EXHIBIT 10.12
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (the "Agreement"), dated as of August 1st, 2003,
is entered into between WARP TECHNOLOGY HOLDINGS, INC., a Nevada corporation
having its principle executive offices at 000 Xxxx 00 Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 (the "Corporation") and XX. XXXXX X. XXXXX, an individual having an
address at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Consultant").
W I T N E S E T H:
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WHEREAS, the Corporation desires to engage Consultant as a management
consultant to the Corporation and to be assured of his services as such on the
terms and conditions hereinafter set forth; and
WHEREAS, Consultant is willing to accept such engagement on the terms and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, and intending to be legally bound hereby, the Corporation
and Consultant hereby agree as follows:
1. Engagement.
(a) Subject to the terms and conditions set forth in this Agreement, the
Corporation offers and the Consultant hereby accepts engagement as a management
consultant to the Corporation effective as of August 1, 2003 (the "Engagement
Date").
(b) The Corporation hereby engages Consultant to act as an Executive
Director, Office of the Chairman for the Corporation and to act as an advisor to
the Board of Directors of the Corporation subject to the supervision and
direction of the Chairman of the Board and Chief Executive Officer ("CEO") of
the Corporation and the Board of Directors of the Corporation. Consultant shall
render services akin to those of a senior executive of the Corporation and be
responsible for advising the CEO of the Corporation on the operation of the
Corporation's business and recent initiatives, together with such other
responsibilities and duties consistent with his engagement and as may be
designated from time to time by the Chairman of the Board and CEO of the
Corporation or the Board of Directors of the Corporation, including
participation in the overall development of the Corporation's business
strategies. Consultant's duties shall be performed primarily in the New York,
New York area but shall be subject to travel outside of such area as may be
necessary for Consultant to perform his duties.
(c) Consultant shall faithfully and diligently discharge his duties
hereunder and use his best efforts to implement the policies established by the
Chairman of the Board and Chief Executive Officer and the Board of Directors of
the Corporation. Consultant agrees to devote substantially all of his time and
attention exclusively to the rendering of services hereunder.
2. Term.
The term of this Agreement shall commence on the Engagement Date stated in
Section 1(a) hereof and be on a month-to-month basis beginning on the first day
of each month and continuing until terminated pursuant to the provisions of
Section 3 below.
3. Termination.
(a) This Agreement may be terminated with or without cause by either party
upon thirty (30) days written notice to the other party. Such thirty (30) day
period shall begin to toll on the first day of the month following the giving of
such notice.
(b) Upon the termination of this Agreement pursuant to this Section 3, the
Consultant shall be entitled to the Base Compensation set forth in Section 4(a)
of this Agreement through the date of termination as set forth in Section 3(a).
4. Compensation.
(a) During the Term of Consultants engagement hereunder, the Corporation
shall cause Consultant to receive base compensation in the amount of Twenty
Thousand ($20,000.00) Dollars per month, which base compensation shall be paid
as follows: i) Ten Thousand ($10,000.00) Dollars per month in cash and ii) Ten
Thousand ($10,000.00) Dollars per month accruing and payable in shares of
restricted common stock of the Corporation at a per share conversion price equal
to the best terms received by any bona fide investor in the Corporation during
the period beginning at the Engagement Date and lasting until 180 days after the
termination of this agreement. Such base compensation, as from time to time
increased, is hereafter referred to as the "Base Compensation". Should the
Corporation implement a Corporation wide salary reduction program applicable to
its senior management, such salary reduction will apply to the cash component of
Consultant's Base Compensation, and such reduction will be proportionately added
to the restricted common stock component of the Base Compensation. The Base
Compensation shall be payable in accordance with the present payroll practices
of the Corporation. In addition, Consultant may receive such additional
compensation (in the form of bonuses, etc.) that the Corporation's Board of
Directors shall, in the exercise of its good faith and reasonable discretion,
determine.
(b) In addition to the compensation described in Section 2(a) above, on the
Engagement Date identified in Section 1(a) above Consultant shall be issued
1,000,000 restricted shares of the Corporation's common stock (the "Compensation
Stock") as a portion of his compensation for services rendered under this
agreement. Consultant's ownership interest in the Compensation Stock shall vest
in four monthly installments on the last day of the four successive months
beginning with September 2003. The Compensation Stock shall vest as follows: 10%
on September 30, 2003; 20% on October 31, 2003; 30% on November 30, 2003; and
the remaining 40% on December 31, 2003. Each months vesting is subject to the
successful execution of the WARP Business Plan for that month. In the event that
the Board of Directors of the Corporation (the "Board") determines, in its sole
discretion, that the WARP Business Plan has not been successfully executed for
any given month, the monthly installment of Compensation Stock shall not vest
for that month, and the monthly vesting schedule described above shall be pushed
back one month. The Board must give Consultant notice, via e-mail or otherwise,
of the Corporation's failure to execute the WARP Business Plan for such month
within five (5) days of the end of that month, otherwise that months vesting
installment shall vest in the Consultant immediately at the end of such fifth
day.
(c) To the extent it is able under the restrictions of the federal
securities laws, and subject to a determination by the Board that such would not
cause material harm to the Corporation, the Corporation agrees to provide
Consultant at no cost any necessary opinion letter needed by Consultant to meet
the resale requirements of Rule 144 under the federal securities laws as
applicable to the Compensation Stock and the restricted common stock portion of
the Base Compensation, or other restricted common stock of the Corporation owned
by Consultant, once the one-year holding period for such common stock has
expired.
