EXHIBIT 10.3
NSC CONSULTING AGREEMENT
This Consulting Agreement (this "Agreement") is entered into as of August 1,
2001, by and between National Scientific Corporation, a Texas Corporation (the
"Company"), and Dr. El-Xxxxxx El-Xxxxxxx (the "Consultant").
RECITALS
1. Consultant has expertise in the area of the Company's business and is
willing to provide consulting services to the Company.
2. The Company is willing to engage Consultant as an independent contractor,
and not as an employee, on the terms and conditions set forth herein.
AGREEMENT
In consideration of the foregoing and of the mutual promises set forth herein,
and intending to be legally bound, the parties hereto agree as follows:
1. ENGAGEMENT.
a. The Company hereby engages Consultant to render, as an
independent contractor, the consulting services described in
Exhibit A hereto and such other services as may be agreed to in
writing by the Company and Consultant from time to time.
b. Consultant hereby accepts the engagement to provide consulting
services to the Company on the terms and conditions set forth
herein.
2. TERM. This Agreement will commence on the date first written above,
and unless modified by the mutual written agreement of the parties,
shall continue until the satisfactory completion of the services set
forth in Exhibit A, or for a period of two (2) years from the date of
this Agreement, whichever is shorter. Company may terminate this
Agreement upon 30 days written notice to Consultant.
3. COMPENSATION.
a. In consideration of the services to be performed by Consultant,
the Company agrees to pay Consultant in the manner and at the
rates set forth in Exhibit A.
b. Out of pocket expenses incurred by Consultant that are authorized
in advance by the Company's Project Manager as describe din
Exhibit A, and incurred and documented in accordance with the
Company's published polices regarding out-of-pocket expenses,
shall be reimbursed by Company to Consultant, as further defined
in Exhibit A.
4. CONSULTANT'S BUSINESS ACTIVITIES.
a. Consultant shall devote such time, attention and energy to the
business and affairs of the Company as requested by the Company,
and in any event no less than the average amount of contact time
specified in Exhibit A hereto.
NSC CONSULTING AGREEMENT: Page 1
b. Consultant shall keep and periodically provide to the Company a
log describing the contract hours by Consultant, as defined in
Exhibit A.
c. Consultant shall provide first right of refusal to the Company
for any Invention or proposal to create an Invention that relates
directly to the work defined in Exhibit A.
d. Consultant will be free to take any written proposal which the
Consultant has presented to the Company that the Company has
rejected or otherwise not acted upon for a period of 6 months
after date of receipt, so long as this proposal does not contain
information that would be defined as Confidential to the Company
prior to the delivery of the proposal. "Acted" in this section
only shall mean, "requested service related to the proposal, and
paid for such service."
5. CONFIDENTIAL INFORMATION AND ASSIGNMENTS. Consultant is simultaneously
executing a Confidential Information and Invention Assignment
Agreement for Consultants in the form of Exhibit B (the "Confidential
Information and Invention Assignment Agreement"). The obligations
under the Confidential Information and Invention Assignment Agreement
shall survive termination of this Agreement for any reason for a
period of 5 years.
6. INTERFERENCE WITH THE COMPANY'S BUSINESS.
a. Notwithstanding any other provision of this Agreement, for a
period of one year after termination of this Agreement,
Consultant shall not employ, solicit for employment, or advise or
recommend to any other person that such other person employ or
solicit for employment, any person employed or under contract
(whether as a consultant, employee or otherwise) by or to the
Company during the period of such person's association with the
Company and one year thereafter.
b. Notwithstanding any other provision of this Agreement, and to the
fullest extent permitted by law, for a period of one year after
termination of this Agreement, Consultant shall not directly
solicit any clients or customers of the Company without first
notifying the Company in writing. The Company has the right to
request that the Consultant not pursue a given project with a
given client or customers of the Company is such an action would
he directly harmful or damaging to current active Company
interests with that client or customer. The Consultant may not
unreasonably refuse this request, and the Company shall not make
such a request unless the potential for damage to the Company is
clear and significant.
7. REPRESENTATIONS AND WARRANTIES. Consultant represents and warrants (i)
that Consultant has no known obligations, legal or otherwise,
inconsistent with the terms of this Agreement or with Consultant's
undertaking this relationship with the Company, (ii) that the
performance of the services called for by this Agreement do not and
will not knowingly violate any applicable law, rule or regulation or
any proprietary or other right of any third party, (iii) that
Consultant will not use in the performance of his responsibilities
under this Agreement any confidential information or trade secrets of
any other person or entity and (iv) that Consultant has not entered
into or will enter into any agreement in conflict with this Agreement.
