Exhibit 4.12
CONSULTING AGREEMENT
THIS AGREEMENT made as of the 1st day of January, 2002.
B E T W E E N:
J. XXXXX XXXXXXX EXECUTIVE SERVICES LTD.
a corporation incorporated under the laws of Canada
(hereinafter referred to as the "Consultant")
AND:
X-XXXXXXX.XXX INC.,
a corporation incorporated under the laws of Canada
(hereinafter referred to as the "Corporation")
WHEREAS the Consultant has experience and expertise in the business
carried on by the Corporation.
AND WHEREAS the Corporation desires to retain the services of the
Consultant on a long-term basis in accordance with the terms and conditions set
forth herein.
NOW THEREFORE in consideration of the premises and the mutual
covenants herein and other good and valuable consideration (the receipt and
sufficiency of which is hereby acknowledged by each of the parties) the parties
hereto covenant and agree as follows:
ARTICLE ONE - GENERAL
1.01 CONSULTANT SERVICES
Subject to the terms and conditions hereof, the Corporation shall
retain the Consultant to provide management and consulting services, and the
Consultant shall provide such services to the Corporation, regarding:
(1) corporate strategic direction;
(2) mergers and acquisitions;
(3) strategic product review; and such other consultative services as
may from time to time be agreed upon between the parties.
ARTICLE TWO- TERM OF AGREEMENT
2.01 The term of this Agreement shall commence on the 1st day of January,
2002 and shall continue and shall not be terminated by either party for any
reason or cause whatsoever, except pursuant to paragraph 7 herein, until the
31st day of December, 2003 (the "Term").
ARTICLE THREE - REMUNERATION OF CONSULTANT
3.01 FEE FOR SERVICES
The Corporation shall pay to the Consultant for the services provided
under this Agreement a fee equal to $250,000.00 plus GST U.S. (the "Fee").
3.02 PAYMENT OF FEES
3.02.01 The Fee shall be payable by the Corporation to the Consultant
in 24 equal monthly payments of $10,416.67 plus GST.
3.02.02 The Consultant authorizes the Corporation to deduct from any
payment, any amounts properly owed to the Corporation by the
Consultant by reason of advances, loans or in recommence for damages
to or loss of the Corporation's property and equipment, save only
that this provision shall be applied so as not to conflict with any
applicable legislation.
3.02.3 Bonuses. In addition to the Fee the Consultant shall be
entitled to receive, at the discretion of the Corporation's board of
directors (the "Board"), a performance bonus, which amount shall be
determined and recommended by the Corporation's audit committee.
3.02.4 Stock Options. In addition to the Fee the Consultant may, in
the absolute discretion of the Corporation, participate in the
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Corporation's stock option plan that is in place from time to time,
and receive additional stock options as determined by the Board.
3.02 GENERAL EXPENSES
The Corporation shall reimburse the Consultant for all expenses
properly incurred in connection with the services to be provided under the terms
of this Agreement. Without limiting the generality of the above, it is
understood and agreed that the Consultant shall be entitled to be reimbursed for
all expenses for entertainment, public relations, travel, (on all flights at the
cost of a business class ticket), and similar items.
3.03 BENEFIT PLANS AND INSURANCE
At the cost of the Consultant, Xxxxx Xxxxxxx shall be entitled to
participate in all health benefit plans and insurance plans which the
Corporation provides to its chief executive officer.
3.04 INVOICES
The Consultant shall provide the Corporation with monthly invoices
which itemize the services provided under this Agreement and the expenses for
which reimbursement is requested, and GST. Payment shall be made to the
Consultant within five (5) days from receipt by the Corporation of an invoice.
ARTICLE FOUR - COVENANTS OF CONSULTANT
4.01 SERVICES
The Consultant shall render performance of the services hereunder to
the best of the Consultant's ability and in a prompt, diligent, competent and
professional manner.
4.02 TIME OF SERVICES
The Consultant will be expected to devote ten (10) days per month to
providing services to the Corporation under this Agreement. The time of such
service by the Consultant shall be as agreed to from time to time by the
Corporation and the Consultant. Subject to the obligations of the Consultant
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under this Agreement, the Consultant shall be free to offer services to any
other person or organization, except where there may be a conflict of interest
with the Corporation or where there would be a resulting violation of Section
4.06 hereof.
