Exhibit 10.19
CONSULTING CONTRACT
THIS AGREEMENT made as of the 1st day of October, 2001.
BETWEEN:
SECURITY BIOMETRICS INC.,
a company incorporated under the laws of the State of Nevada
and having a place of business at
1410 - 0000 Xxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, X.X., X0X 0X0
(hereinafter called the "CORPORATION")
OF THE FIRST PART
AND:
XXXXX XXXXXX, Businessman, of
0 Xxxxxxxxxx Xxxxx Xxxx
Xxxxxxxxxx, X.X.
X0X 0X0
(hereinafter called the "CONSULTANT")
OF THE SECOND PART
WHEREAS the Corporation and the Consultant agreed to enter into this Agreement
to the set out the terms and conditions governing the relationship between the
Corporation and the Consultant with respect to the Consultant providing the
Services (hereinafter defined) to the Corporation.
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the covenants,
agreements and payments herein set out and provided for and other good and
valuable consideration (the receipt and sufficiency of which is hereby
acknowledged and agreed to by the parties), the parties hereto covenant and
agree as follows;
ARTICLE I
DEFINITIONS AND INTERPRETATION
DEFINITIONS
1.1 In this Agreement (including any Schedules attached hereto), the following
expressions shall have the following meanings:
m) "BUSINESS DAY" means any day, other than a Saturday, Sunday or
any other day on which the principle chartered banks located
in the City of Vancouver are not opened for business during
normal banking hours;
n) "CONFIDENTIAL INFORMATION" means all information, know-how,
data, techniques, knowledge and other confidential information
of every kind or character with
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respect to the businesses of the Corporation or corporate
affairs and operations of the Corporation and includes,
without limitation, shareholder data, compensation rates and
methods, personnel information and customer information
including customer lists stating names of contacts, telephone
numbers and other customer information;
o) "CONSULTING FEES" means the fees to be paid to the Consultant
by the Corporation as set out in Schedule "B" attached hereto
and forming part hereof;
p) "SERVICES" means those services described in Schedule "A"
attached hereto and forming part hereof;
q) "DATE OF TERMINATION" means the date the Termination Notice is
given by the Corporation or the Consultant (as the case may
be) to the Corporation or the Consultant (as the case may be)
in accordance with paragraphs 5.1, 5.2 or 5.3 hereof;
r) "JUST CAUSE" has the meaning ascribed to same by the Courts of
the State of Nevada;
s) "NON-COMPETITION PERIOD" means the period of time determined
as follows:
(i) If the Corporation terminates this Agreement in
accordance with paragraph 5.1 hereof, or, the
Consultant terminates this Agreement in accordance
with paragraph 5.3 hereof, then, the Non-Competition
Period shall be for one (1) year (12 months); OR
(ii) If the Corporation terminates this Agreement in
accordance with paragraph 5.2 hereof, then, the
Non-Competition Period shall commence on the Date of
Termination and shall end at the expiry of the Term;
OR
(iii) If the Term expires in the ordinary course of
business, and, a Date of Termination did not occur
before the expiry of the Term, then, the
Non-Competition Period shall be one (1) year (12
months) commencing on the expiry of the Term; OR
(iv) If the Term is extended, either verbally or in
writing, and the Corporation and the Consultant do
not agree in writing to the contrary, then, the
Non-Competition Period shall be for one (1) years (12
months) commencing on the date that the Consultant is
no longer retained by the Corporation;
t) "STOCK OPTIONS" means the stock options described in paragraph
4.1 hereof;
u) "STOCK OPTION PLAN" means the stock option plan registered as
the Corporation's approved option plan;
v) "TERM" means the two (2) year period specified in paragraph
2.2 hereof;
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w) "TERMINATION NOTICE" means the notice in writing given by the
Corporation to the Consultant in accordance with paragraphs
5.1 or 5.2 hereof, and, the notice in writing given by the
Consultant to the Corporation in accordance with paragraph 5.3
hereof; and
x) ""THE AGREEMENT" or "THIS AGREEMENT" means this Consulting
Contract.
HEADINGS
1.2 The headings of the Articles, clauses and paragraphs herein are inserted for
convenience of reference only and shall not affect the meaning of construction
hereof.
PREAMBLE
1.3 The preamble hereto shall form an integral part of this Agreement.
SCHEDULES
1.4 All Schedules referred to in this Agreement shall be deemed to be
incorporated in and shall form part of this Agreement.
GOVERNING LAWS
1.5 This Agreement shall be construed and interpreted in accordance with the
laws of the State of Nevada and any federal laws of the United States of America
applicable therein.
CURRENCY
1.6 All dollar amounts referred to in this Agreement are US dollars and all
dollar amount calculations to be made or paid (as the case may be) in accordance
with this Agreement are to be made and paid in US dollars.
NUMBER AND GENDER
1.7 All words importing the singular number include the plural and vice versa,
and all words importing gender include the masculine, feminine and neutral
genders.
ARTICLE 2
ENGAGEMENT/TERM
ENGAGEMENT
2.1 The Corporation hereby retains the Consultant to perform the Services and
the Consultant agrees to accept such engagement and to perform the Services, all
in accordance with the express terms, duties and obligations set out in this
Agreement.
TERM
2.2 This Agreement shall continue in full force and affect until the expiration
of two (2) years from October 1, 2001, and thereafter shall be subject to
renegotiation or renewal at the discretion of the board of directors of the
Corporation.
