EX-10.10
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (the "Agreement") is made and entered into this
1st day of September, 2003 (the "Effective Date") by and between:
DATAMEG CORP., a New York Corporation duly organized under
law and having an usual place of business at
XXXXXXX XXXXXX, XXX XXXXXX, Xxxxxx, XX 00000,
Attn: Xxxxxx Xxxxxx, President (hereinafter
referred to as the "COMPANY")
and
XXXXXX XXXXXX of XXXXXXXXX XXXXXX XXXXXXX XXXXX,
Xxxxxxxx, (hereinafter referred to
as the "CONSULTANT").
The Company wishes to engage the Consultant to provide specific business
and management expertise and direction for the Company upon the terms
and conditions contained in this Agreement.
NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, accepted and agreed to, the Company and the Consultant
hereby agree as follows:
1. TERM. Commencing as of the Effective Date, and continuing for a
period of three (3) months (the "Term"), unless earlier terminated
pursuant to Article 4 hereof, the Consultant agrees that he will serve
as the Company's Management Consultant . It is specifically understood
and agreed that during the Term the parties will meet and determine if
they wish to continue, following the Term, with an employment
relationship. The parties understand that there is no obligation to
proceed with an employment relationship and if, for whatever reason (or
no reason), the parties are unable to reach an agreement on the
employment relationship, then this Agreement shall automatically
terminate on November 30, 2003 and thereafter be of no further fore or
effect.
2. DUTIES AND SERVICES. (a) During the Term, the Consultant
shall advise the President on matters relating to the day-to-day
operations, management and running of the Company (collectively,
"Duties" or "Services"). The Consultant will report to and take
direction from the President.
(b) Consultant agrees that he will devote substantially all of his
business time and attention to the Company as a consultant under the
terms and conditions of this Agreement.
(c) Except as noted herein, the Consultant represents and warrants
to the Company that he is under no contractual or other restriction or
obligation which are inconsistent with the execution of this Agreement,
or which will interfere with the performance of his duties hereunder.
Consultant represents and warrants that the execution and performance of
this Agreement will not violate any policies or procedures of any other
person or entity for which he may perform services.
3. CONSULTING FEE AND OPTIONS.
(a) Subject to the provisions hereof, during the Term, the Company
shall pay Consultant, monthly in arrears, a consulting fee at the
monthly rate of Twenty Thousand Dollars ($20,000.00) (the "Consulting
Fee"). Five-Thousand Dollars ($5,000.00) will be deferred on a monthly
basis and payable at the end of the Consulting Agreement Term. Should
this agreement be terminated by either party prior to the above
mentioned termination date, all funds deferred will be paid within 5
days of the termination date. The parties hereto acknowledge that the
funds are being retained by the COMPANY solely for the purpose of
minimizing the immediate cash payments required under this agreement and
that the funds deferred are in no way to be considered a performance or
other type of bonus. The parties further agree that payment is not
contingent upon any event or achieving any objective, but rather is
merely a deferral of the payment earned on a monthly basis for the
benefit of the COMPANY.
(b) In addition to the Consulting Fee, and subject to the terms
hereof, the Consultant is hereby granted a Non-Qualified Stock Option
Grant to purchase One Million Five Hundred Thousand (1,500,000) shares
of the Company's Common Capital Stock (the "Option") vesting monthly, in
arrears, at the rate of Two Hundred Fifty Thousand (250,000) options per
month at a strike price of Fourteen (.14) Cents per share and
otherwise, in accordance with the terms and conditions of the Company's
Stock Option Plan (the "Plan") and Stock Option Grant Agreement (the
"Grant Agreement").