4.03 LICENCES AND PERMITS
The Consultant shall be responsible for obtaining all necessary
licences and permits and for complying with all applicable federal, provincial
and municipal laws, codes and regulations in connection with the provision of
the services hereunder. The Consultant shall provide the Corporation with
adequate evidence of his compliance with this Section 4.03 when requested by the
Corporation.
4.04 RULES AND REGULATIONS
The Consultant shall comply, while on the premises used by the
Corporation or while providing services to the Corporation under this Agreement,
with all the rules and regulations of the Corporation from time to time in force
which are brought to his notice or of which he could reasonably be aware.
4.05 CONFIDENTIALITY
The parties acknowledge that in carrying out his duties under this
Agreement, the Consultant will have access to and become entrusted with
confidential information regarding the business plans and operations of the
Corporation, computer systems and technology, unique methodology and other
proprietary information. The Consultant acknowledges that the right to maintain
such detailed confidential information constitutes a proprietary right, which
the Corporation is entitled to protect. Accordingly, the Consultant shall not,
during the Term of this Agreement, or at any time thereafter, disclose any of
such detailed confidential information, trade secrets or other private affairs
of the Corporation to any person or persons, firm, association or corporation,
nor shall the Consultant use the same for any purpose other than on behalf of
the Corporation.
4.06 NON-COMPETITION
(1) The Consultant shall not, without prior written consent of the
Corporation for the period of this Agreement or for a period of one (1) year
following the termination of this Agreement or any renewal hereof, for any
reason be it for cause or not, either alone or in conjunction with any
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individual, firm, corporation, association or any entity, except for the
Corporation, whether as principal, agent, shareholder, employee or in any other
capacity whatsoever, perform the duties of or provide the services as are
described in paragraph 1.01 hereof in a business which competes with the
Corporation, within any geographical location where the Corporation has carried
on business or expended time and personnel and financial resources or been
involved in any capacity in any business. Furthermore, the Consultant also
agrees that upon the termination of this Agreement he will not attempt to hire
or encourage to leave their employ, any of the Corporation's other employees,
provided, however, that the Consultant shall not be precluded from competing
with the business of the Corporation in the event of a termination of
Consultant's employment as a result of a material breach by the Corporation of
the provisions of this Agreement.
(2) The Consultant confirms that all restrictions in Sections 4.06(1)
are reasonable and valid and all defences to the strict enforcement thereof by
the Corporation are waived by the Consultant.
4.07 INVENTIONS AND PATENTS
(1) The Consultant shall promptly communicate and disclose to the
Corporation all inventions, improvements, modifications, discoveries, designs,
formulae, methods and processes made, discovered or conceived by the Consultant
either alone or jointly with others, during the period of this Agreement,
providing the same relate to or are capable of being used by the corporation or
any affiliate thereof in the normal course of their businesses.
(2) The Consultant acknowledges and declares that all inventions,
improvements, modifications, discoveries, designs, formulae, methods, processes,
as are described in paragraph 4.07(1) hereof, and all patents and patent
applications relating thereto are the property of the Corporation and hereby
assigns to the Corporation all of the right, title and interest of the
Consultant in any such inventions, improvements, modifications, discoveries,
designs, formulae, methods and processes, and in any patents or patent
applications relating thereto. The Consultant shall execute all instruments and
documents and do all such further acts and things as may be necessary or
desirable, in the Corporation's opinion to carry out the provisions of this
paragraph.
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ARTICLE FIVE - INDEMNITY
5.01 The Consultant shall be fully indemnified by the Corporation for any
losses, damages, cost of legal actions and other liabilities suffered in the
course of providing services hereunder.