8. ATTORNEY'S FEES. Should either party hereto, or any heir, personal
representative, successor or assign of either party hereto, resort to
litigation to enforce this Agreement, the party or parties prevailing
in such litigation shall be entitled, in addition to such other relief
as may be granted, to recover its or their reasonable attorneys' fees
and costs in such litigation from the party or parties against whom
enforcement was sought.
9. ENTIRE AGREEMENT. This Agreement, contains the entire understanding
and agreement between the parties hereto with respect to its subject
NSC CONSULTING AGREEMENT: Page 2
matter and supersedes any prior or contemporaneous written or oral
agreements, representations or warranties between them respecting the
subject matter hereof.
10. AMENDMENT. This Agreement may be amended only by a writing signed by
Consultant and by a representative of the Company duly authorized.
11. SEVERABILITY. If any term, provision, covenant or condition of this
Agreement, or the application thereof to any person, place or
circumstance, shall be held by a court of competent jurisdiction to be
invalid, unenforceable or void, the remainder of this Agreement and
such term, provision, covenant or condition as applied to other
persons, places and circumstances shall remain in full force and
effect.
12. NONWAIVER. No failure or neglect of either party hereto in any
instance to exercise any right, power or privilege hereunder or under
law shall constitute a waiver of any other right, power or privilege
or of the same right, power or privilege in any other instance. All
waivers by either party hereto must be contained in a written
instrument signed by the party to be charged and, in the case of the
Company, by an executive officer of the Company or other person duly
authorized by the Company.
13. AGREEMENT TO PERFORM NECESSARY ACTS. Consultant agrees to perform any
further acts and execute and deliver any documents that may be
reasonably necessary to carry out the provisions of this Agreement.
14. ASSIGNMENT. This Agreement may not be assigned by Consultant without
the Company's prior written consent. This Agreement may be assigned by
the Company in connection with a merger or sale of all or
substantially all of its assets, and in other instances with the
Consultant's consent which consent shall not be unreasonably withheld
or delayed.
15. COMPLIANCE WITH LAW. In connection with his services rendered
hereunder, Consultant agrees to abide by all federal, state, and local
laws, ordinances and regulations.
16. INDEPENDENT CONTRACTOR. The relationship between Consultant and the
Company is that of independent contractor under a "work for hire"
arrangement. All work product developed by Consultant shall be deemed
owned and assigned to Company. This Agreement is not authority for
Consultant to act for the Company as its agent or make commitments for
the Company unless authorized explicitly in writing by the Company to
make such a specific commitment. Consultant will not be eligible for
any employee benefits, nor will the company make deductions from fees
to the consultant for taxes, insurance, bonds or the like. Consultant
retains the discretion in performing the tasks assigned, within the
scope of work specified.
17. TAXES. Consultant agrees to pay all appropriate local, state and
federal taxes.
18. GOVERNING LAW. This Agreement shall be construed in accordance with,
and all actions arising hereunder shall be governed by, the laws of
the State of Arizona.
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Agreed to this date, 8/1/2001, in Phoenix, Arizona.
National Scientific Corporation Dr. El-Xxxxxx El-Sharawy
By: /s/ Xxxxxxx X. Xxxxxxxx By: /s/ Dr. El-Xxxxxx El-Sharawy
------------------------------ ------------------------------
Name: Xxxxxxx X. Xxxxxxxx Name: Dr. El-Xxxxxx El-Sharawy
------------------------------ ------------------------------
Title: CEO Title: Consultant
------------------------------ ------------------------------
NSC CONSULTING AGREEMENT: Page 4
Exhibit A
1. DESCRIPTION OF SERVICES TO BE RENDERED
FIRST AREA: The Consultant shall provide consulting expertise in the area of
electronic device and system design, manufacture, and testing, including
resonators, inductors, transformers, HBT's, Distributed Amplifiers, memory
designs including TMOS SRAM cell design. The deliverables for this area of work
will vary on a month-to-month basis, and will be assigned by a designated
project manager from the Company. This project manager will initially be Xxxxxx
Xxxxx, although the Company may change this assignment at any time by giving 7
days notice. Deliverables requested will be produced in a timely way with good
quality, and include but are not limited to new designs, patent support
materials, diagrams, test results, device prototypes, studies, and direct
telephone or contact consulting hours. In addition to other deliverables, the
Consultant will provide a monthly time report showing his activities, which upon
approval by the project manager will form the basis calculation of compensation.
SECOND AREA: The Company specifically requests support in securing a patent on a
mask device to be used in optimizing projection equipment. This device is the
same device the parties have had under discussion for a number of years. The
deliverables for this effort are a completed patent application, and those other
documents as may be required to support the licensing of this patent to third
parties.
