EXHIBIT 10.5
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INDEPENDENT CONSULTANT SERVICES AGREEMENT
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This agreement ("Agreement") is made by and between EssTec, Inc., a Nevada
corporation ("EssTec"), and Red Sea Ltd., a British Virgin Islands Corporation
("Consultant") and is effective as of September 1, 2001 ("Effective Date").
1. ENGAGEMENT OF SERVICES. Attached hereto as Exhibit A and incorporated
herein by this reference is a description of the services to be provided by
Consultant pursuant to the terms of this Agreement ("Consulting Services").
Consultant hereby agrees to utilize his best efforts in performing the
Consulting Services.
2. COMPENSATION. The Consultant's compensation for the Consulting Services is
set forth in Exhibit B attached hereto and incorporated herein by this
reference.
3. INDEPENDENT CONTRACTOR RELATIONSHIP. Consultant's relationship with EssTec
is that of an independent contractor, and nothing in this Agreement is
intended to, or should be construed to, create a partnership, agency, joint
venture or employment relationship. Consultant will not be entitled to any
of the benefits that EssTec may make available to its employees, including,
but not limited to, group health or life insurance, profit sharing or
retirement benefits. Consultant is not authorized to make any
representation, contract or commitment on behalf of EssTec unless
specifically requested or authorized in writing to do so by a EssTec
manager. Consultant is solely responsible for, and will file, on a timely
basis, all tax returns and payments required to be filed with, or made to,
any federal, state or local tax authority with respect to the performance
of services and receipt of fees under this Agreement. Consultant is solely
responsible for, and must maintain adequate records of, expenses incurred
in the course of performing services under this Agreement. No part of
Consultant's compensation will be subject to payroll taxes. EssTec will
regularly report amounts paid to Consultant by filing Form 1099-MISC with
the Internal Revenue Service.
4. INTELLECTUAL PROPERTY RIGHTS.
4.1. Disclosure and Assignment of Intellectual Property.
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4.1.a. Intellectual Property. "Intellectual Property" includes any and all
articles, new or useful art, discoveries, improvements, technical
developments, know-how, formulae, processes, manufacturing techniques,
trade secrets, ideas, or inventions, whether or not patentable and all
copyrightable works, designs, maskworks, trademarks, patents, patent
applications, artwork and software, that Consultant, solely or jointly
with others, makes, conceives or reduces to practice within the scope
of Consultant's work for EssTec under this Agreement.
4.1.b. Disclosure and Ownership of Intellectual Property. Consultant agrees
to make and maintain adequate and current records of all inventions,
which records shall be and remain the property of EssTec. Consultant
agrees to promptly disclose every invention to EssTec. Consultant
hereby assigns and agrees to assign to EssTec or its designee its
entire right, title and interest worldwide in all Intellectual
Property.
4.1.c. Assistance. Consultant agrees to execute upon EssTec's request a
signed transfer of ownership to EssTec for all, inventions and all
works subject to copyright protection, including, but not limited to,
content articles, computer programs, notes, sketches, drawings and
reports. Consultant agrees to assist EssTec in any reasonable manner
to obtain and enforce EssTec's benefit patents, copyrights, maskworks,
and other property rights in any and all countries, and Consultant
agrees to execute, when requested, patent, copyright or similar
applications and assignments to EssTec and any other lawful documents
deemed necessary by EssTec to carry out the purpose of this Agreement.
If called upon to render assistance under this paragraph, Consultant
will be entitled to a fair and reasonable fee in addition to
reimbursement of authorized expenses incurred at the prior written
request of EssTec. In the event that EssTec is unable for any reason
to secure Consultant's signature to any document required to apply for
or execute any patent, copyright, maskwork or other applications with
respect to any Intellectual Property (including improvements,
renewals, extensions, continuations, divisions or continuations in
part thereof), Consultant hereby irrevocably designates and appoints
EssTec and its duly authorized officers and agents as its agents and
attorneys-in-fact to act for and in its behalf and instead of
Consultant, to execute and file any such application and to do all
other lawfully permitted acts to further the prosecution and issuance
of patents, copyrights, maskworks or other rights thereon with the
same legal force and effect as if executed by Consultant.
4.2. Confidential Information.
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4.2.a. Definition of Confidential Information. "Confidential Information"
as used in this Agreement shall mean any and all technical and
non-technical information and proprietary information, including
without limitation, techniques, sketches, drawings, models,
Intellectual Property, apparatus, equipment, algorithms, software
programs and software source code documents, related to the current,
future and proposed products and services of EssTec, its suppliers and
customers, EssTec's information concerning research, experimental
work, development, design details and specifications, engineering
information, financial information, procurement requirements,
purchasing and manufacturing information, customer lists, business
forecasts, sales and merchandising and marketing plans and
information.