ARTICLE SIX - INDEPENDENT CONTRACTOR
6.01 CONSULTANT NOT AN EMPLOYEE
The Consultant will at all times act in his own capacity and right as
an independent contractor in the performance of this Agreement. The Consultant
is not an employee of the Corporation and shall not be entitled to receive from
the Corporation any benefits whatsoever. The Corporation shall not be required
to make contributions and/or remittances whatsoever for workers' compensation,
Canada Pension Plan, employer health tax, employment insurance, income tax and
other similar levies in respect of the fee for services to be paid to the
Consultant pursuant to this Agreement.
The Consultant shall pay for and maintain his own benefits including
workers' compensation, Canada Pension Plan, employer health tax, employment
insurance and other similar levies, and make appropriate remittances for income
tax on his own behalf, in conformity with any applicable statutory requirements
in respect of the fee for serve to be paid to the Consultant pursuant to this
Agreement.
6.02 CONSULTANT SHALL NOT CONTRACT ON BEHALF OF CORPORATION
The Consultant shall not, and shall not have the authority to,
without the prior written consent of the Corporation, enter into any contract or
commitment in the name of, or on behalf of, the Corporation or bind the
Corporation in any respect whatsoever, or represent himself as a partner, joint
venturer, agent or employee of the Corporation.
ARTICLE SEVEN- TERMINATION
7.01 The parties understand and agree that this Agreement may be
terminated for the following reasons: (a) if the Corporation receives financing
in the amount of $5,000,000.00 or a greater amount, or (b) if any person,
association, partnership or corporation acquires or becomes the beneficial owner
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of, either directly or indirectly, more than 20% of the voting shares of the
Corporation.
7.02 Upon termination for any reason whatsoever, the Corporation shall
pay, any and all outstanding amounts owed to the Consultant pursuant to this
Agreement.
7.03 Upon compliance with this paragraph 7 herein, the Corporation shall
have no further obligations to the Consultant under this Agreement or otherwise
and the Consultant agrees that notwithstanding any other provision contained
herein, the Consultant shall not have any right to commence any action in
connection with his termination.
7.04 RETURN OF PROPERTY
Upon the expiration of this Agreement and/or the Consultant's
services under this Agreement, the Consultant shall immediately deliver or cause
to be delivered to the Corporation all records, files, manuals, books,
documents, materials, supplies, computer programs, money and other property and
materials belonging to the Corporation, or for which the Corporation is liable
to others, including all copies thereof, remaining in the possession, charge,
control or custody of the Consultant.
7.05 PROVISIONS WHICH OPERATE FOLLOWING TERMINATION OR EXPIRATION
Notwithstanding any termination or expiration of this Agreement
and/or any termination or expiration of the Consultant's services under this
Agreement, the provisions of Sections 4.05, 4.06, 4.07, 5 and 7 and any other
provisions of this Agreement necessary to give efficacy thereto shall continue
in full force and effect following any such termination or expiration.
ARTICLE EIGHT - INTERPRETATION AND ENFORCEMENT
8.01 SECTIONS AND HEADINGS
The division of this Agreement into Articles and Sections and the
insertion of headings are for the convenience of reference only and shall not
affect the construction or interpretation of this Agreement. The terms of "this
Agreement", "hereof", "hereunder" and similar expressions refer to this
Agreement and not to any particular Article, Section or other portion hereof and
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include any agreement or instrument supplemental or ancillary hereto. Unless
something in the subject matter or context is inconsistent therewith, references
herein to Articles and Sections are to Articles and Sections of this Agreement.
8.02 NUMBER
In this Agreement words importing the singular number only shall
include the plural and vice versa and words importing the masculine gender shall
include the feminine and neuter genders and vice versa and words importing
persons shall include individuals, partnerships, associations, trusts,
unincorporated organizations and corporations and vice versa.
8.03 BENEFIT OF AGREEMENT
This Agreement shall enure to the benefit of and be binding upon the
heirs, executors, administrators and legal personal representatives of the
Consultant and the successors and assigns of the Corporation respectively.
8.04 ENTIRE AGREEMENT
This Agreement, along with the Purchase Agreement made as of the 3rd
day of April, 2001 constitutes the entire agreement between the parties with
respect to the subject matter hereof and cancels and supersedes any prior
understandings and agreements between the parties hereto with respect thereto.