2. MONTHLY COMPENSATION
For the First Area listed above, the Company will pay a $125 per contact hour of
approved and documented work. The Company will pay each month of minimum
retainer of $2000 per month in cash and $1000 per month in Stock Options (as
defined below under "Stock Compensation"). The Consultant will receive this no
less than this minimum retainer payment per month, even if the Consultant has
not reported sufficient hours to generate that retainer when calculated on a
hourly basis. However, the Consultant will only be paid the retainer upon
submission and approval of his time report each month for contact hours.
Although the actual hours worked by the Consultant are expected to vary from
month to month, the Company expects the Consultant on the average to deliver the
Minimum Time To Be Expended as defined in (3) below. This amount may be
increased or decreased by the Company based on as the Consultant's ability to
deliver work or hours to the Company, or based on the current financial or
business requirement of the Company.
For the Second Area listed above, the Company will pay the an additional 10% of
net-of-company's-cost license fees generated and collected by this patent for
the Company, up to a maximum payment of $2,000,000.
For purposes of this Agreement, "net-of-company's-cost license fees" shall mean
the revenue derived by the Company from the sale of the technology product using
the IP, less the cost of goods sold to have the product manufactured (if the
Company manufactures it), and less the cost paid to other licensed holders whose
products are used in the manufacture of the product, and less direct costs
associated with achieving, supporting and maintaining the patent or intellectual
property, including associated legal costs and any testing or development
expenses associated with developing and proving the specific invention in
question. Specifically excluded from "net-of-company's-cost license fees"
calculation are such items as Company overhead, staff salaries, rent, utilities,
and other general costs of operating the business that are not directly tied to
the commercial exploitation of a specific license.
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3. MINIMUM TIME TO BE EXPENDED
The Company expects an average 3 contact hours per week of time from the
Consultant during the academic year, 5 contact average hours per week from the
Consultant during the summer. The Consultant with also provide an unspecified
number of non-contact Consulting hours on an as-needed basis.
4. PAYMENT TERMS
Payment to the Consultant will be net 7 business days or sooner from receipt by
the accounting department of an approved time report.
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5. SPECIAL BONUS COMPENSATION
After the filing and upon the award and issue of any new patents for which the
Consultant has been the primary inventor and which have been filed according to
the Company's standard approved procedures for filing, other than for the Mask
Patent whose compensation is described separately under Compensation, the
Company will pay the Consultant a bonus based on the mutually agreed value of
the patent to the Company. This value agreement will fall into the following
categories:
------------------------ ---------------------- --------------------- ---------------------- ----------------------
Class A Class B Class C Class D
------------------------ ---------------------- --------------------- ---------------------- ----------------------
Description This patent is This patent is This patent is This patent is
expected to have expected to have expected to have expected to have
major and dramatic significant effects significant effects some effects on the
effects on the on the technology on the technology technology
technology marketplace, and to marketplace, and to marketplace, and to
marketplace, and to generate revenues generate revenues to generate revenues to
generate revenues to to the Company in the Company in its the Company in its
the Company in its its first 5 years first 5 years from first 5 years from
first 5 years from from date of issue date of issue of date of issue of
date of issue of of more than more than $10,000,000 more than $2,000,000
more than $25,000,000
$100,000,000
------------------------ ---------------------- --------------------- ---------------------- ----------------------
Cash Portion of Bonus $50,000 $25,000 $5,000 $1000
------------------------ ---------------------- --------------------- ---------------------- ----------------------
Stock Option $200,000 $100,000 $50,000 $10,000
Portion of Bonus
------------------------ ---------------------- --------------------- ---------------------- ----------------------
% of company's 8% 4% 1% 0%
net-of-cost license
fees generated and
collected by this
patent for the Company
------------------------ ---------------------- --------------------- ---------------------- ----------------------
In no case will be total special bonus paid for any one patent exceed
$5,000,000. In the event that the Company and the Consultant cannot reasonably
agree on the Class of a given patent, the Company's estimate will be used until
the actual market impact and revenues can be measured over an extended period of
time, at which point the Consultant may request a change in bonus Class, which
the Company shall not unreasonably withhold. If a patent is awarded which is
less in impact and revenue than the Class D above, no bonus will be paid.
6. STOCK COMPENSATION
For purposes of this agreement, for Compensation to be provided in Stock
Options, the Company will take the average closing price of NSCT common stock
for the last 5 trading days before the end of a period, and this will be called
the current share price of NSC stock. The Company will issue stock options at
75% of the value of this figure, with a one-year vesting period, which starts on
the date of issue. In order to compute the number of options to be granted at
this discount, the "Stock Option Dollars" shown in the table will be multiplied
by 4. By way of example of not of limitation, to pay $1000 in stock option
compensation if the NSCT share price is $1.00, the Company will issue 4000
options at $0.75 each.