5. Expenses.
Consultant shall be reimbursed for all reasonable travel, entertainment and
other expenses incurred by him during the term of this Agreement where such
expenses were incurred in furtherance of his duties to the Corporation under
this agreement. Notwithstanding the above, any expenditures in excess of $500.00
must be pre-approved by the CEO or board of directors of the Corporation to
qualify for reimbursement.
6. Indemnification.
The parties hereto each acknowledge and agree that they have entered into
an Indemnification Agreement of even date herewith and that such Indemnification
Agreement shall remain in full force and effect throughout the Term hereof and
shall survive the termination of this Agreement.
7. Intellectual Property Rights.
All rights in inventions, designs and intellectual property (including
without limitation patents, copyright, trade xxxx, registered designs, design
rights and know-how) to which Consultant may become entitled by reason of
activities in the course of his engagement shall vest automatically in the
Corporation and Consultant shall, at the request and expense of the Corporation,
provide the Corporation with all information, drawings and documents requested
by the Corporation and execute such documents and do such things as may be
required by the Corporation to evidence such vesting. The provisions of this
Section 7 shall survive the termination of this Agreement.
8. Non-Competition and Non-Disclosure.
The parties hereto each acknowledge and agree that they have entered into a
Non-compete, Non-disclosure Agreement and Assignment Agreement of even date
herewith ("Non-Disclosure and Non-Competition Agreement") and that such
Non-Disclosure and Non-Competition Agreement shall remain in full force and
effect throughout the Term hereof and shall survive the termination of this
Agreement. Consultant acknowledges that the provisions of the Non-Competition
and Non-Disclosure Agreement are fair and reasonable and necessary to protect
the good will and interest of the Corporation and its subsidiaries and shall
constitute separate and severable undertakings given for the benefit of each of
the Corporation and each subsidiary and may be enforced by the Corporation on
behalf of any of them.
9. Successors; Binding Agreement.
(a) The Corporation will use its best efforts to require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the Corporation to
expressly assume and agree to perform this Agreement in the manner and to the
same extent that the Corporation would be required to perform it if no such
succession had taken place.
(b) This Agreement shall inure to the benefit of and be enforceable by the
Corporation, its successors and assigns, and by Consultant, his personal or
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If Consultant should die while any amount
would still be payable to him hereunder if Consultant had continued to live, all
such amounts, unless otherwise provided herein, shall be paid in accordance with
the terms of this Agreement to his devisee, legatee or other designee or, if
there is no such designee, to Consultant 's estate.
10. Notice.
For purposes of this Agreement, notices and all other communications
provided for in the Agreement shall be in writing and shall be deemed to have
been duly given when delivered by hand, telecopied (receipt acknowledged) or
mailed by United States registered mail, return receipt requested, postage
prepaid, addressed to the respective addresses set forth on the first page of
this Agreement, provided that all notices to the Corporation shall be directed
to the attention of the Board with a copy to the Secretary of the Corporation or
to such other address as either party may have furnished to the other in writing
in accordance herewith, except that notice of change of address shall be
effective only upon receipt.
11. Miscellaneous.
No provision of this Agreement may be modified, waived or discharged unless
such waiver, modification or discharge is agreed to, in writing, and signed by
Executive and such officer as may be specifically designated by the Board. No
waiver by either party hereto at any time of any breach by the other party
hereto of, or compliance with, any condition or provision of this Agreement to
be performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent
time. No agreements or representations, oral or otherwise, express or implied,
with respect to the subject matter hereof have been made by either party which
are not expressly set forth in this Agreement. Each party acknowledges that the
services to be rendered under this Agreement are unique and of extraordinary
character, and in the event of a breach by either party of any of the terms of
this Agreement, the other party shall be entitled, if it so elects, to institute
and prosecute proceedings in any court of competent jurisdiction, either at law
or in equity, to obtain damages for any breach of the terms and provisions
hereunder, to enforce specific performance by the breaching party of its
obligations hereunder and to enjoin the breaching party from acting in violation
of this Agreement. Such remedies are in addition to those otherwise available at
law or in equity to the Corporation. The validity, interpretation, construction
and performance of this Agreement shall be governed by the internal laws of the
State of New York (other than the choice of law principles thereof).
12. Validity.
The invalidity or unenforceability of any provision of this Agreement shall
not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect.
13. Counterparts.
This Agreement may be executed in several counterparts, each of which shall
be deemed to be an original but all of which together will constitute one and
the same instrument.
14. Prior Agreement.
Consultant represents, warrants and covenants that the execution, delivery
and performance by Consultant of this Agreement, does not and will not
contravene, conflict with or constitute a default under or violation of any law,
regulation, judgment, decree, agreement, contract or other instrument binding
upon or applicable to Consultant. Upon the effectiveness of this Agreement, all
prior agreements between Consultant and the Corporation will be terminated and
of no further force and effect, except for the Non-Competition and
Non-Disclosure Agreement.
IN WITNESS WHEREOF, the Corporation and Consultant have executed and
delivered this Consulting Agreement on the date first above written.
WARP TECHNOLOGY HOLDINGS, INC.
By:
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Name:
Title:
CONSULTANT
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Xx. Xxxxx X. Xxxxx
