EXHIBIT 10.7
CONSULTING AGREEMENT
This consulting agreement (the "Agreement") is made this day of
August, 2001 between Accufacts Pre-Employment Screening, Inc., with offices
located at 0 Xxxxxx Xxxxxx, Xxx Xxxx, XX 00000 (the "Company")and Xxxxx X.
Xxxxxxxxx residing at _____________ (the "Consultant").
WHEREAS, Consultant is agreeable to perform services for
the Company;
WHEREAS, the Company is desirous of retaining Consultant;
and
WHEREIN, the parties are desirous of expressing their
rights and responsibilities.
NOW THEREFORE, in consideration of the foregoing and of the
mutual covenants and agreements herein, each of the parties hereto, intending to
be legally bound, agrees as follows:
1- TERM: This Agreement shall be in effect from the date of execution shown
above for a period to twelve (12) months unless sooner terminated in accordance
with the provisions of this Agreement. The term may be extended beyond that time
subject to acceptance by both parties and established as a formal written
modification to the agreement. Any other revisions to the term of this agreement
shall be in accordance with Section 11.
2 - SCOPE: Consultant agrees to provide consulting services to Company across a
broad spectrum of areas. Consulting services are to include, but are not to be
limited to: investor relations; spearheading the Company's new marketing/program
development efforts; assisting in refining/improving operations of the Company;
providing guidance for new initiatives; and generally advising senior management
across the full spectrum of Company efforts, as appropriate. In the conduct of
this effort, Consultant may prepare written reports/documents at the request of
the Company. In such cases, all reports shall be submitted to Xx. Xxxxxx Xxxxxx,
Chairman and President of the Company with copies provided as directed.
3 - CONSIDERATION: As consideration for the work performed, the Company agrees
to pay Consultant a fixed monthly retainer of three thousand eight hundred
dollars ($3,800.00) over the term of the agreement. Any expenses and
disbursements must be approved in writing by an executive officer of the Company
prior to same being incurred by Consultant.
4 - APPLICABLE BONUS PROVISION: In addition to the consideration cited in
Section 3 above, Consultant will be eligible for bonus consideration at the end
of the Company's 2001 fiscal year and again at the mid-point of the 2002 fiscal
year, provided that the Company must have at least $220,000 in operating income
for the aggregate fiscal year 2001 as computed pursuant to Company's auditor
review for fiscal year 2001. It is further expressly understood and agreed that
Company must derive a minimum of $240,000 in operating income for the first half
of fiscal year 2002 within the same definition as above. Consultant recognizes
that if the foregoing operating income benchmarks are obtained, a bonus
consideration is at the Company's sole discretion. The Company's assessment of
Consultant's efforts, performance and results will be determinative with respect
to any bonus compensation paid to Consultant.
5 - STOCK OPTION PROVISION: Company agrees to grant Consultant certain stock
options. Specifically, options for 140,000 shares of the Company's common stock
at an exercise/"strike" price of $.35 (thirty-five cents) per share. Consultant
will also be granted options to purchase an additional 140,000 shares of the
Company's common stock at an exercise/"strike" price of $.50 (fifty cents) per
share. All options will be granted and vest on a quarterly basis over the
duration of the agreement (i.e. 35,000 options at a strike price of $.35 and
35,000 options at a strike price of $.50 to be granted each quarter). Said
options will include a provision that allows for Consultant to employ a
"cashless exercise" of these options. The term of the options will be for one
and one-half (1 1/2) years from the date of this agreement with the condition
that the options must be exercised within seventy-five (75) days following the
termination without cause of the consulting relationship between the parties.
However, the expiration of the term of this Agreement on the anniversary date
will not affect the original term of the options. Not withstanding the
foregoing, in the event the consulting agreement is terminated for cause, all
options will terminate at the time of termination. Consultant understands that
he is bound by appropriate xxxxxxx xxxxxxx regulations in buying and selling
stock of the Company. Additionally, Company agrees to provide cost free
"piggy-back" registration rights for the option shares.
6 - TERMINATION: This Agreement will automatically terminate pursuant to the
provision of Section 1 unless extended in writing by the parties. Furthermore,
either party may terminate the agreement during the term with thirty (30) days
written notice. In the event of any such termination, Consultant is still
eligible for consideration of the next bonus opportunity pursuant to Section 4,
unless such termination is for cause. If termination is for cause, Consultant's
options will lapse immediately at said termination and Consultant will not be
entitled to any further consideration of potential bonus payments if the bonus
period has not ended. Additionally, the parties understand that termination will
affect certain terms and conditions of the stock option agreement as stipulated
herein. Should termination be effected between the parties other than "for
cause," the full provisions of Section 5 shall apply.
7 - CONFIDENTIALITY: Consultant recognizes that certain extremely sensitive and
significant information concerning the Company and its business methods and
practices will become known. All such information is deemed to be proprietary
between parties. Therefore, Consultant agrees that at no time, either directly
or indirectly, will such information be divulged, disclosed, or relayed to any
other party without prior written consent from the executive officer of the
Company.
8 - ORGANIZATIONAL RELATIONSHIP: This agreement shall in no way constitute,
create, or imply a joint venture, partnership, or other formal business
organization. Consultant cannot commit or bind the client in any way without
written consent and approval of an executive officer of the Company.
9 - GOVERNING LAW: This agreement and performance hereunder shall, in all
respects, be governed by the laws of the State of New York.
10 - LIMITATION OF LIABILITY: Neither party hereto shall be liable to the other
for indirect, incidental, consequential, or special damages whatsoever arising
from or related to this agreement except in the case of gross negligence or a
willful violation of the terms stated in this Agreement.
11 - AGREEMENT/MODIFICATIONS: This document constitutes the entire agreement
between parties. Consultant has been afforded the opportunity to have his own
counsel and advisors review this Agreement. Company has been afforded an
opportunity to review this Agreement. No modifications to any provisions of the
agreement shall be binding upon either party hereto unless such modifications
are agreed to in writing, signed by the respective parties.
The parties hereto hereby execute this agreement, as evidenced by the
signatures below:
/s/ XXXXX X. XXXXXXXXX
BY: _______________________________ DATE:______________________
Xxxxx X. Xxxxxxxxx
ACCUFACTS PRE-EMPLOYMENT SCREENING, INC.
/S/ XXXXXX XXXXXX
BY: _______________________________ DATE:______________________
Xxxxxx Xxxxxx
