Item 6 Attachment 10.2 Consulting Agreement with Xxxxx X. Xxxxxxx, dated as of
January 9, 2007
CONSULTING AGREEMENT
Whereas, Xxxxx X. Xxxxxxx ("Consultant") was an employee of CDEX Inc.,
a Nevada corporation (the "Company") pursuant to an Employment Agreement dated
October 1, 2005, as subsequently amended by Agreement dated January 11, 2006
(both agreements combined hereinafter termed "Employment Agreement");
Whereas, Consultant resigned from employment of Company effective
December 28, 2006;
Whereas, in view of Consultant's expertise with regard to matters
involving the Company and the Company's desire to have the continued services of
Consultant to assure a smooth and settled transition for the Company, Company
desires the continued services of Consultant; and
Whereas, the Consultant would like to provide such services and secure
a settled resolution of unresolved issues and such resolution has been strongly
negotiated over the past two weeks.
Accordingly, for good and valuable consideration the sufficiency of
which is recognized and acknowledged by both parties, the Company and Consultant
agree to the provision of this Consulting Agreement ("Agreement") as follows:
This Agreement is entered into as of January 9, 2007 (the "Effective Date"), by
and between the Company and Consultant.
1. Consulting Agreement. Subject to the terms and conditions set forth in this
Agreement, the Company agrees to engage the Consultant to perform services for
the Company, effective as of the Effective Date and subject to the terms and
conditions set forth below.
2. Term. The Company may terminate this Agreement at any time by giving the
Consultant two weeks' advance notice in writing. The term of this Agreement
shall be twelve (12) months, unless it is extended by the mutual written
agreement of the Consultant and the Company.
3. Services of the Consultant. Consultant shall (1) assure an orderly transition
of previous work that Consultant did as an employee, (2) where feasible
encourage sale of Company products, (3) where feasible encourage advancement of
Company's revenues and statue in the investment community, (4) upon reasonable
notice, furnish such information and assistance to the Company as may be
reasonably required by the Company in connection with any litigation in which it
or any of its subsidiaries or affiliates is, or may become a party and (5)
provide other nominal work as requested by Company. These activities of the
Consultant are referred to hereinafter as "Services." The Company recognizes and
agrees that the Consultant may perform additional services for other persons,
provided that such services do not represent a conflict of interest with the
Company.
4. Place of Performance. The Consultant shall be responsible for maintaining, at
his or her own expense, a place of work, any necessary equipment and supplies,
and appropriate communications facilities.
5. Compensation.
5.1 Fee. Compensation for Consultant Services shall be as follows.
5.1.1. Company shall pay Consultant $51,000 total during the first six
months of the Agreement, as Company's financial posture allows based solely on
the judgment of the Company. If, at the end of six months, in the Company's sole
judgment, its financial condition does not allow such a cash payment, in lieu of
the cash payment Company may provide to Consultant shares of restricted Class A
Common Stock equivalent to $51,000 at a price per share equal to twenty five
(25%) below the average closing price of the stock on the ten (10) business days
proceeding July 9, 2007. The discount to market value takes into consideration
the restricted nature of the stock received.
5.1.2. Company shall pay to Consultant 25,000 shares of unrestricted,
S-8, Class A Common Stock vesting on the ninth day of each of the first three
months of this Agreement (a combined total of 75,000 shares), with the first
payment beginning on the 9ths day of February, 2007.
5.1.3. Company shall pay to Consultant 200,000 shares of restricted
Class A Common Stock, vesting on January 9, 2008.
The Consultant, during the course of this transaction and prior to
the execution of this Agreement, has had the opportunity to ask questions of and
receive answers from representatives of the Company concerning the terms and
conditions of the Agreement, and to obtain any additional information or
documents relative to the Company, its business and an investment, as the
Consultant has deemed necessary. The Consultant agrees and acknowledges,
however, that it has not been furnished any offering literature or prospectus
concerning the Company other than this Agreement and, in making its decision to
acquire the CDEX stock hereunder, the Consultant has relied solely upon this
Agreement and independent investigations made by the Consultant. The Consultant
acknowledges that no representations or warranties have been made to the
Consultant by the Company, or any officer, employee, agent or affiliate of the
Company, except as contained in this Agreement.
The Consultant is sophisticated in financial matters and is able to
evaluate the risks and benefits of the investment in the CDEX stock. The
Consultant understands that his investment in the Purchased Shares is a
speculative investment that involves a high degree of risk. The Consultant can
bear the economic risks of this investment and can afford a complete loss of his
investment in the CDEX stock. The Consultant is a resident of the State of
Virginia.
