CONSULTING AGREEMENT
THIS AGREEMENT (the "Agreement") is made and entered into as of December 3,
2002, by and between Xxxxx Xxxxxxx (the "Consultant"), and Citadel Security
Software Inc., a Delaware corporation (the "Company").
WHEREAS, the Company desires to retain the services of the Consultant to
provide certain business consulting services to the Company; and
WHEREAS, the Consultant desires to provide such services on the terms and
conditions contained in this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Company and the Consultant hereby
agree as follows:
ARTICLE I
SERVICES
--------
1.1 General Duties. During the term of this Agreement, the Consultant
--------------
shall provide to the Company consulting services as requested from time to time
by the Company relating to operational and business matters involving the
operations of the Company, including analysis and consultation regarding
personnel, software product features, purchasing and supplies, accounting
matters, and business strategies for the Company.
The Consultant shall also provide such additional consulting services as
may be reasonably requested from time to time by the Company. Notwithstanding
any other provision of this Agreement, Consultant shall not be required to
provide consulting services in excess of five days in any month during the term
of this Agreement, and Consultant shall not provide investment related services
under this Agreement.
1.2 Compliance with Laws. In rendering consulting services hereunder,
--------------------
the Consultant shall comply with all applicable laws, rules and regulations.
ARTICLE II
COMPENSATION
------------
2.1 Fee to Consultant. As compensation for the Consultant's services
-------------------
hereunder, the Company shall be obligated to pay to the Consultant options to
purchase up to 300,000 shares of the Company's Common Stock at an exercise price
of $0.67 per share.
2.2 Expenses; Taxes. The Consultant shall be responsible for any and
----------------
all costs and expenses incurred by the Consultant in rendering services
hereunder and for any and all income or withholding taxes applicable to the fees
paid to Consultant hereunder. The Company and the Consultant agree that all
consulting services shall be provided in Texas.
1
ARTICLE III
TERM AND TERMINATION
--------------------
3.1 Term. This Agreement shall be effective as of the date first above
----
written and shall continue in force until December 3, 2003 unless earlier
terminated in accordance with Section 3.2.
3.2 Termination. This Agreement may be terminated upon written notice
-----------
of termination by the Company to the Consultant.
ARTICLE IV
GENERAL PROVISIONS
------------------
4.1 Confidentiality. Each party agrees that all information
---------------
communicated to it by the other in connection with this Agreement, whether
before or after the effective date hereof, was and shall be received in strict
confidence and shall be used only for purposes of this Agreement, and that no
such information including, without limitation, the provisions of this
Agreement, shall be disclosed by a party to this Agreement, without the prior
written consent of the other party. The requirements and obligations of this
Section 4.1 shall survive the termination of this Agreement.
4.2 Relationship of Parties. It is the express intention and
-------------------------
understanding of the Company and the Consultant that the relationship of the
Consultant to the Company shall be at all times that of an independent
contractor, with the Consultant having full and complete liberty to use his own
free and uncontrolled will, judgment and discretion as to the method and manner
of performing the obligations of the Consultant hereunder. Nothing herein
contained or done pursuant to this Agreement shall constitute the Consultant,
its agents or employees a partner or joint venturer of the Company.
4.3 Notices. All notices that are required or may be given pursuant to
-------
the terms of this Agreement shall be in writing and shall be sufficient in all
respects if given in writing and delivered personally, by commercial messenger
service, or by registered or certified mail, postage prepaid, to the other party
at the following address or to such other address as either party shall provide
to the other party in writing in accordance with this Section 4.3:
If to the Consultant, at the address on the books of the Company.
If to the Company:
Citadel Security Software Inc.
0000 Xxxxx Xxxxxxx Xxxxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
2
4.4 Counterparts. This Agreement may be executed in one or more
------------
counterparts for the convenience of the parties hereto, all of which together
shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
COMPANY:
Citadel Security Software Inc.
By:
------------------------------------
Xxxxxx X. Xxxxxxx, President
CONSULTANT:
-----------------------------------------
Xxxxx Xxxxxxx
3
