CONSULTING AGREEMENT
This consulting agreement (this "Agreement") is made the 31st day of July,
1998, by and between Xxxx Systems, Inc., a Delaware corporation (the "Company"),
and Metrolink Holdings Ltd. (the "Consultant").
RECITALS
WHEREAS, the Company wishes to engage the Consultant with respect to
certain aspects of its business;
WHEREAS, the Consultant is willing to make available to the Company the
consulting services provided for in the Agreement as set forth below;
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the respective
covenants and agreements of the parties herein contained, the parties hereto
agree as follows:
1. TERM
The term of this Agreement shall commence on the date hereof and end on
July 31, 1999.
2. CONSULTING SERVICES
(a) Long range corporate planning, and business development in the Far
East, including the People's Republic of China for the development of
corporate strategy, market direction and implantation of the Company's
business plans;
Review and analysis of potential markets and customers in such
markets.
Review of operations and analysis of deviations from the business plan
for such markets.
(b) Compensation. In consideration of the consulting services set forth in
paragraph 2(a), and subject to the terms and conditions set forth
herein the Company hereby agrees to issue to the Consultant 200,000
shares of Common Stock (the "Shares") of the Company and register such
shares at the time of initial issuance, or immediately thereafter, on
Form S-8 under the Securities Act of 1933, as amended.
(c) Issuance. Issuance and delivery of the Shares shall be made at the
offices of Xxxx Systems, Inc. on or before July 31, 1998. On the
Closing Date, the Company shall deliver to the Consultant:
E-20
(i) the certificate or certificates evidencing the Shares to be
issued to the Consultant and the respective dates, registered in
the name of the Consultant; and
(ii) evidence that the Shares have been registered on Form S-8, or an
appropriately prepared Form S-8 to be filed upon issuance of the
Shares to the Consultant, registering for resale thereof.
(d) Expenses. During the term of the Consultant's engagement hereunder,
the Consultant shall be entitled to receive prompt reimbursement for
all reasonable expenses incurred by the Consultant in preforming
services hereunder, including all travel and living expenses while
away from home on business at the request of and in the service of the
Company, provided that such expenses are incurred and accounted for in
accordance with the policies and procedures established by the
Company, and that any expenses in excess of $500.00 have been
pre-approved in writing by the Company. Notwithstanding the foregoing,
the Consultant shall bear all expenses in connection with the initial
mailing of material describing the Company to brokers and dealers.
3. CONFIDENTIAL INFORMATION
(a) Confidential Information. In connection with the providing of Consulting
Services hereunder, the Company may provide the Consultant with information
concerning the Company which the Company deems confidential (the
"Confidential Information"). The Consultant understands and agrees that any
Confidential Information disclosed pursuant to this Agreement is secret,
proprietary and of great value to the Company, which value may be impaired
if the secrecy of such information is not maintained. The Consultant
further agrees that he will take reasonable security measures to preserve
and protect the secrecy of such Confidential Information, and to hold such
information in confidence and not to disclose such information, either
directly or indirectly to any person or entity during the term of this
Agreement or any time following the expiration or termination hereof;
provided, however, that the Consultant may disclose the Confidential
Information to an assistant to whom disclosure is necessary for the
providing of services under this Agreement.
(b) Exclusions. For purposes of this paragraph 3, the term Confidential
Information shall not include information which (i) becomes generally
available to the public other than as a result of a disclosure by the
Consultant or his assistants, agents or advisors, or (ii) becomes available
on a non-confidential basis to the Consultant from a source other than the
Company or its advisors, provided that such source is not known to the
Consultant to be bound by a Confidentiality Agreement with or other
obligation of secrecy to the Company or another party.
(c) Government Order. Notwithstanding anything to the contrary in this
Agreement, the Consultant shall not be precluded from disclosing any of the
Confidential Information pursuant to a valid order or any governmental or
regulatory authority, or pursuant to the order of any court or arbitrator.
E-21
(d) Injunctive Relief. The Consultant agrees that, since a violation of this
paragraph 3 would cause irreparable injury to the Company, and that there
may not be an adequate remedy at law for such violation, the Company shall
have the right in addition to any other remedies available at law or in
equity, to enjoin the Consultant in a court of equity for violating the
provisions of this paragraph 3.