Although stock option compensation will be earned monthly, all options contracts
will be issued calculated quarterly for value accumulated during the previous 3
months, and will begin their vesting period on that date.
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7. TRAVEL EXPENSES
When Consultant is requested in writing to travel exclusively on Company
business, the Consultant will be reimbursed for his reasonable travel expenses
as per the then-current Standard Company Expense Reimbursement Policy, a copy of
which is maintained on the Company's primary internal web server for easy
reference. Any hours spent traveling shall be billed to the Company at 1/2 of
the normal hourly rate. When the Consultant is traveling for any purpose other
than on exclusive Company business, no reimbursement will normally be provided
for any travel expenses or travel time. Exceptions to this require a written
approval by the project manager, and approved in writing by the CFO of National
Scientific.
NSC CONSULTING AGREEMENT: Page 8
Exhibit B
CONFIDENTIAL INFORMATION AND INVENTION ASSIGNMENT AGREEMENT FOR CONSULTANT
This CONFIDENTIAL INFORMATION AND INVENTION ASSIGNMENT AGREEMENT (the
"Agreement") is made between National Scientific Corporation, a Texas
Corporation (the "Company") and the undersigned consultant.
In consideration of my relationship with the Company (which for purposes of this
Agreement shall be deemed to include any subsidiaries or Affiliates of the
Company), the receipt of confidential information while associated with the
Company, and other good and valuable consideration, I, the undersigned
individual, agree that:
1. TERM OF AGREEMENT. This Agreement shall continue in full force and effect
for the duration of my relationship with the Company and shall continue
thereafter until terminated through a written instrument signed by both parties.
2. CONFIDENTIALITY.
(a) DEFINITIONS. "Proprietary Information" is all information and any idea
whatever form, tangible or intangible, pertaining in any manner to the business
of the Company, or any of its Affiliates, or its employees, clients,
consultants, or business associates, which was produced by any employee or
consultant of the Company in the course of his or her employment or consulting
relationship or otherwise produced or acquired by or on behalf of the Company.
All Proprietary Information not generally known outside of the Company's
organization, shall be deemed "Confidential Information." By example and without
limiting the foregoing definition, Proprietary and Confidential Information
shall include, but not be limited to:
(1) formulas, research and development techniques, processes, trade secrets,
computer programs, software, electronic codes, mask works, inventions,
innovations, patents, patent applications, discoveries, improvements, data,
know-how, formats, test results, and research projects;
(2) information about costs, profits, markets, sales, contracts and lists of
customers, and distributors;
(3) business, marketing, and strategic plans;
(4) forecasts, unpublished financial information, budgets, projections, and
customer identities, characteristics and agreements; and
(5) employee personnel files and compensation information.
Confidential Information is to be broadly defined, and includes all information
that has or could have commercial value or other utility in the business in
which the Company is engaged or contemplates engaging, and all information of
which the unauthorized disclosure could be detrimental to the interests of the
Company, whether or not such information is identified as Confidential
Information by the Company.
(b) EXISTENCE OF CONFIDENTIAL INFORMATION. The Company owns and has developed
and compiled, and will develop and compile, certain trade secrets, proprietary
techniques and other Confidential Information which have great value to its
NSC CONSULTING AGREEMENT: Page 9
business. This Confidential Information includes not only information disclosed
by the Company to me, but also information developed or learned by me during the
course of my relationship with the Company.
(c) PROTECTION OF CONFIDENTIAL INFORMATION. I will not use, make available,
sell, disclose or otherwise communicate to any third party, other than in my
assigned duties and for the benefit of the Company, any of the Company's
Confidential Information, either during or after my relationship with the
Company. In the event I desire to publish the results of my work for the Company
through literature or speeches, I will submit such literature or speeches to the
President of the Company at least 10 days before dissemination of such
information for a determination of whether such disclosure may alter trade
secret status, may be prejudicial to the interests of the Company, or may
constitute an invasion of its privacy. I agree not to publish, disclose or
otherwise disseminate such information without prior written approval of the
President of the Company. I acknowledge that I am aware that the unauthorized
disclosure of Confidential Information of the Company may be highly prejudicial
to its interests, an invasion of privacy, and an improper disclosure of trade
secrets.
(d) DELIVERY OF CONFIDENTIAL INFORMATION. Upon request or when my relationship
with the Company terminates, I will immediately deliver to the Company all
copies of any and all materials and writings received from, created for, or
belonging to the Company including, but not limited to, those which relate to or
contain Confidential Information.
