Exhibit 10.3
CONSULTING AGREEMENT
This CONSULTING AGREEMENT ("Agreement") dated as of May 12, 2004,
by and between VidRev Technologies Inc., incorporated under the laws of the
state of Florida, with its principal offices at 0000 Xxxxxxx Xxxx Xxxx, #000,
Xxx Xxxxxxx, Xxxxxxxxxx 00000 (the "Company") and Xxxxxx X. Xxxxxxx, an
individual and independent contractor, with his primary residence at 0 Xxxxx
Xxxx, Xxxxxxxxxx, Xxx Xxxx 00000 (the "Consultant").
WHEREAS, the Company is in the business of licensing and operating
products used for video telephony, video conferencing, Internet broadcasting
and compression and transmission of electronic files, in connection with the
World Wide Web, and has the exclusive United States license for the
distribution of the product known as the VidPhone.
WHEREAS, the Consultant is an individual with extensive experience
as a political and business advisor and can provide business advice, xxxxxx
business relationships and support marketing efforts through business contacts
for the Company.
WHEREAS, the parties desire to enter into a consulting agreement
on the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the mutual promises and
benefits set forth herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound hereby, agree as follows:
1. Services. Upon the terms and subject to the conditions of
this Agreement, the Consultant agrees to provide consulting services to the
Company relating to the promotion of the Company, the marketing of the
company's products, the initial launch and marketing campaign of the VidPhone
and other services, as may be requested by the Company. Consultant will also
serve as a member of the Company's Board of Directors.
2. Term. This Agreement shall commence as of May 12, 2004 and
shall continue in effect until May 11, 2006, unless otherwise terminated
pursuant to this Agreement (the "Term"). The Term shall automatically renew
for successive one-year periods. Either party may terminate this Agreement
for any reason and at any time by providing the other party with thirty (30)
days prior written notice, however both parties' obligations will continue to
the end of such notice period. In the event this Agreement is terminated by
either party, the Company shall pay the Consultant the Compensation accrued
through the date of his termination.
3. Duties; Extent of Services.
(a) Duties. During the Term of this Agreement, the
Consultant's services shall include, but are not limited to assisting with:
(i) directing and supervising the public relations aspects of the initial
public launch of the VidPhone product and any other subsequent product
offerings; (ii) managing general public relations and press relations; (iii)
identifying and securing potential Clients (as defined herein); (iv) engaging
in direct marketing of the Company's services; (v) assisting in negotiating
and implementing License Agreements with Clients; and (vi) recruiting
potential officers, executives and staff of the Company
(b) Board Appointment. Upon execution of this Agreement,
it is anticipated that the Consultant will serve on the Board of Directors of
the Company for an initial two-year term. Upon receipt of written notice, the
Consultant shall attend approximately four (4) Board meetings per calendar
year. In consideration for the Consultant's attendance at the Company's Board
meetings, the Company agrees to pay the Consultant Two Thousand, Five Hundred
Dollars ($2,500.00) per meeting attended by the Consultant as well as
reasonable travel expenses. The Company will also issue five hundred (500)
shares of stock in the Company ("VidRev Stock") to the Consultant for each
meeting attended.
(c) The Consultant acknowledges that he has been informed
that the Company currently has Directors and Officers Insurance ("D&O
Insurance"). The Consultant has been advised to take whatever additional
steps he deems necessary to adequately protect his interests.
(d) Extent of Services. The Consultant acknowledges that
he is expected to arrange for, and attend, introduction meetings for the
Company with key business and/or political contacts which might reasonably
lead to the expanded marketing of the Company's product(s) during each year of
the Term; assist in necessary follow-up activities; and assist with
negotiating transactions between the Company and Clients.