4.2.b. Nondisclosure and Nonuse Obligations. Consultant will use the
Confidential Information solely to perform Consulting Services for the
benefit of EssTec. Consultant agrees that it shall treat all
Confidential Information of EssTec with the same degree of care as it
accords to its own Confidential Information, and Consultant represents
that it exercises reasonable care to protect its own Confidential
Information, and Consultant represents that it exercises reasonable
care to protect its own Confidential Information. If Consultant is not
an individual, Consultant agrees that it shall disclose Confidential
Information only to those employees who need to know such information
and certifies that such employees have previously agreed, either us a
condition of employment, or in order to obtain the Confidential
Information, to he bound by terms and conditions substantially similar
to those of this Agreement. Consultant agrees not to communicate any
information to EssTec in violation of the Proprietary rights of any
third party. Consultant will immediately give notice to EssTec of any
unauthorized use or disclosure of the Confidential Information.
Consultant agrees to assist EssTec in remedying any such unauthorized
use or disclosure of the Confidential Information.
4.2.c. Exclusions from Nondisclosure Obligations. Consultant's obligations
under Paragraph 4.2(b) ("Nondisclosure") with respect to Confidential
Information shall terminate when Consultant can document that: (a) the
information was in the public domain at or subsequent to the time it
was communicated to Consultant by the disclosing party through no
fault of Consultant; (b) the information was rightfully in
Consultant's possession free of any obligation of confidence at or
subsequent to the time it was communicated to Consultant by the
disclosing party; or (c) the information was developed by employees or
agents of Consultant independently of and without reference to any
information communicated to Consultant by the disclosing party. If
Consultant is required to disclose the Confidential Information in
response to a valid order by a court or other government body, or as
otherwise required by law or as necessary to establish the rights of
either party under this Agreement, Consultant agrees to provide EssTec
with prompt written notice so as to provide EssTec with a reasonable
opportunity to protect such Confidential Information.
4.2.d. Disclosure of Third Party Information. Neither party shall
communicate any information to the other in violation of the
proprietary rights of any third party.
4.3. Return of EssTec's Property. All materials (including, without
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limitation, content articles, source code, documents, drawings,
models, apparatus, sketches, designs and lists) furnished to
Consultant by EssTec, whether delivered to Consultant by EssTec or
made by Consultant in the performance of services under this Agreement
(collectively referred to as the "EssTec Property") are the sole and
exclusive property of EssTec and/or its suppliers or customers.
Consultant agrees to keep all EssTec property at EssTec's premises
unless otherwise permitted in writing by EssTec. Consultant agrees to
promptly deliver the original and any copies of the EssTec Property to
EssTec at any time upon EssTec's request. Upon termination of this
Agreement by either party for any reason, Consultant agrees to
promptly deliver to EssTec or destroy, at EssTec's option, the
original and any copies of the EssTec Property. Within five (5) days
after the termination of this Agreement, Consultant agrees to certify
in writing that Consultant has so returned or destroyed all such
EssTec Property.
4.4. Observance of EssTec Rules. At all times while on EssTec's
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premises, Consultant will observe EssTec's rules and regulations with
respect to conduct, health and safety and protection of persons and
property.
5. NO CONFLICT OF INTEREST. During the term of this Agreement, Consultant
will not accept work, enter into a contract, or accept any obligation,
inconsistent or incompatible with Consultant's obligations, or the scope of
services rendered for EssTec, under this Agreement. Consultant warrants that,
to the best of its knowledge, there is no other contract or duty on Consultant's
part, which conflicts with or is inconsistent with this Agreement. Consultant
agrees to indemnify EssTec from any and all loss or liability incurred by reason
of the alleged breach by Consultant of any services agreement with any third
party.
6. TERM AND TERMINATION.
6.1. Term. This Agreement is effective as of the Effective Date set forth
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below.
6.2. Termination. Either party may terminate this Agreement, with or without
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cause, at any time upon fifteen (15) days' prior written notice to the other
party. In the event of termination, Consultant's stock options shall
immediately stop vesting.
6.3. Survival. The rights and obligations contained in Sections 4
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("Intellectual Property Rights") and 7 ("Noninterference with Business") will
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survive any termination or expiration of this Agreement.