(e) LOCATION AND REPRODUCTION. I shall maintain at my workplace only such
Confidential Information as I have a current "need to know." I shall return to
the appropriate person or location or otherwise properly dispose of Confidential
Information once that need to know no longer exists. I shall not make copies of
or otherwise reproduce Confidential Information unless there is a legitimate
business need of the Company for reproduction.
(f) PRIOR ACTIONS AND KNOWLEDGE. I represent and warrant that from the time of
my first contact with the Company I held in strict confidence all Confidential
Information and have not disclosed any Confidential Information, directly or
indirectly, to anyone outside the Company, or used, copied, published, or
summarized any Confidential information, except to the extent otherwise
permitted in this Agreement.
(g) THIRD-PARTY INFORMATION. I acknowledge that the Company has received and in
the future will receive from third parties their confidential information
subject to a duty on the Company's part to maintain the confidentiality of such
information and to use it only for certain limited purposes. I agree that I will
at all times hold all such confidential information in the strictest confidence
and not to disclose or use it, except as necessary to perform my obligations
hereunder and as is consistent with the Company's agreement with such third
parties.
(h) THIRD PARTIES. I represent that my relationship with the Company does not
and will not breach any agreements with or duties to a former employer or any
other third party. I will not disclose to the Company or use on its behalf any
confidential information belonging to others and I will not bring onto the
premises of the Company any confidential information belonging to any such party
unless consented to in writing by such party.
(i) Consultant will be free to take any written proposal which the Consultant
has presented to the Company that the Company has rejected or otherwise not
acted upon for a period of 6 months after date of receipt, so long as this
proposal does not contain information that would be defined as Confidential to
the Company prior to the delivery of the proposal. "Acted" in this section only
shall mean, "requested service related to the proposal, and paid for such
service."
3. PROPRIETARY RIGHTS, INVENTIONS AND NEW IDEAS.
(a) DEFINITION. The term "Subject Ideas or Inventions" includes any and all
ideas, processes, trademarks, service marks, inventions, designs, technologies,
computer hardware or software, original works of authorship, formulas,
discoveries, patents, copyrights, copyrightable works products, marketing and
business ideas, and all improvements, know-how, data, rights, and claims related
NSC CONSULTING AGREEMENT: Page 10
to the foregoing that, whether or not patentable, which are conceived, developed
or created which; (1) relate directly to the Company's program of research or
development as defined in Exhibit A; (2) result from any work performed by me
for the Company; (3) involve the use of the Company's equipment, supplies,
facilities or trade secrets; (4) result from or are suggested by any work done
by the Company or at the Company's request, or any projects specifically
assigned to me; or (5) result from my access to any of the Company's memoranda,
notes, records, drawings, sketches, models, maps, customer lists, research
results, data, formulae, specifications, inventions, processes, equipment or
other materials (collectively, "Company Materials").
(b) COMPANY OWNERSHIP. All right, title and interest in and to all Subject Ideas
and Inventions, including but not limited to all registrable and patent rights
which may subsist therein, shall be held and owned solely by the Company, and
where applicable, all Subject Ideas and Inventions shall be considered works
made for hire. I shall xxxx all Subject Ideas and Inventions with the Company's
copyright or other proprietary notice as directed by the Company and shall take
all actions deemed necessary by the Company to protect the Company's rights
therein. In the event that the Subject Ideas and Inventions shall be deemed not
to constitute works made for hire, or in the event that I should otherwise, by
operation of law, be deemed to retain any rights (whether moral rights or
otherwise) to any Subject Ideas and Inventions, I agree to assign to the
Company, without further consideration, my entire right, title and interest in
and to each and every such Subject Idea and Invention.
(c) DISCLOSURE. I agree to disclose promptly to the Company full details of any
and all Subject Ideas and Inventions.
(d) MAINTENANCE OF RECORDS. I agree to keep and maintain adequate and current
written records of all Subject Ideas and Inventions and their development made
by me (solely or jointly with others) during the term of my relationship with
the Company. These records will be in the form of notes, sketches, drawings, and
any other format that may be specified by the Company. These records will be
available to and remain the sole property of the Company at all times.
(e) DETERMINATION OF SUBJECT IDEAS AND INVENTIONS. I further agree that all
information and records pertaining to any idea, process, trademark, service
xxxx, invention, technology, computer hardware or software, original work of
authorship, design, formula, discovery, patent, copyright, product, and all
improvements, know-how, rights, and claims related to the foregoing
("Intellectual Property"), that I do not believe to be a Subject Idea or
Invention, but that is conceived, developed, or reduced to practice by the
Company (alone by me or with others) during my relationship with the Company and
for one (1) year thereafter, shall be disclosed promptly by me to the Company.
