CONSULTING AGREEMENT
This
Agreement (the “Agreement”), effective as of October __, 2007 is between Diet
Coffee, Inc., a Delaware corporation (the “Company”) and Xxxxx Xxxxxxxxx (the
“Consultant”).
A. The
parties wish to provide for the engagement of the Consultant by the Company
to
provide sales and product marketing services.
B. The
Consultant wishes to receive compensation from the Company for the Consultant’s
services, and the Company desires reasonable protection of its confidential
business, technical, and proprietary information that has been acquired and
is
being developed by the Company at substantial expense.
The
parties, each intending to be legally bound, agree as follows:
1. Engagement.
Subject
to all of the terms and conditions of this Agreement, the Company agrees to
engage the Consultant for the term of this Agreement, and the Consultant accepts
such engagement. The Consultant shall serve the Company as an independent
contractor and shall not be considered an employee of the Company.
2. Duties.
The
Consultant will perform the following duties (the “Services”):
Subject
to the control of the Board of Directors of the Company and the supervision
of
the Chairman of the Board of the Company, the Consultant will render such
advice, consultation, information, and services regarding the sales and
marketing of the Company’s products. The Consultant shall report to the Chairman
of the Board or the entire Board of Directors of the Company, and the Consultant
shall have direct and unfettered access to the Board of Directors of the
Company.
The
Company understands that the manner and means used by the Consultant to
accomplish the Services is in the sole discretion and control of the Consultant.
3. Statement
of Services.
On the
10th
day of
each month following the execution of this Agreement, Consultant shall provide
the Company with an itemized statement of services that Consultant has rendered
pursuant to this Agreement. Such statement shall be in a form substantially
similar to the form attached hereto as Exhibit
A.
4. Term.
Subject
to earlier termination in accordance with Section 4 below, this Agreement shall
become effective on the date set forth above and will have a term of one month
and shall automatically renew on a month-to-month basis thereafter unless
terminated pursuant to Section 5.
5. Termination.
Subject
to the respective continuing obligations of the Company and the Consultant
under
Sections 8 and 9 below:
(a) Either
party may terminate this Agreement with or without cause upon thirty (30) days’
prior written notice to the other party;
(b) The
Company may terminate this Agreement immediately on written notice to the
Consultant for cause, including, without limitation, fraud, misrepresentation,
theft, embezzlement of assets of the Company, or breach of any provision of
this
Agreement (including failure to provide the statement of services pursuant
to
Section 3); and
(c) This
Agreement will terminate upon Consultant’s death or upon written notice from the
Company in the event of Consultant’s disability that prevents the Consultant
from performing its duties under this Agreement (as described in Section 2
above).
(d) On
termination, the Consultant shall deliver to the Company any supplies,
information, equipment, or any other material provided by the Company for use
in
performing the consulting tasks, and all physical property and documents or
other media (including copies) that contain Confidential
Information.
6. Compensation.
(a) Compensation.
In
consideration of the Consultant’s performance of the Services, the Company shall
pay the Consultant a consulting fee (the “Fee”) of $12,000 per month, due on the
20th
day of
the month. The Company may pay all or part of the Consultant’s compensation in
shares (the
“Shares”) of the Company’s common stock
on the
terms and conditions set forth herein. The number of Shares to be issued shall
be calculated by dividing the amount of the Fee due and owing by the average
of
the Per Share Market Values during the three (3) Trading Days immediately
preceding the date on which the Fee payment is due. The Shares shall be issued
in the form of a stock award under the Company’s 2007 Stock Incentive Plan (or
successor plan) and will be registered as set forth under Section 6(b) below;
provided,
however,
that
Consultant shall have established and adopted a Rule 10b5-1 sales agreement
and
plan in relation to the sale of such shares in substantially the form attached
hereto as Exhibit
B
and
shall sell the shares pursuant to the 10b5-1 plan. For the purposes of this
Section 6(a), “Per
Share Market Value”
means
on any particular date (a) the closing bid price per share of Common Stock
on
such date on the OTC Bulletin Board or on such Subsequent Market on which the
shares of Common Stock are then listed or quoted, or if there is no such price
on such date, then the closing bid price on the OTC Bulletin Board or on such
Subsequent Market on the date nearest preceding such date, or (b) if the shares
of Common Stock are not then listed or quoted on the OTC Bulletin Board or
a
Subsequent Market, the closing bid price for a share of Common Stock in the
over-the-counter market, as reported by the National Quotation Bureau
Incorporated or similar organization or agency succeeding to its functions
of
reporting prices) at the close of business on such date, or (c) if the shares
of
Common Stock are not then reported by the National Quotation Bureau Incorporated
(or similar organization or agency succeeding to its functions of reporting
prices), then the average of the “Pink Sheet” quotes for the relevant conversion
period, as determined in good faith by the Payee.