7. NONINTERFERENCE WITH BUSINESS. During this Agreement, and for a period of
two years immediately following its termination, and for a period of two years
immediately following its termination, Consultant agrees not to interfere with
the business of EssTec in any manner. By way of example and not of limitation,
Consultant agrees not to solicit or induce any employee or independent
Consultant to terminate or breach an employment, contractual or other
relationship with EssTec.
8. SUCCESSOR AND ASSIGNS. Consultant may not assign this Agreement or
subcontract or otherwise delegate its obligations under this Agreement without
EssTec's prior written consent. Subject to the foregoing, this Agreement will
be for the benefit of EssTec's successors and assigns, and will be binding on
Consultant's assignees.
9. CONSEQUENTIAL DAMAGES. Neither party will be liable to the other for any
consequential, special or incidental.
10. NOTICES. Any notice required or permitted by this Agreement shall be
in writing and shall be delivered as follows with notice deemed given as
indicated: (I) by personal delivery when delivered personally; (ii) by overnight
courier upon written verification of receipt; iii) by telecopy or facsimile
transmission upon acknowledgment of receipt of electronic transmission; or (iv)
by certified or registered mail, return receipt requested, upon verification of
receipt. Notice shall be sent to the addresses set forth above or such other
address as either party may specify in writing.
11. GOVERNING LAW. This Agreement shall he governed in all respects by the
laws of the United States of America and by the laws of the State of California,
excluding California's conflict of law provisions.
12. SEVERABILITY. Should any provisions at this Agreement be held by a
court of law to be illegal, invalid or unenforceable, the legality, validity and
enforceability of the remaining provisions of this Agreement shall not be
affected or impaired thereby.
13. WAIVER. The waiver by EssTec of a breach of any provision of this
Agreement by Consultant shall not operate or be construed as a waiver of any
other or subsequent breach by Consultant.
14. INJUNCTIVE RELIEF FOR BREACH. Consultant's obligations under this
Agreement are of a unique character that gives them particular value; breach of
any of such obligations will result in irreparable and cont8inuing damage to
EssTec or which there will be no adequate remedy at law; and, in the event of
such breach, EssTec will be entitled to injunctive relief and/or a decree for
specific performance, and such other and further relief as may be proper
(including monetary damages if appropriate).
15. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties relating to this subject matter and supersedes all prior or
contemporaneous oral or written agreements concerning such subject matter. The
terms of this Agreement will govern all Project Assignments and services
undertaken by Consultant for EssTec. This Agreement will govern all Project
Assignments and services undertaken by Consultant for EssTec. This Agreement
may only be changed by mutual agreement of authorized representatives of the
parties in writing.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
"EssTec"
EssTec, Inc.,
a Nevada Corporation
__________________________
By: Xxxxx X Xxxxxx
Its: VP Operations
"Consultant"
____________________________
For Red Sea Ltd.
EXHIBIT A
CONSULTING SERVICES
The Consultant shall perform the following services under its consulting
agreement with EssTec dated on the 1st of September, 2001:
ACQUISITION STRATEGY
- Develop acquisition strategy
- Perform due diligence on potential partners and acquisition targets,
ranging from a general assessment of potential partners to detailed
due diligence (financial and operations analysis, cultural and
strategic direct fit, etc.).
- Close atleast one acquisition within one year from the signing of this
agreement.
DEVELOP ALLIANCES
- Develop alliance strategy
- Develop strategic value proposition and positioning documentation for
each potential partner. Evaluate the proposed structure and
consideration for any relationship, and
conduct such other analyses and investigations as necessary.
- Close atleast one alliance within one year from the signing of this
agreement.
BUSINESS DEVELOPMENT
- Develop business development and marketing strategy. Develop pipeline
or prospective customers. Help EssTec in closure of sales.
- Help EssTec to develop product line and their marketing strategy.
Identify markets for the expansion of EssTec's services.
- Develop penetration strategy for these markets, (acquisition, mergers.
joint ventures, subsidiaries, etc.)
- Establish EssTec's presence in atleast one new market within one year
from signing of this agreement.
EQUITY FINANCING
- Identify potential investors for EssTec.
EXHIBIT B
COMPENSATION
For services outlined in Exhibit A. above, EssTec shall pay the consultant a
compensation outlined below:
- Engagement fee of $ 150,000.
- Monthly retainer of $ 24,000. The monthly retainer will only be in
effect after successful raise of $ $5,000,000 in equity financing or $
1,000,000 in booked revenues thru the efforts of the Consultant.
- Non-qualified Stock Options of 300,000 shares at an exercise price of
$ 3.50, vested over one year, commencing from the date of this
agreement.