4. REPRESENTATION AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Consultant that as of the
date hereof and as of the Closing Date (after giving effect to the transactions
contemplated hereby):
(a) Existence and Authority. The Company is a corporation duly organized
and validly existing in good standing under the laws of its
jurisdiction of incorporation and has full power and authority to own
its respective property, carry on its respective business as now being
conducted, and enter into and perform its obligations under this
Agreement and to issue and deliver the Shares to be issued by it
hereunder. The Company is duly qualified in all jurisdictions in which
it is necessary to be so qualified to transact business as currently
conducted. This Agreement, has been duly authorized by all necessary
corporate action, executed, and delivered by the Company, and
constitutes the legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms subject
to applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting the rights of creditors
generally and to general principals of equity.
(b) Authorization and Validity of Shares. The Shares have been duly
authorized and are validly issued and outstanding, fully paid and
nonassessable and free of any preemptive rights. The Shares are not
subject to any lien, pledge, security interest or other encumbrance.
(c) Authorization of Agreement. The Company has taken all actions and
obtained all consents or approvals necessary to authorize and enter
into this Agreement.
(d) No Violation. Neither the execution or delivery of this Agreement, the
issuance or delivery of Shares, the performance by the Company of its
obligations under this Agreement, nor the consummation of the
transactions contemplated hereby will conflict with, violate,
constitute a breach of or a default (with the passage of time or
otherwise) require the consent or approval of or filing with any
person (other than consents and approvals which have been obtained and
filings which have been made) or result in the imposition of a lien on
or securities interest in any properties or assets of the Company,
pursuant to the charter or bylaws of the Company, any award of any
arbitrator or any Agreement (including any Agreement with
stockholders), instruments, order, judgment, decree, statute, law,
rule or regulation to which the Company is party or to which any such
person or any of their respective properties or assets is subject.
E-22
(e) Registration. The Shares have been, or will, be upon the filing of an
S-8 Registration Statement, registered pursuant to the Securities Act
of 1933, as amended, and all applicable state laws.
5. FILINGS
The Company shall furnish to the Consultant, promptly after the sending or
filing thereof, copies of all reports which the Company sends to its equity
security holders generally, and copies of all reports and registration
statements which the Company files with the Securities and Exchange Commission
(the "Commission"), any other securities exchange or the National Association of
Securities Dealers, Inc. ("NASD").
6. SUPPLYING INFORMATION
The Company shall cooperate with the Consultant in supplying such publicity
available information as may be reasonably necessary for the Consultant to
complete and file any information reporting forms.
7. INDEMNIFICATION
(a) The Company shall indemnify the Consultant from and against any and all
expenses (including attorney's fees'), judgments, fines, claims, causes of
action, liabilities and other amounts paid (whether in settlement or otherwise
actually and reasonably incurred) by the Consultant in connection with such
action, suit or proceeding if (i) the Consultant was made a party to any action,
suit or proceeding by reason of the fact that the Consultant rendered advice or
services pursuant to this Agreement, and (ii) the Consultant acted in good faith
and in a manner reasonably believed by the Consultant to be in or not opposed to
the interests of the Company, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, or
itself, create a presumption that the Consultant did not act in good faith in or
not opposed to the best interests of the Company, and, with respect to any
criminal action or proceedings, had reasonable cause to believe that his conduct
was not unlawful. Notwithstanding the forgoing, the Company shall not indemnify
the Consultant with respect to any claim, issue or matter as to which the
Consultant shall have been adjudged to be liable for gross negligence or willful
misconduct in the performance of his duties pursuant to this Agreement unless
and only to the extent that the court in which such action or suit was brought
shall determine upon application that, despite the adjunction of liability, but
in view of all circumstances of the case, the Consultant is fairly and
reasonably entitled to be indemnified for such expenses which such court shall
deem proper.
(b) The Consultant shall indemnify the Company from and against any and all
expenses (including attorney's fees), judgments, fines, claims, causes of
action, liabilities and other amounts paid (whether in settlement or otherwise
actually and reasonably incurred) by the Company in connection with such action,
suit or proceeding if (i) the Company was made a party to any action, suit or
proceeding by reason of the fact that the Consultant rendered advice or services
pursuant to this Agreement, and (ii) the Consultant did not act in good faith
and in a manner reasonably believed by the Consultant to be in or not opposed to
the interests of the Company, and with respect to any criminal action or
proceeding, did not reasonably believe his conduct was lawful. Notwithstanding
the forgoing, the Consultant shall not indemnify the Company with respect to any
claim, issue or matter as to which the Company shall have been adjudged to be
liable for gross negligence or willful misconduct in connection with the
performance of the Consultant's duties pursuant to this Agreement unless and
only to the extent that the court in which such action or suit was brought shall
determine upon application that, despite the adjunction of liability, but in
view of all circumstances of the case, the Company is fairly and reasonably
entitled to be indemnified for such expenses which such court shall deem proper.