Further, in the event that the Consultant becomes, after the Term, an
employee and enters into a mutually satisfactory Employment Agreement
with the Company, the Company agrees that as part of the terms and
conditions of employment, it will grant the Consultant, as employee, an
Incentive Stock Option Grant Agreement granting to purchase One Million
(1,000,000) shares of the Company's Common Stock vesting monthly over a
twenty four (24) month period, in arrears, with the first vesting date
occurring thirty (30) days after the Effective Date of the employment
period at a strike price of Fourteen (.14) Cents per share and
otherwise, in accordance with the terms and conditions of the Plan and
Incentive Stock Option Grant Agreement. The parties acknowledge that
this provision is not intended to limit the terms that the parties may
later agree upon as compensation in said Employment Agreement, but
rather this is provided as an inducement to enter into this Consulting
Agreement.
(c) Consultant shall be entitled to prompt reimbursement for all
pre-approved travel and other out-of-pocket expenses incurred in the
performance of his duties hereunder, upon submission and approval of
written statements and bills in accordance with the then regular
procedures of the Company.
(d) The Consultant agrees that all services hereunder will be
rendered by him as an independent contractor and that this Agreement
does not create an employer-employee relationship between the Consultant
and the Company. The Consultant shall have no right to receive any
employee benefits, including, but not limited to, health and accident
insurance, life insurance, sick leave and/or vacation. The Consultant
will be responsible for the payment of all federal and state income tax
due as a result of the Consultant entering into this Agreement.
4. EARLY TERMINATION OF THE TERM. The Company shall have the right
to terminate the Consultant's engagement hereunder FOR CAUSE, upon five
(5) days prior written notice and opportunity by the Consultant to take
corrective steps, and if the Consultant has not taken such action, his
employment shall terminate at the end of the aforesaid five (5) day
period. In the event of the death or disability of the Consultant, the
Consultant's Consulting Fee and Options shall cease and terminate as of
the date of such death or disability. If the Consultant voluntarily
ceases performing his duties and responsibility or is terminated FOR
CAUSE, then the Consulting Fee and Options shall cease and terminate as
of such date, and all amounts owed Consultant, including the pro rata
portion of the monthly consulting fee, deferred payments, and properly
document and submitted expenses will be paid within five (5) days of
said termination.
As used herein, "FOR CAUSE" shall mean the reasonable determination by
the Company's Board of Directors ("Board") that any one of the following
events has occurred: (a) the conviction of Consultant of a felony, (b)
any material willful neglect or dereliction of his duties and
responsibilities as set forth in Article 2 hereof, or (c) breach of
this Agreement in any material respect or engaging in any fraudulent
conduct or conduct detrimental to the best interests of the Company. The
Board will be required to present a written notice to the Consultant
detailing the basis of the Board's decision to terminate the Consultant,
and detailing the specific steps that need to be taken to prevent a
termination FOR CAUSE. The Consultant will have five (5) business days
to meet these steps. The Board shall make a reasonable decision and the
decision shall be final and binding on the parties.
For purposes of this Agreement, the term "disability" shall mean the
physical or mental illness or disability of Consultant such that, in the
good faith judgment of a reputable physician mutually selected by
Consultant and the President, he shall be unable to perform his duties
of employment and such inability may reasonably be expected to be
permanent or to continue for a period of at least 90 business days
during any period of twelve consecutive months. It is agreed and
understood that a disability pursuant to this Agreement constitutes a
disability pursuant to the Shareholder Agreement that the Consultant has
entered into with the Company.
5. NON-COMPETITION.
5.1 Non-Competition Period. While the Consultant is a Consultant
and for a further period of one (1) years thereafter (the "Non-
Competition Period"), the Consultant will not, without the prior written
approval of the Company, alone or as a partner, officer, director,
consultant, employee, shareholder or otherwise, engage or participate
directly or indirectly in any employment, consulting or business
activity or occupation that is or is intended to be competitive with the
business of the Company as existing on the Effective Date or as
thereafter developed by the Company through the date that the Consultant
is a Consultant, provided, however, that the holding of any investment
in any publicly held security by the Consultant shall not be deemed to
be a violation of this Article 5, if such investment does not constitute
over five percent (5%) of the outstanding issue of such security.