The Company shall examine such information to determine if in fact the
Intellectual Property is a Subject Idea or Invention subject to this Agreement.
(f) ACCESS. Because of the difficulty of establishing when any Subject Ideas or
Inventions are first conceived by me, or whether it results from my access to
Confidential Information or Company Materials, I agree that any Subject Idea and
Invention shall, among other circumstances, be deemed to have resulted from my
access to Company Materials if: (1) it grew out of or resulted from my work with
the Company or is related to the business of the Company as defined in Exhibit
A, and (2) it is made, used, sold, exploited or reduced to practice, or an
application for patent, trademark, copyright or other proprietary protection is
filed thereon, by me or with my significant aid, within one year after
termination of my relationship with the Company.
(g) ASSISTANCE. I further agree to assist the Company in every proper way (but
at the Company's expense) to obtain and from time to time enforce patents,
copyrights or other rights or registrations on said Subject Ideas and Inventions
in any and all countries, and to that end will execute all documents necessary:
(1) to apply for, obtain and vest in the name of the Company alone (unless the
Company otherwise directs) letters patent, copyrights or other analogous
protection in any country throughout the world and when so obtained or vested to
renew and restore the same; and
(2) to defend any opposition proceedings in respect of such applications and any
opposition proceedings or petitions or applications for revocation of such
letters patent, copyright or other analogous protection; and
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(3) to cooperate with the Company (but at the Company's expense) in any
enforcement or infringement proceeding on such letters patent, copyright or
other analogous protection.
(h) AUTHORIZATION TO COMPANY. In the event the Company is unable, after
reasonable effort, to secure my signature on any patent, copyright or other
analogous protection relating to a Subject Idea and Invention, whether because
of my physical or mental incapacity or for any other reason whatsoever, I hereby
irrevocably designate and appoint the Company and its duly authorized officers
and agents as my agent and attorney-in-fact, to act for and on my behalf and
stead to execute and file any such application, applications or other documents
and to do all other lawfully permitted acts to further the prosecution,
issuance, and enforcement of letters patent, copyright or other analogous rights
or protections thereon with the same legal force and effect as if executed by
me. My obligation to assist the Company in obtaining and enforcing patents and
copyrights for Subject Ideas and Inventions in any and all countries shall
continue beyond the termination of my relationship with the Company, but the
Company shall compensate me at a reasonable rate after such termination for time
actually spent by me at the Company's request on such assistance.
(i) ACKNOWLEDGEMENT. I acknowledge that there are no currently existing ideas,
processes, inventions, discoveries, marketing or business ideas or improvements
for the subject area of this Agreement as defined in Exhibit A which I desire to
exclude from the operation of this Agreement. To the best of my knowledge, there
is no other contract to assign inventions, trademarks, copyrights, ideas,
processes, discoveries or other intellectual property that is now in existence
between me and any other person (including any business or governmental entity).
(j) NO USE OF NAME. I shall not at any time use the Company's name or any the
Company trademark(s) or trade name(s) in any advertising or publicity without
the prior written consent of the Company.
4. COMPETITIVE ACTIVITY.
(a) ACKNOWLEDGMENT. I acknowledge that the pursuit of the activities forbidden
by Section 4(b) below would necessarily involve the use, disclosure or
misappropriation of Confidential Information.
(b) PROHIBITED ACTIVITY. To prevent the above-described disclosure,
misappropriation and breach, I agree that during my relationship and for a
period of one (1) year thereafter, without the Company's express written
consent, I shall not, directly or indirectly, (i) employ, solicit for
employment, or recommend for employment any person employed by the Company (or
any Affiliate); and (ii) engage in any present or contemplated business activity
that is or may be competitive with the Company (or any Affiliate) in any state
where the Company conducts its business, unless I can prove that any action
taken in contravention of this subsection (ii) was done without the use in any
way of Confidential Information.
5. REPRESENTATIONS AND WARRANTIES. I represent and warrant (i) that I have no
obligations, legal or otherwise, inconsistent with the terms of this Agreement
or with my undertaking a relationship with the Company; (ii) that the
performance of the services called for by this Agreement do not and will not
violate any applicable law, rule or regulation or any proprietary or other right
of any third party; (iii) that I will not use in the performance of my
responsibilities for the Company any confidential information or trade secrets
of any other person or entity; and (iv) that I have not entered into or will
enter into any agreement (whether oral or written) in conflict with this
Agreement.
6. TERMINATION OBLIGATIONS.
(a) Upon the termination of my relationship with the Company or promptly upon
the Company's request, I shall surrender to the Company all equipment, tangible
Proprietary Information, documents, books, notebooks, records, reports, notes,
memoranda, drawings, sketches, models, maps, contracts, lists, computer disks
(and other computer-generated files and data), any other data and records of any
kind, and copies thereof (collectively, "Company Records"), created on any
medium and furnished to, obtained by, or prepared by myself in the course of or
incident to my relationship with the Company, that are in my possession or under
my control.