There are no representations, warranties, forms, conditions, undertakings or
collateral agreements, express, implied or statutory, between the parties other
than as expressly set forth in this Agreement or the Purchase Agreement.
8.05 AMENDMENTS AND WAIVERS
No amendment to this Agreement shall be valid or binding unless set
forth in writing and duly executed by both of the parties hereto. No waiver of
any breach of any term or provision of this Agreement shall be effective or
binding unless made in writing and signed by the party purporting to give the
same and, unless otherwise provided in the written waiver, shall be limited to
the specific breach waived.
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8.06 ASSIGNMENT
Except as may be expressly provided in this Agreement, neither party
hereto may assign his or its rights or obligations under this Agreement without
the prior written consent of the other party hereto.
8.07 SEVERABILITY
If any provision of this Agreement is determined to be invalid or
unenforceable in whole or in part, such invalidity or unenforceability shall
attach only to such provision or part thereof and the remaining part of such
provision and all other provisions hereof shall continue in full force and
effect.
8.08 NOTICES
Any demand, notice or other communication (hereinafter in this
Section 6.08 referred to as a "Communication") to be made or given in connection
with this Agreement shall be made or given in writing and may be made or given
by personal delivery or by registered mail addressed to the recipient as
follows:
To the Consultant: J. XXXXX XXXXXXX EXECUTIVE SERVICES LTD.
00 XXXXXXXXXX XXXXX.
XXXXXX, XXX0X 0X0
Attention: Xxxxx Xxxxxxx
To the Corporation: X-XXXXXXX.XXX INC.
000 XXXXX XXXX, XXXXX 000
XXXXXX, XX X0X 0X0
Attention: Xxxxxxx Xxxxxxxxx
or such other address or individual as may be designated by notice by either
party to the other. Any Communication made or given by personal delivery shall
be conclusively deemed to have been given on the day of actual delivery thereof
and, if made or given by registered mail, on the 3rd day, other than a Saturday,
Sunday or statutory holiday in Ontario, following the deposit thereof in the
mail. If the party giving any Communication knows or ought reasonably to know of
any difficulties with the postal system which might affect the delivery of the
mail, any such Communication shall not be mailed but shall be made or given by
personal delivery.
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8.09 GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
the laws of the Province of Ontario and the laws of Canada applicable therein.
8.10 ATTORNMENT
For the purpose of all legal proceedings this Agreement shall be
deemed to have been performed in the Province of Ontario and the courts of the
Province of Ontario shall have jurisdiction to entertain any action arising
under this Agreement. The Corporation and the Consultant each hereby attorns to
the jurisdiction of the courts of the Province of Ontario provided that nothing
herein contained shall prevent the Corporation from proceeding at its election
against the Consultant in the courts of any other province or country.
8.11 ARBITRATION AND MEDIATION
(1) Should any dispute or disagreement of any kind arise at any time;
(i) the rights and liabilities of the Parties hereof or with respect to the
interpretation, validity, construction, meaning, performance, effect or
application of this Agreement, as amended from time to time; or (ii) between the
Corporation and the Consultant, the Parties agree that good faith negotiations
shall take place between the Corporation and the Consultant. If such good faith
negotiations have not resolved the dispute or disagreement within a reasonable
period of time, either Party may request a mediation between the Parties, or
either Party may refer the dispute or disagreement directly to arbitration
without going to mediation.
(2) The mediator shall be agreed upon by the both Parties. In the
event that the Parties are unable to agree upon the mediator, the dispute or
disagreement shall be referred to arbitration in accordance with this clause.