(i) Consultant and the Company agree that Consultant
will at all times be engaged as an independent contractor. In performing
services under this Agreement, Consultant shall not act as an employee of the
Company for any purpose whatsoever. Notwithstanding what would otherwise be
permitted within Consultant's capacity as a member of the Board of Directors,
Consultant shall have no power or authority to incur or create any obligations
or liability of any kind for or on behalf of the Company except as the Company
shall expressly authorize in writing in each instance and Consultant shall not
at any time enter into any contract with any person, firm or company that
shall purport to bind the Company in any manner whatsoever without specific
written authority obtained from the Company in advance, and any such contract
entered into by Consultant without such written authority shall not be binding
upon the Company.
(ii) Consultant affirms that he operates an
independent business and is responsible for payment of all tax and related
obligations arising under any state, federal or local statute.
(iii) While this Agreement is in effect and
thereafter, Consultant is free to perform services for persons or entities
other than the Company and/or Clients (as herein defined), provided that such
service does not conflict with this Agreement.
(iv) It is agreed that Consultant may not render
services to any existing or potential competitors of the Company in the United
States for the duration of this Agreement and for three (3) months thereafter
without the Company's prior written consent.
(v) Consultant shall utilize his own independent
judgment and discretion in the performance of his consulting services without
supervision or right to supervise or control as to the means and manner,
including location and sequencing of performance, by the Company.
(vi) Consultant shall provide his own tools,
equipment or other materials as needed.
(vii) Consultant may perform his services from any
location. If Consultant seeks to utilize facilities provided by the Company,
he must obtain the Company's prior consent in each instance.
(viii) Consultant shall be reimbursed for
reasonable travel or other costs or expenses incurred, with the prior approval
of the Company, in connection with this Agreement.
(ix) Consultant may take reasonable time off without
the Company's prior approval.
(x) Consultant is not required to identify himself
as a representative of the Company.
4. Compensation. In consideration of the services rendered by
the Consultant hereunder, the Company shall compensate the Consultant with
50,000 restricted common shares in the Company. Such compensation shall be
paid as follows:
(a) 10,000 shares upon execution of this Agreement;
(b) 10,000 shares on November 1, 2004, May 1, 2005,
November 1, 2005 and May 1, 2006 (each a "Payment Date");
(c) Payment of the shares under subsection (b) shall be
contingent upon this Agreement being in effect as of the Payment Date and
Consultant exercising reasonable efforts to fulfill his duties under this
agreement in the judgment of the Company's officers.
(d) The Consultant acknowledges that in the event the
market price of the restricted common shares in the Company maintains a value
of Twenty-Five Dollars ($25.00) or greater for a period of thirty (30)
calendar days, pursuant to the above-referenced compensation chart, the
Company expressly reserves the right to adjust the Consultant's Compensation
to reflect the value of the restricted common shares in the Company at a price
no less than Six Dollars ($6.00) per share.
(e) The Company will not deduct or withhold any federal,
state or local income taxes from the payments made to Consultant. Company
shall issue to Consultant a Form 1099 in connection with the payments.
Consultant shall be solely responsible for the payment of any taxes due on
fees paid to him by the Company.
(f) Compensation under Section 3(b) shall not be subject
to any of the terms of Section 4(c) relating to compensation for consulting
services.
5. Benefits. The Consultant acknowledges that as a result of
his independent contractor status he shall not be eligible to participate in
any Company-sponsored benefit plans provided to the Company's employees
including but not limited to group health insurance, medical and
hospitalization coverage or stock option plan.
6. Confidentiality.
(a) Importance of Confidential Information. In the course
of performing his responsibilities under this Agreement, the Consultant may be
exposed to or acquire information regarding the business, projects,
operations, finances, activities, research, development, products, technology,
technology architecture, business models, plans or processes, marketing plans,
customers, finances, personnel data, procurement processes or strategies or
suppliers of the Company, its Clients, or their respective directors,
officers, employees, agents or customers, including, without limitation, any
idea, proposal, plan, procedure, technique, formula, technology, or method of
operation (collectively, "Confidential Information"). Without limiting the
foregoing, Confidential Information shall also include all written or oral
information relating to the Company and/or its Clients, or their respective
directors, officers, employees, agents or customers, that given its nature or
the context of disclosure should reasonably be understood to be confidential.