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(b) My representations, warranties, and obligations contained in this Agreement
shall survive the termination of my relationship with the Company.
(c) Following any termination of my relationship with the Company, I will fully
cooperate with the Company in all matters relating to my continuing obligations
under this Agreement.
(d) I hereby grant consent to notification by the Company to any of my future
employers or companies I consult with about my rights and obligations under this
Agreement.
(e) Upon termination of my relationship with the Company, I will execute a
Certificate acknowledging compliance with this Agreement in the form reasonably
requested by the Company.
8. MODIFICATION. No modification of this Agreement shall be valid unless made
in writing and signed by both parties.
9. BINDING EFFECT. This Agreement shall be binding upon me, my heirs,
executors, assigns and administrators and is for the benefit of the Company and
its successors and assigns.
10. GOVERNING LAW. This Agreement shall be construed in accordance with, and
all actions arising under or in connection therewith shall be governed by, the
internal laws of the State of Arizona (without reference to conflict of law
principles).
11. INTEGRATION. This Agreement sets forth the parties' mutual rights and
obligations with respect to proprietary information, prohibited competition, and
intellectual property. It is intended to be the final, complete, and exclusive
statement of the terms of the parties' agreements regarding these subjects. This
Agreement supersedes all other prior and contemporaneous agreements and
statements on these subjects, and it may not be contradicted by evidence of any
prior or contemporaneous statements or agreements. To the extent that the
practices, policies, or procedures of the Company, now or in the future, apply
to myself and are inconsistent with the terms of this Agreement, the provisions
of this Agreement shall control unless changed in writing by the Company.
12. ENTIRE AGREEMENT. This Agreement contains the entire understanding and
agreement between the parties hereto with respect to its subject matter and
supersedes any prior or contemporaneous written or oral agreements,
representations or warranties between them respecting the subject matter hereof.
13. CONSTRUCTION. This Agreement shall be construed as a whole, according to
its fair meaning, and not in favor of or against any party. By way of example
and not limitation, this Agreement shall not be construed against the party
responsible for any language in this Agreement. The headings of the paragraphs
hereof are inserted for convenience only, and do not constitute part of and
shall not be used to interpret this Agreement.
14. SEVERABILITY. If any term, provision, covenant or condition of this
Agreement, or the application thereof to any person, place or circumstance,
shall be held to be invalid, unenforceable or void, the remainder of this
Agreement and such term, provision, covenant or condition as applied to other
persons, places and circumstances shall remain in full force and effect.
15. NONWAIVER. The failure of either the Company or me, whether purposeful or
otherwise, to exercise in any instance any right, power or privilege under this
Agreement or under law shall not constitute a waiver of any other right, power
or privilege, nor of the same right, power or privilege in any other instance.
Any waiver by the Company or by me must be in writing and signed by either
myself, if I am seeking to waive any of my rights under this Agreement, or by an
officer of the Company (other than me) or some other person duly authorized by
the Company.
16. NOTICES. Any notice, request, consent or approval required or permitted to
be given under this Agreement or pursuant to law shall be sufficient if it is in
NSC CONSULTING AGREEMENT: Page 13
writing, and if and when it is hand delivered or sent by regular mail, with
postage prepaid, to my residence (as noted in the Company's records), or to the
Company's principal office, as the case may be.
17. AGREEMENT TO PERFORM NECESSARY ACTS. I agree to perform any further acts
and execute and deliver any documents that may be reasonably necessary to carry
out the provisions of this Agreement.
18. ASSIGNMENT. This Agreement may not be assigned without the Company's prior
written consent.
19. COMPLIANCE WITH LAW. In connection with his services rendered hereunder,
Consultant agrees to abide by all federal, state, and local laws, ordinances and
regulations.