2
The Consultant agrees and acknowledges that in the event that the
Company determines that any federal, state, local or foreign tax or withholding
payment is required relating to the vesting of the stock issued under this
Agreement, the Company shall have the right to require such payments from the
Consultant, or to withhold such amounts from other payments due to the
Consultant from the Company. In addition, Consultant and the Company agree that
the Company may, in its sole discretion, shorten the vesting period or waive any
of the conditions applicable to all or a portion of the stock issued pursuant to
this Agreement.
5.2. Benefits. The Consultant shall not be eligible to participate in
any of the Company's employee benefit plans, fringe benefit programs, group
insurance arrangements or similar programs.
5.3 Release. Consultant hereby forever releases and discharges the
Company and all of its subsidiaries, affiliates, divisions, successors and
assigns, and each and any of its or their past, present or future directors,
officers, attorneys, agents, trustees, administrators, employees, consultants or
assigns, from any and all claims, demands, causes of action, and liabilities of
any kind whatsoever, whether known or unknown, which Consultant ever had, now
has or hereafter may have against Company up to and including the Effective Date
of this Agreement.
6. Expenses. The Company shall reimburse the Consultant for reasonable and
authorized expenses incurred by the Consultant in connection with the
performance of the Services upon periodic presentation by the Consultant of an
itemized account of such expenses and appropriate receipts.
7. Termination of Services. Upon termination of the Consultant's Services, this
Agreement shall become null and void, except as otherwise provided in Section
12.3.
8. Compensation Upon Termination.
8.1. Upon the termination of this Agreement by Consultant, Consultant
shall only be entitled to (i) the accrued and earned portion of his fee and (ii)
reimbursement of expenses that were incurred before the termination became
effective and that are reimbursable under this Agreement. All unvested stock or
stock options may be forfeited at the sole discretion of the Company.
8.2. Upon the termination of this Agreement by the Company due to a
breach of Sections 3, 5.1, 9 or 12.10 ("actions of Consultant that are not in
the best interests of the Company"), Consultant shall only be entitled to (i)
the accrued and earned portion of his fee and (ii) reimbursement of expenses
that were incurred before the termination became effective and that are
reimbursable under this Agreement. All unvested stock or stock options may be
forfeited at the sole discretion of the Company. If the Company terminates the
Agreement for any reason other than for actions of Consultant that are not in
the best interest of the Company, Consultant will be entitled to all the
Compensation listed in Section 5.1 on the schedule there provided.
9. CDEX Agreements. As an express condition for the Company's agreement to enter
into this Agreement, and as a pre-condition to the effectiveness of this
Agreement, the Consultant and Company agree that the Non-Compete Agreement and
Non-Disclosure Agreement executed as part of the Consultant's Employment
Agreement with the Company shall remain in effect, and that the post-employment
term of those Agreements will not begin until such time as this Agreement is
terminated.
3
10. Independent Contractor Obligations. It is expressly agreed that the
Consultant is acting as an independent contractor in performing the Services.
The Company shall carry no Workers' Compensation insurance or any health or
accident insurance to cover the Consultant or any of its employees or
contractors. The Consultant shall carry all such insurance as shall be required
by law and as it deems appropriate, and shall provide the Company with a copy of
each such insurance policy upon the request of the Company. The Company shall
not pay any contribution to Social Security, unemployment insurance, federal or
state withholding taxes, nor provide any other contributions or benefits which
might be expected to be paid by an employer in an employer-employee
relationship. The Consultant expressly agrees to report and to pay, on or before
the date due, any and all contributions for taxes, unemployment insurance,
Social Security, and other benefits for itself and its employees. Upon the
request of the Company, the Consultant shall provide evidence, satisfactory to
the Company, that all such tax and other payments required to be made by the
Consultant under this Section have been timely paid when and as due.
