A G R E E M E N T
A G R E E M E N T
This
Agreement is made this __ day of June, 2008, by and between Xxxxxx X. Xxxxx ,
whose address is ______________________________Salt Lake City, Utah .,
hereinafter referred to as the "Consultant",
and Fonix Corporation, a Delaware corporation, whose principal place
of business is located at 000 Xxxxx 000 Xxxx Xxxxx 000, Xxxxxx, XX
00000 , hereinafter referred to as "Company" or “Fonix.”
W I T N E
S E T H:
WHEREAS, the Company desires
to engage the services of the Consultant to perform for the Company consulting
services as an independent contractor and not as an employee; and
WHEREAS, Consultant desires to
consult with the Board of Directors, the officers of the Company, and the
administrative staff, and to undertake for the Company consultation as to the
direction of certain functions of the Company as described herein.
NOW, THEREFORE, it is agreed
as follows:
1. Term. The respective duties
and obligations of the contracting parties shall be for a period of six (6)
months commencing on the ____ day of June , 2008, and may be terminated by
either party after giving thirty (30) days' written notice to the other party at
the addresses stated above or at an address chosen subsequent to the execution
of this Agreement and duly communicated to the party giving notice.
2. Consultation Assignment.
Consultant shall be available to consult with the Board of Directors, the
officers of the Company, and the heads of the administrative staff, at
reasonable times, concerning matters pertaining to the organization of the
administrative staff, the fiscal policies of the Company, the relationship of
the Company with its employees, agents and contractors, roduct development,
marketing and sales initiatives and, in general, the operations of the Company.
In addition, Consultant shall represent the Company in such transactions as the
CEO of the Company may specifically assign.
3.
Independent
Contractor. Consultant acknowledges that Consultant’s
retention does not confer upon Consultant any ownership interest in or personal
claim upon any license, right or product of the Company, nor does this Agreement
confer any employment right on Consultant. Consultant agrees that in
performing his duties under this Agreement, he shall be operating as an
independent contractor as that term is defined in United States Treasury
Department regulations and United States Internal Revenue Service rulings and
interpretations. Nothing contained herein shall in any way constitute
any association, partnership, employer/employee relationship, or joint venture
between the parties hereto, or be construed to be evidence of the intention of
the parties to establish any such relationship. Neither party shall
have any right, power or authority to make any representation nor to assume or
create any obligation, whether express or implied, on behalf of the other, or to
bind the other party in any manner whatsoever. Both of the parties
agree, respectively, that they shall not hold themselves out in any manner that
would be contrary to the terms of this Section 3.
4. Confidentiality and
Non-Disclosure. Consultant acknowledges that in performance of
services under this Agreement, he may acquire confidential information
concerning Fonix technology, know-how, product development and marketing plans,
business concepts, financial matters and other information which are valuable,
special and unique assets of Fonix (herein “Information”). Consultant
will not, during or after the term of this Agreement, disclose any Information,
no matter how acquired, to any person or entity for any reason or purpose
outside of Consultant’s enumerated consulting activities as defined hereunder,
and will not in any manner directly or indirectly aid or be a party to any acts,
the effects of which would tend to divert, diminish or prejudice the technology,
good will, business or business opportunities of Fonix. In the event
of a threatened breach by Consultant of the provisions of this paragraph, Fonix
shall be entitled to an injunction restraining Consultant from disclosing any
Information or from rendering any services to any person or entity to whom any
Information has been disclosed or threatened to be disclosed. Nothing
herein shall be construed as prohibiting Fonix from pursuing any other remedies
available to Fonix for actual breach of the provision of this paragraph,
including the recovery of damages from Consultant.
(a) In
exchange for Fonix executing this Agreement and agreeing to the retention of
Consultant’s services by Fonix, Consultant does hereby enter into the covenant
of confidentiality set forth in this Section 4 (the “Confidentiality
Covenant”) and acknowledges the adequacy of the consideration to support
the Confidentiality Covenant.
(b) The
Confidentiality Covenant shall survive the expiration or termination of this
Agreement.
5. Liability. With regard to the
services to be performed by the Consultant pursuant to the terms of this
agreement, Consultant shall not be liable to the Company, or to anyone who may
claim any right due to any relationship with the Company, for any acts or
omissions in the performance of services on the part of Consultant, except when
said acts or omissions of Consultant are due to willful misconduct or gross
negligence. The Company shall hold Consultant free and harmless from any
obligations, costs, claims, judgments, attorneys' fees, and attachments arising
from or growing out of the services rendered to the Company pursuant to the
terms of this Agreement or in any way connected with the rendering of services
hereunder, except when the same shall arise due to the willful misconduct or
gross negligence of Consultant and Consultant is adjudged to be guilty of
willful misconduct or gross negligence by a court of competent
jurisdiction.