5.2 Restricted Business Activities. In addition to the prohibitions
set forth in Article 5.1 hereof, during the Non-Competition Period,
Consultant will not, directly or indirectly:
(a) solicit or request any employee of or consultant to the
Company to leave the employ of or cease consulting for the
Company; or
(b) solicit or request any employee of or consultant to the
Company to join the employ of, or begin consulting for, any
individual or entity that researches, develops, markets or sells
products that compete with those of the Company; or
(c) solicit or request any individual or entity that
researches, develops, markets or sells products that compete
with those of the Company, to employ or retain as a consultant
any employee or consultant of the Company; or
(d) induce or attempt to induce any supplier or vendor of
the Company to terminate or breach any written or oral agreement
or understanding with the Company.
6. PROPRIETARY RIGHTS.
6.1 Definitions. For the purposes of this Article 6, the terms set
forth below shall have the following meanings:
6.1.1 Concept and Ideas. Those concepts and ideas disclosed by the
Company to Consultant or which are first developed by Consultant as a
result of performance of the Services and which relate to the Company's
present, or prospective activities, services and products, all of which
shall remain the sole and exclusive property of the Company (hereinafter
referred as "Concepts and Ideas"). The Consultant shall have no
publication rights and all of the same shall belong exclusively to the
Company.
6.1.2 Confidential Information. That secret or proprietary
information of whatever kind or nature disclosed to Consultant, whether
or not invented, discovered or developed by Consultant, or first
developed by Consultant in the course of performance of his Duties and
Services hereunder. Such secret or proprietary information shall
include information relating to the design, manufacture, application,
know how, research and development relating to the Company's products,
materials, operating and other cost data, price lists and data relating
to pricing of the Company's products. Such secret or proprietary
information shall specifically include, without limitation, all such
secret or proprietary information contained in the Company's manuals,
memoranda, plans, drawings and designs, specifications, supply sources,
customer lists and records legended or otherwise identified by the
Company or the Board as Confidential Information but shall not include
information that is already in the public domain or is made public by a
third party without any legal obligation to the Company not to disclose
the Confidential Information. Excepted from Confidential Information is
information which by written record can be demonstrated to be known to
the Consultant prior to his disclosing it to the Company or the Company
disclosing it to him.
6.2 Non Disclosure to Third Parties. Except as required by
Consultant's duties, Consultant shall not now nor at any time in
the future, directly or indirectly, use, publish, disseminate or
otherwise disclose any Confidential Information, Concepts or
Ideas relating to the present, past or prospective business of
the Company to any third party, and all of the same, together
with publication rights, shall belong exclusively to the
Company.
6.3. Documents, etc. All documents, procedural, manuals,
guides, specifications, plans, drawings, designs and similar
materials, lists of present, past or prospective customers,
customer proposals, invitations to submit proposals, price lists
and data relating to the pricing of the Company's products and
services, records, notebooks and similar repositories of or
containing Confidential Information (including all copies
thereof) that come into Consultant's possession or control by
reason of Consultant's relationship, whether prepared by
Consultant as a result of the Services or Duties or others: (a)
are the property of the Company, (b) will not be used by
Consultant in any way adverse to the Company (c) will not be
removed from the Company's premises (except as Consultant's
duties require) and (d) at the termination (for whatever
reason), of Consultant's relationship with the Company, will be
left with, or forthwith returned by the Consultant to the
Company.
6.4 Patents, etc. Any interest in patents, patent
applications, inventions, technological innovations, copyrights,
copyrightable works, developments, discoveries, designs,
processes, formulas, know-how, data and analysis, whether
patentable or not ("Inventions"), which Consultant as a result
of rendering Services or Duties to the Company under this
Agreement may conceive, or develop shall belong exclusively to
the Company.
The Consultant hereby assigns and, to the extent any such
assignment cannot be made at present, hereby agrees to assign to
the Company, without further compensation, all of his right,
title and interest in and to all Concepts, Ideas, and Inventions
and any and all related patents, patent applications,
copyrights, copyright applications, trademarks, trade names and
other proprietary rights of the United States and throughout the
world. The Consultant will execute all documents and perform
all lawful acts which the Company considers necessary or
advisable to secure its rights hereunder and to carry out the
intent of this Agreement.