11. Arbitration. Any failure to perform, controversy or claim arising out of or
relating to this Agreement or the breach, termination or validity thereof, shall
be determined exclusively by arbitration in accordance with the provisions of
this Section and in accordance with the rules of the American Arbitration
Association for arbitrating commercial matters. The arbitration shall be held in
Tucson, Arizona, or such other location as the parties shall mutually agree. The
arbitrators shall base their award on applicable Arizona law and judicial
precedent, and shall accompany their award with written findings of fact and
conclusions of law. The decision of the arbitrators shall be binding on the
parties, except that any party may appeal the arbitrators' decision by filing an
action to reconsider the decision of the arbitrators in a court having
jurisdiction hereunder. In any such action the arbitrators' findings of fact
shall be conclusive and binding on both parties and the sole questions to be
determined by the court shall be (i) whether or not the arbitrators' decision
was contrary to Arizona law and judicial precedent, and (ii) if the court
determines that the arbitrators' decision was contrary to Arizona law and
judicial precedent, then how the dispute shall be resolved based on the
arbitrators' findings of facts and Arizona law and judicial precedent. The
decision of the court as to the resolution of the dispute under Arizona law and
judicial precedent shall supercede the arbitrators' decision. Judgment upon the
award rendered by the arbitrators, as modified by the court, if applicable, may
be entered in any court having jurisdiction in accordance herewith.
12. Miscellaneous.
12.1 Notices. All notices, demands, requests or other communications
required or permitted to be given or made hereunder shall be in writing and
shall be hand-delivered or shall be mailed by first class registered or
certified mail, postage prepaid to the respective addresses of the parties.
Notice shall be deemed to have been received either on the day delivered, if
hand-delivered, or five (5) days after mailing, if mailed.
4
12.2 Severability. The invalidity or unenforceability of any one or
more provisions of this Agreement shall not affect the validity or
enforceability of the other provisions of this Agreement, which shall remain in
full force and effect.
12.3 Survival. It is the express intention and agreement of the parties
hereto that the provisions of Section 8, Section 9, Section 10, Section 11, and
Section 12 hereof shall survive the termination of this Agreement. In addition,
all obligations of the Company to make payments pursuant to Sections 5 and 6
with regard to fees earned or expenses incurred prior to the termination of this
Agreement shall survive any termination of this Agreement on the terms and
conditions set forth herein.
12.4 Assignment. Neither party shall assign any right or delegate any
obligation hereunder without the other party's written consent, and any
purported assignment or delegation by a party hereto without the other party's
written consent shall be void. This Agreement shall be binding upon and inure to
the benefit of the Company and its successors and the Consultant, his or her
heirs, executors, administrators and legal representatives.
12.5 Amendment; Waiver. This Agreement shall not be amended, altered or
modified except by an instrument in writing duly executed by the parties hereto.
Neither the waiver by any of the parties hereto of a breach of or a default
under any of the provisions of this Agreement, nor the failure of any of the
parties, on one or more occasions, to enforce any of the provisions of this
Agreement or to exercise any right or privilege hereunder, shall thereafter be
construed as a waiver of any subsequent breach or default of a similar nature,
or as a waiver of any such provisions, rights or privileges hereunder.
12.6 Headings. Section and subsection headings contained in this
Agreement are inserted for convenience of reference only, shall not be deemed to
be a part of this Agreement for any purpose, and shall not in any way define or
affect the meaning, construction or scope of any of the provisions hereof.
12.7 Governing Law. This Agreement, the rights and obligations of the
parties hereto, and any claims or disputes relating thereto, shall be governed
by and construed in accordance with the laws of the State of Arizona (but not
including the choice of law rules thereof). Subject to the arbitration
provisions herein, any action filed in relation to this Agreement and the
performance of the parties hereunder shall be filed in the appropriate state
court or the U.S. District Court having jurisdiction over Tucson, Arizona, the
parties hereto waiving any other venue to which they may be entitled by virtue
of domicile or otherwise. Each of the parties hereto waives a trial by jury in
regard to any claims or disputes relating to this Agreement.
12.8 Entire Agreement. This Agreement constitutes the entire agreement
between the parties respecting the engagement of the Consultant, there being no
representations, warranties or commitments except as set forth herein.
12.9 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be an original and all of which shall be
deemed to constitute one and the same instrument.
5
12.10 Disparagement. The Consultant agrees that he will not, at any
time, disparage, demean or criticize, or do or say anything to cause injury to
the business, reputation, management, employees, members of the Board of
Directors or products of the Company. The Company agrees that it will not, at
any time, disparage, demean or criticize, or do or say anything to cause injury
to the reputation of the Consultant.
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement,
or have caused this Agreement to be duly executed on their behalf effective as
of the day and year first hereinabove written.
By: ____________________ By: _________________________
Xxxxx X. Xxxxxxx Xx. X.X. Xxxx
CDEX Inc.
Chairman of the Board