(b) Registration.
As
soon
as practicable, following the execution of this Agreement, the Company will
set
aside, out of its existing stock compensation plan(s), the Shares and register
such Shares on a Form S-8 or other applicable registration statement, which
the
Company agrees to file, if not already filed, with the Securities and Exchange
Commission (the “Commission”) as soon as practicable after the date
hereof.
(c) Rescission;
Stop Transfers; Buy-In. In
the
event that this Agreement is terminated for “cause” (as defined in Section 5(b)
above), the Company shall have the right, but not the obligation, to rescind
the
issuance of the Shares and place a stop-transfer order with the Company’s
transfer agent with respect to the certificate representing the Shares. In
the
event that Consultant has disposed of any of the Shares prior to such
termination for “cause,” the Consultant shall purchase in the open market the
number of shares of the Company’s common stock so disposed and return such
shares to the Company, along with any Shares not so disposed, for
cancellation.
(d) Reimbursement
of Expenses.
The
Company will reimburse the Consultant in accordance with its normal
reimbursement policy for reasonable travel and other expenses incurred at the
Company’s request in carrying out the Consultant’s duties under this Agreement.
Reimbursement for approved expenses will be made within ten (10) days of receipt
from the Consultant of an itemized expense report.
7. Representations
and Warranties of Consultant.
The
Consultant represents and warrants to the Company as follows:
(a) Consultant
has not been engaged to perform, nor will Consultant perform, any services
in
connection with capital raising transactions for the Company or services that
will promote the market for the Company’s common stock. It is mutually
understood and agreed that any fees for the Services provided by Consultant,
which result in some benefit for the Company in connection with a capital
raising transaction or that promote the market for the Company’s common stock,
shall be negotiated separately from this Agreement.
(b) Consultant
will provide the Services to the Company, and such Services will be bona fide
services to the Company.
(c) Consultant
will not act as a conduit for distributing the Shares to the general
public.
(d) Neither
the Company nor any affiliate (as defined in the Securities Act of 1933, as
amended) has directed, instructed, or caused Consultant to resell the Shares
in
the public market, and Consultant will refuse any such direction or
request.
(e) The
Company will not directly or indirectly receive a percentage of the proceeds
from the resale of the Shares.
8. Inventions.
(a) “Inventions,”
as used in this Section 8, means any inventions, discoveries, improvements
and
ideas (whether or not they are in writing or reduced to practice) or works
of
authorship (whether or not they can be patented or copyrighted) that the
Consultant makes, authors, or conceives (either alone or with others) with
respect to the Company’s business only. The Consultant agrees that all
Inventions made by the Consultant during or within six months after the term
of
this Agreement will be the Company’s sole and exclusive property. The Consultant
will assign (and the Consultant hereby assigns) to the Company all of the
Consultant’s rights to the Invention, any applications the Consultant makes for
patents or copyrights in any country, and any patents or copyrights granted
to
the Consultant in any country.
(b) To
the
extent that any Invention qualifies as “work made for hire” as defined in 17
U.S.C. § 101 (1976), as amended, such Invention shall constitute “work made
for hire” and, as such, shall be the exclusive property of the
Company.
9. Confidential Information.
“Confidential Information,” as used in this Section 9, means information
that is not generally known and that is proprietary to the Company or that
the
Company is obligated to treat as proprietary. Any information that the
Consultant reasonably considers Confidential Information, or that the Company
treats as Confidential Information, will be presumed to be Confidential
Information (whether the Consultant or others originated it and regardless
of
how the Consultant obtained it). Except as specifically authorized by an
authorized officer of the Company or by written Company policies, the Consultant
will not, either during or after the term of this Agreement, use or disclose
Confidential Information to any person who is not an employee of the Company,
except as is necessary to perform his or her duties under this Agreement. Upon
termination of this Agreement, the Consultant will promptly deliver to the
Company all records and any compositions, articles, devices, apparatus and
other
items that disclose, describe or embody Confidential Information or any
Invention.
