CONSULTING AGREEMENT
This Consulting Agreement (the "Agreement") is made and entered into this
17th day of September, 2003, by and between Xxxx X. Xxxxxx (GCK) and GK
Intelligent Systems, Inc., a Delaware corporation (the "Client").
Recitals
A. GCK founded and managed all aspects of an independent record label and
online promotional vehicle and e-commerce solutions for musicians on the
Internet.
B. GCK has experience in promoting, producing, and managing musicians.
C. GCK has designed and developed a CD Jewel Case Enclosure that is
currently in patent pending status.
D. GCK has numerous contacts within the music industry including artists,
managers, producers, record labels and entertainment attorneys.
E. GCK is willing to provide consulting services to the Client based on the
terms and conditions of the agreement.
Agreement
NOW, THEREFORE, for and in consideration of the mutual promises and
covenants contained herein and for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
1. GCK Retained. The Client hereby retains GCK, and GCK hereby agrees to
make himself available to render advice and reasonable assistance to the Client
under the terms and conditions hereinafter set forth.
2. Duties. During the term of this Agreement, the duties set forth in this
Section 2 shall be performed by GKK who shall be responsible for accomplishing
the following:
(a) Advise Client regarding entertainment consulting issues that may
arise as a result of negotiations with other music industry entities or
artists; and
(b) Promote Client to assist in building industry presence for the
Client and business model; and
(c) Assist Client in obtaining, negotiating and structuring licensing
agreements for artists, labels; and
(d) Assist Client with introductions to key music and entertainment
industry personnel to assist in developing and marketing Client's website
and interactive technology systems.
1
3. Compensation. As compensation for GCK entering into this Agreement and
for the services to be rendered hereunder, GCK shall receive the following, at
the option of GKIG:
(a) $72,000 cash; or
(b) 1,200,000 shares of common stock of GKIG valued at a price of
$0.06 per share, which shares GKIG shall register on Form S-8 under the
Securities Act of 1933, and the issuance of which shall be registered by
qualification in the State of Tennessee.
(c) No shares shall be issued until such time as the both the
Registration on Form S-8 has gone effective and the State of Tennessee
Department of Commerce and Insurance, Securities Division, has approved
GKIG's application for registration by qualification.
4. Expenses. GCK shall detail in writing and submit to the Client a budget
for the projected costs and expenses for each project undertaken by GCK pursuant
to Paragraph 2. Upon the approval of the Client as to any particular project and
the related budget, GCK shall be authorized to perform or cause to be performed
the work necessary for such project and to incur costs as set forth in the
budget which costs and expenses shall be reimbursed to GCK in accordance with
the Client's normal policies, but no less frequently then monthly. In addition,
GCK is authorized to incur any other unanticipated costs and expenses associated
with such project not specifically set forth in such budget, except that any
cost in excess of $200 not already approved in a budget shall be subject to
approval by the Client, which costs and expenses will be reimbursed to GCK in
the same means as described above. The Client understands that in some cases the
provider of certain services and goods may ask for payment in advance and for
certain major disbursements, and in such case invoices from outside providers
will be sent directly to the Client.
5. Term. This Agreement shall commence on the execution date of this
Agreement and shall continue for a term of 12 months, unless terminated earlier
pursuant to Section 6 below
6. Termination. This Agreement may be terminated:
(a) By the non-breaching party if there has been a material breach of
this Agreement by the other party and such breach has not been cured by the
breaching party on or before 30 days from the date of the receipt of a
written notice of the breach with detailed description of actions
constituting alleged breach from the non-breaching party;
(b) Upon the mutual written agreement of the parties.
7. Remedies. Upon termination of this Agreement, this Agreement shall
become null and void and have no further force or effect. GCK shall mail to the
Client all documents in his possession or control concerning the Client, as the
Client shall request. If this Agreement is terminated by reasons of the breach
of any provision hereof, the non-breaching party may pursue any and all remedies
at law or in equity.
8. Accuracy of Information and Indemnification. The Client agrees to
furnish to GCK truthful and accurate information in all material respects. The
Client agrees to cooperate with GCK in the performance of GCK's consulting
services. The Client agrees to indemnify and hold harmless GCK from any loss,
liability, damages, costs and expenses (including attorneys' and other
professional fees) that GCK may incur as a result of the Client furnishing to
GCK any untruthful or inaccurate information.