The Consultant agrees to hold Confidential Information in strict confidence,
to use such information for no purpose other than as necessary for the
performance of his obligations hereunder, and to make no disclosure of such
information except in accordance with the terms of this Agreement and in
relation to his duties hereunder. The Consultant hereby acknowledges that the
use by the Consultant for his own account or the disclosure by the Consultant
to any existing or potential competitors of the Company of any Confidential
Information could place the Company at a serious competitive disadvantage, and
could do serious and irreparable damage, financial or otherwise, to the
business of the Company.
(b) No Right to Disclose Confidential Information. By
reason of Section 6(a) above, the Consultant hereby covenants and agrees that
he shall not, at any time, directly or indirectly, reveal, divulge or make
known to any Person (as herein defined) (other than the Company) or use for
his own account, or for the account of any Person (other than the Company),
any Confidential Information of which he becomes aware during the Term.
(c) Exclusion from Definition of Confidential Information.
The term "Confidential Information" shall not include (i) the Consultant's
general expertise, knowledge and experience in any business including any
business in which the Company is engaged; and (ii) any information which (A)
has become available to the general public without fault on the part of the
Consultant; (B) has been received by the Consultant at any time from a source
other than the Company, its agents, representatives or employees, lawfully
having possession of such information without an obligation of
confidentiality; or (C) has been in the public domain or been part of a
printed publication available to the public.
(d) Return of Confidential Materials. Upon the
termination of this Agreement, Consultant promises and agrees to return to the
Company all records, documents, files, papers and other materials or property
belonging to the Company and/or its Clients.
7. Indemnification. Consultant hereby agrees to indemnify,
defend and hold harmless the Company and its members, employees and their
respective successors, assigns and affiliates from and against any and all
damages caused by, resulting from or arising out of the negligence or willful
misconduct of Consultant in connection with the services provided by
Consultant to the Company or its Clients under this Agreement.
8. Definitions. For purposes of this Agreement, the following
terms shall have the following meanings:
(a) "Client" or "Clients" means, in relation to the
Company, (i) any customer, vendor or licensee of the Company during the Term;
or (ii) any potential customer, vendor or licensee of the Company who has been
targeted as a potential Client or with whom the Company is involved in
discussions relating to a current or future transaction related to their
businesses during the Term.
(b) "License Agreement" means an agreement granting a
Client the right to market and distribute VidRev Technologies, Inc. products
and software in accordance with the terms and conditions set forth by the
Company.
(c) "Person" means any individual, partnership,
corporation, limited liability company, association, business trust, joint
venture, governmental entity, business entity or other entity of any kind or
nature.
9. Assignment. This Agreement shall be binding upon and shall
inure to the benefit of the Company and its successors and assigns, and any
successor to the Company (whether by purchase, lease, merger, consolidation,
liquidation or otherwise) or a purchaser of all or substantially all of the
Company's business and/or assets if it shall assume the obligations under this
Agreement and agree expressly to perform the obligations of the Company under
this Agreement. Neither this Agreement nor any right or interest hereunder
may be assigned by the Consultant, his beneficiaries, or legal representatives
without the prior written consent of the Company; provided, however, that
nothing in this Section 10 shall preclude (i) the Consultant from designating
a beneficiary to receive any benefit payable hereunder upon his death, or (ii)
the executors, administrators, or other legal representatives of the
Consultant or his estate from assigning any rights hereunder to distributees,
legatees, beneficiaries, testamentary trustees or other legal heirs of the
Consultant. Nothing contained herein shall prohibit the Company from assigning
its rights and obligations hereunder to any affiliate, subsidiary or related
entity of the Company.