E-23
8. INDEPENDENT CONTRACTOR STATUS
It is expressly understood and agreed that this is a consulting agreement
only and does not constitute an employer-employee relationship. Accordingly, the
Consultant agrees that the Consultant shall be solely responsible for payment of
his own taxes or sums due to the federal, state, or local governments, overhead,
workmen's compensation, fringe benefits, pension contributions and other
expenses. It is further understood and agreed that the Consultant is an
independent contractor and the Company shall have no right to control the
activities of the Consultant other than during the express period of time in
which the Consultant is performing services hereunder, and that such services
provided hereunder and not because of any presumed employer-employee
relationship. The Consultant shall have no authority to bind the Company.
The parties further acknowledge that the Consultant's services hereunder
are not exclusive, but that the Consultant shall be performing services and
undertaking other responsibilities, for and with other entities or persons,
which may directly or indirectly compete with the Company. Accordingly, the
services of the Consultant hereunder are on a part time basis only, and the
Company shall have no discretion, control of, or interest in, the Consultant's
services which are not covered by the terms of the Agreement. The Company hereby
waives any conflict of interest which now exists or may hereafter arise with
respect to the Consultant's current employment and future employment.
9. NOTICE
All notices provided by this Agreement shall be in writing and shall be
given by facsimile transmission, overnight courier, by registered mail or by
personal delivery, by one party to the other, addressed to such other party at
the applicable address set forth below, or to such other address as may be given
for such purpose by such other party by written notice duly given hereunder.
Notice shall be deemed properly given on the date of the delivery.
To Consultant: Metrolink Holdings Ltd.
4703, 00/X, Xxxxxxx Xxxxx
00 Xxxxxxx Xxxx
Xxxxxxx, Xxxx Xxxx
To the Company: Xxxx Systems, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
E-24
10. MISCELLANEOUS
(a) Waiver. Any term or provision of this Agreement may be waived at any
time by the party entitled to the benefit thereof by a written
instrument duly executed by such party.
(b) Entire Agreement. This Agreement contains the entire understanding
between the parties hereto with respect to the transactions
contemplated hereby, and may not be amended, modified, or altered
except by an instrument in writing signed by the party against whom
such amendment, modification, or alteration is sought to be enforced.
This Agreement supersedes and replaces all other Agreements between
the parties with respect to any services to be performed by the
Consultant of behalf of the Company.
(c) Governing Law. This Agreement shall be construed and interpreted in
accordance with the laws of the State of New York.
(d) Binding Effect. This Agreement shall bind and inure to the benefit of
the parties hereto and their respective heirs, executors,
administrators, successors and assigns.
(e) Construction. The captions and headings contained herein are inserted
for convenient reference only, are not a part hereof and the same
shall not limit or constrict the provisions to which they apply.
References in this Agreement to "paragraphs" are to the paragraphs in
this Agreement, unless otherwise noted.
(f) Expenses. Each party shall pay and be responsible for the cost and
expenses, including, without limitations, attorneys' fees, incurred by
such party in connection with negotiation, preparation and execution
of this Agreement and the transactions contemplated hereby.
(g) Assignment. No party hereto may assign any of its rights or delegate
any of its obligations under this Agreement without the express
written consent of the other party hereto.
(h) No Rights to Others. Nothing herein contained or implied is intended
or shall be construed to confer upon or give to any person, firm or
corporation, other than the parties hereto.
(i) Counterparts. This Agreement may be executed simultaneously in two
counterparts, each of which shall be deemed an original, but both of
which together shall constitute one and the same Agreement, binding
upon both parties hereto, notwithstanding that both parties are not
signatories to the original or the same counterpart.
E-25
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
and year first above written.
THE "COMPANY"
XXXX SYSTEM, INC.
By: /s/ Xxxxxx X. Xxxx
-------------------------
President
THE "CONSULTANT"
METROLINK HOLDING LTD
By:
-------------------------
President