Agreed to this date, August 1, 2001, in Phoenix, Arizona,
National Scientific Corporation Dr. El-Xxxxxx El-Xxxxxxx
By: /s/ Xxxxxxx X. Xxxxxxxx By: /s/ Dr. El-Xxxxxx El-Xxxxxxx
------------------------------ ------------------------------
Name: Xxxxxxx X. Xxxxxxxx Name: Dr. El-Xxxxxx El-Xxxxxxx
------------------------------ ------------------------------
Title: CEO Title: Consultant
------------------------------ ------------------------------
NSC CONSULTING AGREEMENT: Page 14
Exhibit C
LIST OF COMPANIES THAT THE CONSULTANT HAS NOTIFIED THE COMPANY IN WRITING THAT
HE PLANS TO PURSUE FOR BUSINESS DISTINCT AND SEPARATE FROM THE COMPANY'S
BUSINESS
Motorola - modeling
Transtec - materials
Protek - measurements & filters
Xxxxxxx Grumman - ferrite work
AIM Atomic Technologies - nuclear waste management
AIM Aerospace - engines
AIM Super Lattice - materials
Intel - packaging
Conexant - packaging
NSC CONSULTING AGREEMENT: Page 15
NSC CONSULTING AGREEMENT CHANGE ORDER
This Consulting Agreement Change Order ("Change Order") is entered into as of
August 1, 2002, by and between National Scientific Corporation, a Texas
Corporation (the "Company"), and Dr. El-Xxxxxx El-Xxxxxxx (the "Consultant").
This Change Order modifies the Agreement between these same parties entitled
"NSC Consulting Agreement" dated August 1, 2001.
The parties intend to leave all elements of the previous contract in force,
except as follows:
XXXXXX XXXX #0: MINIMUM HOURS / MONTH REMOVED FROM AGREEMENT
Replace the first two paragraphs under "Compensation" entitled "Monthly
Compensation with 1 paragraph shown below, and to strike the section entitled
"Minimum Time to be Expended" from that same section "Compensation."
MONTHLY COMPENSATION
FOR THE FIRST AREA LISTED ABOVE, THE COMPANY WILL PAY A $125 PER CONTACT
HOUR OF APPROVED AND DOCUMENTED WORK. THE COMPANY WILL BE FOR THESE
SERVICES USING 50% CASH AND 50% STOCK OPTIONS (AS DEFINED BELOW UNDER
"STOCK COMPENSATION"). THE CONSULTANT WILL NOT RECEIVE A MINIMUM RETAINER
PER MONTH, AND MUST BE PRE-APPROVED IN WRITING TO WORK HOURS PRIOR TO
WORKING ANY HOURS. THE CONSULTANT WILL ONLY BE PAID FOR DOCUMENTED HOURS
WORKED, AND ONLY THEN UPON SUBMISSION AND APPROVAL OF HIS TIME REPORT EACH
MONTH.
XXXXXX XXXX #0: BACKPAY COMPENSATION FOR 2002
The parties are that the Consultant was paid in full as per this Agreement for
services rendered through December 2001. The parties also agree that payments
from January 20002 to July 2002 were not made in accordance with the original
Agreement. In exchange for a full release of obligation from the Consultant for
any missing payments under this Agreement from it origin up to and including
July 2002, NSC will pay the Consultant 150,000 options in NSC common stock at a
strike price of 7 cents each.
Agreed to this date, 8/1/2002, in Scottsdale, Arizona,
National Scientific Corporation Dr. El-Xxxxxx El-Sharawy
By: /s/ Xxxxxxx X. Xxxxxxxx By: /s/ Dr. El-Xxxxxx El-Sharawy
------------------------------ ------------------------------
Name: Xxxxxxx X. Xxxxxxxx Name: Dr. El-Xxxxxx El-Sharawy
------------------------------ ------------------------------
Title: President Title: Consultant
------------------------------ ------------------------------
NSC CONSULTING AGREEMENT: Page 16
NSC CONSULTING AGREEMENT
AMENDMENT: July 31, 2003
This is an amendment ("Amendment") to the Consulting Agreement (the "Agreement")
entered into as of August 1, 2001, by and between National Scientific
Corporation, a Texas Corporation (the "Company") with offices at 00000 X. Xxxxxx
Xx Xxx 000, Xxxxxxxxxx, XX, 00000, and Dr. El-Xxxxxx El-Sharawy (the
"Consultant") located at 00000 X. 00xx Xx., Xxxxxxx, XX. 00000. The terms of the
Agreement, including the change order dated 8/1/2002 previously accepted by the
parties, are incorporated into the Amendment by reference.
TERMS
By mutual agreement of the parties today, Section 2 of the original Agreement,
Term, is herby modified so that the Agreement will continue in force for an
additional period of time. The revised termination date of the Agreement shall
now be December 31, 2005.
Agreed to this date, 7/31/2003, in Scottsdale, Arizona,
National Scientific Corporation Dr. El-Xxxxxx El-Xxxxxxx
By: /s/ Xxxxxxx X. Xxxxxxxx By: /s/ Dr. El-Xxxxxx El-Xxxxxxx
------------------------------ ------------------------------
Name: Xxxxxxx X. Xxxxxxxx Name: Dr. El-Xxxxxx El-Xxxxxxx
------------------------------ ------------------------------
Title: CEO
------------------------------
NSC CONSULTING AGREEMENT: Page 17
