as of the date set
forth above.
SILVERWING SYSTEMS CAGE CONSULTING LTD.
CORPORATION
Per: Per:
/s/ Xxx Xxxxxx /s/ A Cage
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This is page 8 of a Consulting Agreement effective 23rd if June 1999 between
Silverwing Systems Corporation and Cage Consulting Ltd.
For good and valuable consideration received by the undersigned, the receipt
whereof is hereby acknowledged, the undersigned, ADVERTAIN ON-LINE CANADA INC.,
the wholly-owned subsidiary of Silverwing Systems Corporation, hereby covenants
and agrees to indemnify and save harmless Cage Consulting Ltd. from any and all
claims, losses, expenses and damages which Cage Consulting Ltd. may incur or
suffer if Silverwing does not fulfill, satisfy and perform its obligations under
the within Consulting Agreement including, without limitation, payment of the
consulting fee by Silverwing Systems Corporation to Cage Consulting Ltd.
ADVERTAIN ON-LINE CANADA INC.
Per:
/s/ A Cage
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