7. EQUITABLE RELIEF. Consultant agrees that any breach of Articles
5 and 6 above by him would cause irreparable damage to the Company and
that, in the event of such breach, the Company shall have, in addition
to any and all remedies of law, the right to an injunction, specific
performance or other equitable relief to prevent the violation or
threatened violation of Consultant's obligations hereunder.
8. WAIVER. Any waiver by the Company of a breach of any provision
of this Agreement shall not operate or be construed as a waiver of any
subsequent breach of the same or any other provision hereof. All
waivers by the Company shall be in writing.
9. SEVERABILITY; REFORMATION. In case any one or more of the
provisions or parts of a provision contained in this Agreement shall,
for any reason, be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not
affect any other provision or part of a provision of this Agreement; and
this Agreement shall, to the fullest extent lawful, be reformed and
construed as if such invalid or illegal or unenforceable provision, or
part of a provision, had never been contained herein, and such provision
or part reformed so that it would be valid, legal and enforceable to the
maximum extent possible. Without limiting the foregoing, if any
provision (or part of provision) contained in this Agreement shall for
any reason be held to be excessively broad as to duration, activity or
subject, it shall be construed by limiting and reducing it, so as to be
enforceable to the fullest extent compatible with then existing
applicable law.
10. ASSIGNMENT. The Company shall have the right to assign its
rights and obligations under this Agreement to a party which assumes the
Company's obligations hereunder. Consultant shall not have the right to
assign his rights or obligations under this Agreement without the prior
written consent of the Company. This Agreement shall be binding upon
and inure to the benefit of the Consultant's heirs and legal
representatives in the event of his death or disability.
11. HEADINGS. Headings and sub headings are for convenience only
and shall not be deemed to be a part of this Agreement.
12. AMENDMENTS. This Agreement may be amended or modified, in whole
or in part, only by an instrument in writing signed by all parties
hereto. Any amendment, consent, decision, waiver or other action to be
made, taken or given by the Company with respect to the Agreement shall
be made, taken or given on behalf of the Company only by authority of
the Board.
13. NOTICES. Any notices or other communications required hereunder
shall be in writing and shall be deemed given when delivered in person
or when mailed, by certified or registered first class mail, postage
prepaid, return receipt requested, addressed, if to the Company, at XX
XXXXXX XXXXX,XX XXX,Xxxxxx XX, Xxxxxx Xxxxxx, President,
with a copy to Xxxxx X. Xxxx, Esquire, Xxxxx and Xxxxxx LLP, XXX XXXXX
XXXXX, XXXXX, XX 00000 or, if to the Consultant, at XXXXX, XXXXXXX
XXXXX, XX 00000, or to such other addresses of which a party shall have
notified the others in accordance with the provisions of this Section
13.
14. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original and all of
which shall be deemed a single agreement.
15. GOVERNING LAW. This Agreement shall be construed in accordance
with and governed for all purposes by the laws of The Commonwealth of
Massachusetts applicable to contracts executed and wholly
performed within such jurisdiction. In enforcing such governing laws,
any court of competent jurisdiction shall afford all relief which a
Massachusetts court would afford under the circumstances.
16. INDEMNIFICATION. COMPANY agrees to indemnify, defend, and hold
harmless the CONSULTANT from any and all costs, expenses, judgments,
awards, fines, levies, taxes, attorney and other professional fees,
court costs, and other charges associated with any action, suit, claim,
investigation, arbitration, or mediation of any matter involving
CONSULTANT brought as the result of any matter related to or involving
CONSULTANT'S activities for the COMPANY.
17. SURVIVAL. The provisions of this Agreement shall survive the
termination of the Consultant's relationship with the Company in
accordance with their terms.
EXECUTED as an instrument under seal as of the date first above written.
DATAMEG CORP.
By:
Xxxxxx Xxxxxx, President
Hereunto Duly Authorized
CONSULTANT:
Xxxxxx Xxxxxx