10. No
Adequate Remedy.
The
Consultant understands that if the Consultant fails to fulfill the Consultant’s
obligations under Sections 8 or 9 of this Agreement, the damages to the Company
would be very difficult to determine. Therefore, in addition to any other rights
or remedies available to the Company at law, in equity, or by statute, the
Consultant hereby consents to the specific enforcement of Sections 8 or 9 of
this Agreement by the Company through an injunction or restraining order issued
by an appropriate court.
11. Consent
to Use of Name.
The
Consultant consents to the use of the Consultant’s name, without prior written
approval, in appropriate Company materials such as, but not limited to, offering
memoranda related to financing activities of the Company.
12. Miscellaneous.
(a) No
Conflicts.
The
parties agree and understand that the Consultant has other clients that are
energy sector companies. The Consultant represents and warrants to the Company
that, to the Consultant’s knowledge, neither the entering into of this Agreement
nor the performance of any of the Consultant’s obligations hereunder will
conflict with or constitute a breach under any obligation of the Consultant
under any agreement or contract to which the Consultant is a party or any other
obligation by which the Consultant is bound. Without limiting the foregoing,
the
Consultant agrees that at no time will the Consultant utilize any trade secrets
or other intellectual property of any third party while performing services
hereunder.
(b) Nature
of Relationship.
The
Consultant is an independent contractor and will not be deemed to be an employee
of the Company for the purposes of any employee benefit programs, income tax
withholding, FICA taxes, unemployment benefits, or otherwise. Accordingly,
the
Consultant understands that the Company will not pay or withhold from payments
to the Consultant under this Agreement any FICA (social security), state
unemployment or disability insurance premiums, state or federal income taxes,
or
other taxes and that Consultant is responsible for paying its own federal
self-employment tax (in lieu of FICA), state and federal income taxes (including
estimated tax payments) and other applicable taxes. Consultant also understands
that he or she will receive no employee benefits of any kind including, for
example, health insurance.
(c) Successors
and Assigns.
This
Agreement is binding on and inures to the benefit of the Company’s successors
and assigns, all of which are included in the term the “Company” as it is used
in this Agreement.
(d) Modification.
This
Agreement may be modified or amended only by a writing signed by both the
Company and the Consultant.
(e) Governing
Law.
This
Agreement will be governed by the laws of the State of New York in all respects,
including without limitation interpretation, performance, effect and remedies
(without regard to the laws of conflict of any jurisdiction).
(f) Construction.
Wherever possible, each provision of this Agreement will be interpreted so
that
it is valid under the applicable law. If any provision of this Agreement is
to
any extent invalid under the applicable law, such provision will still be
effective to the extent it remains valid. The remainder of this Agreement also
will continue to be valid, and the entire Agreement will continue to be valid
in
other jurisdictions.
(g) Waivers.
No
failure or delay by either the Company or the Consultant in exercising any
right
or remedy under this Agreement will waive any provision of the
Agreement.
(h) Entire
Agreement.
This
Agreement supersedes all previous and contemporaneous oral negotiations,
commitments, writings and understandings between the parties concerning the
matters in this Agreement, including without limitation any policy or personnel
manuals of the Company.
(i) Notices.
All
notices and other communications required or permitted under this Agreement
shall be in writing and shall be hand-delivered or sent by registered or
certified first-class mail, postage prepaid, or commercial overnight delivery
service and shall be effective upon delivery if hand-delivered, three (3) days
after mailing if mailed or one (1) day after delivery to a commercial overnight
delivery service.
The
Company and the Consultant have duly executed this Agreement as of the date
first above written.
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DIET
COFFEE, INC.
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| By: | ||
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Name:
Xxxx Xxxxx
Title:
Director
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XXXXX
XXXXXXXXX
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| By: | ||
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Name: Xxxxx Xxxxxxxxx |
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(Signature
Page to Consulting Agreement)
EXHIBIT
A
FORM
OF STATEMENT OF SERVICES
CONSULTANT
NAME
STREET
CITY,
STATE ZIP
Diet
Coffee, Inc.
00
Xxxx
00xx
Xxxxxx,
00xx
Xxxxx
Xxx
Xxxx,
XX 00000
Re: Consulting
Services
| Date |
Services
Provided
|
Hours Spent | ||