(3) All discussions before the mediator shall be non-binding,
confidential and without prejudice to the position of either Party. The Parties
agree that if the mediation process does not result in a satisfactory solution
of the dispute or disagreement after the lesser of either; (a) ten (10) hours of
mediation, or (b) thirty (30) days from the commencement of the mediation, then
either Party may refer the dispute or disagreement to arbitration pursuant to
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the provisions of the Arbitration Xxx, 0000, S.O. 1991, c. 17 (the "Arbitration
Act"), as amended and in accordance with the following:
(a) the reference to arbitration shall be to one (1) arbitrator. If
the Parties cannot agree on a choice of arbitrator within ten (10) days from the
expiry of the mediation process as herein provided, any Party may apply to the
Ontario Superior Court of Justice for the appointment of an arbitrator as
provided for in Section 10 of the Arbitration Act;
(b) if the arbitrator has allowed his/her/its time or extended time
from making any award, as provided in the Arbitration Act, to expire without
making any award, any Party to the arbitration may apply to the Ontario Superior
Court of Justice or to a Judge thereof to appoint any umpire who shall have the
like power to act in reference and to make an award as if he/she/it had been
duly appointed by all the Parties to the submission and by the consent of all
the Parties thereto;
(c) if any umpire is appointed pursuant to the foregoing subsection
11.3.2, such umpire shall make his award within three (3) months after the
original or extended time appointed for making the award of the arbitrator has
expired or on or before any later date to which the Parties to the reference by
any writing signed by them may from time to time agree to enlarge the time for
making the award, or if the Parties have not agreed, then within such time as
the Court or Judge who appointed such umpire may deem proper;
(d) any such arbitration or reference to an umpire shall be held in
the City of Ottawa. The arbitration shall be completely private. The arbitrator
shall fix the appropriate procedures which may include an oral hearing. The
issue or issues to be decided by the arbitrator shall be defined in an
arbitration agreement filed on consent by the aggrieved party. In the event the
Parties to the arbitration shall be unable to agree upon the issue or issues to
be decided by the arbitrator in any arbitration pursuant to this paragraph, the
arbitrator shall have jurisdiction to determine the issue or issues to be so
decided. The Consultant shall do all such acts and thing as are necessary to
enable the arbitrator to make a proper finding respecting the matters in issue.
The arbitrator may order interest on any award and the arbitrator may award
costs to either Party. In the absence of any award of costs, each of the Parties
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shall bear their own costs of any arbitration pursuant to this paragraph and
one-half of the cost of the arbitrator. The arbitrator shall be strictly bound
by legal principals and the general nature of this Agreement in rendering
his/her/its decision.
(e) The Parties agree that good faith negotiations, mediation and
arbitration shall all be without recourse to the Courts. The award of the
arbitrators shall be final and binding, except that either Party may appeal an
arbitration award to the Courts on a question of law. Judgement upon the award
rendered by the arbitrator may be entered in any Court having jurisdiction.
8.12 PRE-CONTRACTUAL REPRESENTATIONS
The Consultant hereby waives any right to assert a claim based on any
pre-contractual representations, negligent or otherwise, made by the Corporation
or any of its directors, officers, agents or employees.
8.13 TIME OF ESSENCE
Time shall be of the essence hereof.
8.14 CURRENCY
All dollar amounts referred to in this Agreement are in funds of the
United States of America.
8.15 RIGHT TO INJUNCTIVE RELIEF
As a violation by the Employee of the provisions of paragraphs 6 and
8 hereof could cause irreparable injury to the Employer and there is no adequate
remedy at law for such violation, the Employer shall have the right, in addition
to any other remedies available to it at law or in equity, to enjoin the
Employee in a court of equity from violating such provisions. The provisions of
paragraphs 6 and 8 hereof shall survive the termination of this Agreement.
8.16 COPY OF AGREEMENT
The Consultant hereby acknowledges receipt of a copy of this
Agreement duly signed by the Corporation.
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8.17 INDEPENDENT LEGAL ADVICE
The Consultant acknowledges that it has read and understands the
Agreement and acknowledges that it has had the opportunity to obtain independent
legal advice regarding the terms of the Agreement and their legal consequences.
IN WITNESS WHEREOF the parties have executed this Agreement.
SIGNED, SEALED AND DELIVERED
J. XXXXX XXXXXXX EXECUTIVE
SERVICES LTD.
Per: /s/ Xxxxx Xxxxxxx
-------------------------------
Xxxxx Xxxxxxx
X-XXXXXXX.XXX INC.
Per: /s/ Xxxxxxx Xxxxxxxxx
-------------------------------
Xxxxxxx Xxxxxxxxx, CEO
and President
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