2
9. Nondisclosure/Nonuse of Client Information. GCK agrees that all
information provided by Client to GCK under this Agreement shall not be
disclosed or used by GCK for any purpose other than Consultant's performance
under this Agreement.
10. Confidential Information. Any written, printed, graphic, or
electronically or magnetically recorded information furnished by Client for
GCK's use is and shall remain the sole property of Client. GCK will keep this
confidential information in the strictest confidence, and will not disclose it
by any means to any person except with Client's prior written approval, and only
to the extent necessary to perform the services under this Agreement. This
prohibition also applies to GCK's employees, agents, and subcontractors. On
termination of this Agreement or request by Client, GCK will return within two
(2) days any confidential information in GCK's possession to Client.
11. Miscellaneous
(a) Assignability. Unless otherwise agreed to in writing by both
parties hereto, the rights, obligations and benefits established by this
Agreement shall be non-assignable by either of the parties hereto and any
attempt of assignment shall be null and void and of no effect whatsoever.
(b) Relationship of the Parties. The management and employees of GCK
shall not be considered employees of the Client. Furthermore, the parties
agree that GCK shall not be deemed to be an employee, servant, partner or
joint venturer of the Client. GCK shall be considered an independent
contractor for all purposes.
(c) Entire Agreement. This Agreement contains the entire agreement of
the parties with respect to the subject matter hereof, and may not be
changed except by a writing signed by the party against whom enforcement or
discharge is sought.
(d) Waiver of Breach. The waiver by either party of a breach of any
provision of this Agreement by the other party shall not operate or be
construed as a waiver of any subsequent breach by the other party.
(e) Construction of Language. The language used in this Agreement
shall be construed as a whole according to its fair meaning, and not
strictly for nor against either party.
(f) Captions and Headings. The paragraph headings throughout this
Agreement are for convenience and reference only, and shall in no way be
deemed to define, limit or add to the meaning of any provision of this
Agreement.
(g) State Law. This Agreement, its interpretation and its application
shall be governed by the laws of the State of Texas.
(h) Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument. Execution and
delivery of this Agreement by exchange of facsimile copies bearing
facsimile signature of a party shall constitute a valid and binding
execution and delivery of this Agreement by such party. Such facsimile
copies shall constitute enforceable original documents.
3
(i) Costs. If this Agreement gives rise to a lawsuit or other legal
proceeding between any of the parties hereto, the prevailing party shall be
entitled to recover court costs, necessary disbursements (including expert
witnesses' fees) and reasonable attorneys' fees, in addition to any other
relief such party may be entitled.
(j) Notices and Waivers. Any notice or waiver required or permitted to
be given by the parties hereto shall be in writing and shall be deemed to
have been given, when delivered, 3 business days after being mailed by
certified or registered mail return receipt requested, when faxed during
regular business hours of the recipient and there is confirmation of
receipt with hard copy by regular mail, or when sent by prepaid full rate
telegram to the following addresses:
To GCK: To the Client:
------ -------------
Gust C. Xxxxxx XX Intelligent Systems, Inc.
000 Xxxxx Xxxxxxx Xxxx 0000 Xxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000 Xxxxxxx, Xxxxx 00000
(k) Public Statements. Other than any requisite regulatory filing or
disclosure, Client will not issue any press release, or make or authorize
any other public statement, oral or written, that includes GCK's name, the
name Xxxx X. Xxxxxx, or the name of any client of Xxxx X. Xxxxxx, without
GCK's prior written approval, which will not be unreasonably withheld if
Client is advised such disclosure is required under applicable securities
laws.
IN WITNESS WHERE OF, the parties have executed this Agreement to be
effective as of the day and year first above written notwithstanding the actual
date of signatures.
CLIENT
GK Intelligent Systems, Inc.
Dated: 9/17/03 /S/ Xxxx X. Xxxxxxx
----------------------------
By: Xxxx X. Xxxxxxx
Its: President and CEO
GCK
Dated: 9/17/03 /S/ Xxxx X. Xxxxxx
---------------------------
Xxx X. Xxxxxx
4