10. Arbitration. In the event of any dispute arising out of or
relating to this Agreement, the matter shall be resolved by arbitration
pursuant to the then current Rules of the American Arbitration Association
("AAA"). Arbitration shall be initiated by one party's making a written
demand on the other party and simultaneously filing copies of the demand,
together with the required fees, with the regional office of the AAA. Within
fifteen (15) days after their appointment, each party shall designate one
party arbitrator. These two arbitrators shall, within fifteen (15) days of
meeting with the AAA, select a third arbitrator. In the event that the first
two arbitrators are unable to agree upon the third arbitrator, then the
arbitrators shall apply to the AAA to designate and appoint a person as the
third arbitrator. In the event the party upon whom the original arbitration
demand was served shall fail to designate its arbitrator within the fifteen
(15) day period, the arbitrator designated by the party requesting arbitration
shall act as the sole arbitrator and shall be deemed to be the single,
mutually approved arbitrator to resolve the matter. The arbitration shall be
conducted in New York City, New York under the auspices of the AAA. The AAA's
National Rules for the Resolution of Employment Disputes shall govern all
proceedings unless otherwise provided herein. In case of conflict between the
AAA's National Rules for the Resolution of Employment Disputes and this
Agreement, the provisions of this Agreement shall govern. The parties
expressly covenant and agree to be bound by the decision of the arbitration
panel and accept any such decision as the final determination of the matter in
dispute. A judgment of any court related to this arbitration may be entered
upon any award made pursuant to this Section 10. The foregoing shall not
apply to injunctive actions arising from Consultant's breach of the provisions
contained in Section 6 of this Agreement.
11. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been given when delivered by
hand, mailed by first-class registered or certified mail, postage prepaid and
return receipt requested, or delivered by overnight courier addressed as set
forth in the preamble hereto or at such other address as may from time to time
be specified to the other party in a notice similarly given.
12. Waiver. The failure of any party at any time to require
performance of another party of any provision hereof or to resort to his
remedy at law or in equity or otherwise, shall in no way affect the right of
such party to require such full performance or to resort to such remedy at any
time thereafter, nor shall the waiver by any party of a breach of any
provision hereof be taken or held to be a waiver of any subsequent breach of
such provision unless expressly so stated in writing. No waiver of any of the
provisions hereof shall be effective unless in writing and signed by the party
to be charged with such waiver.
13. Representations and Warranties. In accepting the terms of
this Agreement, the Consultant hereby represents that he has not taken, and
will not take in connection with his duties and services for the Company, any
action that he reasonably believes would violate any contractual or other
restriction or obligation that is binding on him or any continuing duty he may
owe to others, including but not limited to a prior employer. The Consultant
hereby acknowledges that the Company has specifically and definitively
instructed the Consultant that all such continuing duties to others, including
but not limited to, the Consultant's prior employer(s), must be respected and
adhered to.
14. Entire Agreement. This Agreement is the entire agreement
among the parties hereto and, when executed and delivered by both of such
parties (at which time this Agreement shall be effective), supersedes all
prior agreements and communications, either oral or in writing, among such
parties with respect to the subject matter contained herein.
15. Severability. If any of the provisions, terms or conditions
of this Agreement are held to be invalid or unenforceable, then the remaining
provisions, terms and conditions which can be effected without such invalid or
unenforceable part of the Agreement shall nonetheless remain in full force and
effect.
16. Governing Law. This Agreement and all the terms hereof
shall be construed, performed and enforced in accordance with the laws of the
State of Florida.
17. Headings. The headings in this Agreement are for the
convenience of the parties and do not affect, in any manner whatsoever, the
interpretation or meaning of any of the terms or provisions of this Agreement.
18. Rule of Construction Waived. The rule of construction that
provides that agreements shall be construed against the drafter shall not be
applied or considered in any action or proceeding to enforce any provision of
this Agreement.
19. Counterparts. This Agreement may be executed in multiple
counterparts and each such counterpart shall be considered as an original.
One counterpart shall be delivered to each of the parties hereto.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Agreement as of the date first written above.
VidRev Technologies, Inc.
By:/s/ Xxxxx Xxxxx
----------------------
Name: Xxxxx Xxxxx
Title: Vice President
/s/ Xxxxxx X. Xxxxxxx
---------------------
Xxxxxx X. Xxxxxxx