6. Indemnification. Consultant
will indemnify and hold harmless Fonix and its directors, officers, and each
person, if any, who controls Fonix within the meaning of the Securities Act of
1933, as amended (the “Act”), from and
against any and all losses, claims, damages, expenses, liabilities or actions to
which any of them may become subject under applicable law (including, without
limitation, the Act) and will reimburse them or any legal or other expenses
incurred by them in connection with investigating or defending any claims or
actions, whether or not resulting in liability, insofar as such losses, claims,
damages, expenses, liabilities or actions arise out of or are based upon
Consultant’s willful misconduct or gross negligence. The
indemnification agreement contained in this paragraph shall remain in full force
or effect, regardless of any investigation made by or on behalf of Consultant,
and shall survive the consummation of the termination of this
Agreement.
7. Compensation. The Consultant
shall receive from the Company for the performance of the services rendered to
the Company pursuant to the terms of the agreement six hundred million shares of
Fonix Class A common stock (the “Compensation
Shares”). Any offer or issuance of the Compensation Shares
under this Agreement shall be subject to the filing and effectiveness, at or
prior to the time this Agreement is executed by Fonix, of a registration
statement under the Act on Form S-8, covering the Compensation
Shares. The Compensation Shares be issued to Consultant promptly
after the filing and effectiveness of a registration statement under the Act on
Form S-8, covering the Compensation Shares.
8. Representations and
Warranties. Consultant hereby makes the following
representations and warranties to and for he benefit of the
Company;
(a) Consultant
is an "Accredited
Investor" as defined in Regulation D under the Act.
(b) Consultant confirms that all
documentation regarding the Company requested by Consultant has been made
available by the Company for inspection and copying and that Consultant has been
supplied with all additional information that has been
required.
(c)
Consultant has such knowledge and experience in finance, securities, investments
and other business matters so as to be able to protect his interests in
connection with this transaction, and his investment in the Company hereunder is
not material when compared to his total financial capacity.
(d) Consultant
will acquire the Compensation Shares for investment and not with a view to the
sale or distribution thereof.
(e) Consultant
acknowledges that the representations, warranties and agreements made by him
herein shall survive the execution and delivery of this Agreement and the
performance of services hereunder.
9. Arbitration. Any controversy
or claim arising out of or relating to this Agreement, or the breach thereof,
shall be settled by arbitration in accordance of the rules of the American
Arbitration Association using a single arbitrator, and judgment upon the award
rendered by the arbitrator shall be entered in any court having jurisdiction
thereof. For that purpose, the parties hereto consent to the jurisdiction and
venue of an appropriate court located in the County of Salt Lake, State of Utah.
In the event that arbitration and subsequent litigation results from or arises
out of this Agreement or the performance thereof, the losing party agrees to
reimburse the prevailing party's reasonable attorney's fees, court costs, and
all other expenses, whether or not taxable by the court as costs, in addition to
any other relief to which the prevailing party may be entitled. In such event,
no arbitration proceeding shall be entertained or pursued if filed or commenced
more than one year subsequent to the date the cause(s) of action actually
accrued regardless of whether damages were otherwise as of said time
calculable.
10. Assignment. The
Consultant’s rights and duties pursuant to this Agreement are not assignable
without the express written agreement of Fonix, which may be withheld for any
reason or no reason. Fonix may assign any of its rights or
obligations hereunder.
11. Governing Law. This
Agreement shall be governed by and construed in accordance with the laws of the
State of Utah of the United States of America.
12. Amendment. This
Agreement may be amended only by the written consent of the
parties.
13. Waiver. No waiver
of any breach or default of this Agreement by either party hereto shall be
considered to be a waiver of any other breach of default of this
Agreement.
IN WITNESS WHEREOF, the
parties have executed this Agreement as of the day and year first written
above.
CONSULTANT
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By:
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_____________________________________
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Date:
June __, 2008
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Xxxxxx
X. Xxxxx,
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FONIX
CORPORATION
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By:
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______________________________________
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Date: June
__, 2008
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Xxxxx
X. Xxxxxx
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CEO
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END