RELATIONSHIP
2.3 The relationship between the Corporation and the Consultant created by this
Agreement is that of an independent contractor relationship and the Consultant
shall not be or be deemed to be an employee of the Corporation.
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NON-EXCLUSIVITY
2.4 During the Term the Consultant shall be free to engage in other business
activities provided such other business activities do not violate the terms and
conditions of this Agreement or interfere with the ability of the Consultant to
provide the Services in accordance with the terms and conditions of this
Agreement.
ARTICLE 3
SERVICES/POWERS/REPORTING
SERVICES
3.1 The Consultant shall, during the Term, perform the Services to the best of
his skill and ability and attend to the performance of the Services at such
specific times and days as reasonably directed by the Chief Executive Officer of
the Corporation.
POWERS
3.2 During the Term the Consultant shall have all powers reasonably required by
the Consultant to perform the Services, including the power assigned to any
position of authority in the Corporation to which the Consultant is appointed as
set out in Schedule "A" attached hereto and forming part hereof.
REPORTING
3.3 In carrying out the Services the Consultant shall report to the Chief
Executive Officer of the Corporation or, if requested by the Chief Executive
Officer of the Corporation, to such other person or persons as may be designated
by the Chief Executive Officer of the Corporation from time to time.
LOCATION
3.4 During the Term the Consultant shall initially perform the Services at the
Corporation's offices in Vancouver, British Columbia, however, the Consultant
shall, if requested by the Corporation, perform the Services at such other
locations as may be agreed upon, from time to time, by the Corporation and the
Consultant.
ARTICLE 4
FEES AND DISBURSEMENTS
FEES/STOCK OPTIONS
4.1 In consideration of the Consultant performing the Services the Consultant
shall, subject to Article 5 hereof, receive from the Corporation the following:
a) the Consulting Fees; and
b) the stock options ("Stock Options") for the purchase of shares
in the Corporation pursuant to the Stock Option Plan to be
issued in the amount and in the manner set forth in Schedule
"B" attached hereto and forming part hereof.
DISBURSEMENTS
4.2 The Corporation shall pay and reimburse the Consultant for all reasonable
business expenses incurred by the Consultant in performing the Services which
reimbursement shall be in such manner as may be agreed upon, from time to time,
by the Corporation and the Consultant.
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ARTICLE 5
TERMINATION
JUST CAUSE
5.1 The Corporation shall be entitled, upon written notice to the Consultant, to
terminate this Agreement at any time for Just Cause. If this Agreement is
terminated for Just Cause, then, any of the Stock Options already vested and
exercised by the Consultant in accordance with the Stock Option Plan will belong
to the Consultant and the Corporation shall pay to the Consultant the Consulting
Fees payable to the Date of Termination.
WITHOUT JUST CAUSE
5.2 The Corporation shall be entitled, upon written notice to the Consultant, to
terminate this Agreement at any time and for whatever reason, other than Just
Cause. If the Corporation terminates this Agreement without Just Cause, then,
all of the Stock Options (whether vested and exercised or not) shall belong to
the Consultant and the Corporation shall pay to the Consultant the Consulting
Fees required to be paid by the Corporation to the Consultant until the expiry
of the Term as if this Agreement had not been terminated in accordance with this
paragraph.
TERMINATION BY CONSULTANT
5.3 The Consultant may voluntarily terminate this Agreement upon one (1) months'
written notice to the Corporation, in which case the Consultant shall continue
to provide the Services until the Date of Termination. If this Agreement is
terminated by the Consultant in accordance with this paragraph, then, all of the
Stock Options (whether vested and exercised or not) shall belong to the
Consultant and the Corporation shall pay to the Consultant the Consultant Fees
required to be paid by the Corporation to the Consultant up to and including the
Date of Termination.
ARTICLE 6
NON-COMPETITION/CONFIDENTIALITY
NON-COMPETITION DURING THE TERM
6.1 The Consultant recognizes and understands that in performing the Services
the Consultant will occupy a position of high fiduciary trust and confidence,
pursuant to which the Consultant will develop and acquire wide experience and
knowledge with respect to all aspects of the businesses of the Corporation. It
is the expressed intent and agreement of the Consultant and the Corporation that
such knowledge and experience shall be used solely and exclusively in the
furtherance of the business interests of the Corporation and not in any manner
detrimental to the Corporation. The Consultant therefore agrees that so long as
he is employed by the Corporation pursuant to this Agreement the Consultant
shall not engage in any practice or business in competition with the businesses
of the Corporation.
CONFIDENTIALITY
6.2 The Consultant further recognizes and understands that in the performance of
the Services the Consultant will become knowledgeable, aware and possess
Confidential Information. The Consultant therefore agrees that except with the
consent of the Chief Executive Officer of the Corporation, the Consultant shall
not disclose such Confidential Information to any persons not employed by the
Corporation so long as the Consultant is governed by this Agreement and
thereafter for and during the Non-Competition Period; provided that the
foregoing shall not apply to any Confidential Information which is or becomes
known to the public or to the competitors of the Corporation other than by a
breach of this Agreement. On
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or before the Date of Termination the Consultant shall return any and all items
of property belonging to the Corporation and the Consultant:
f) shall not remove any of the Corporations files, information,
computer data, customer lists, market or sales records;
g) shall not divulge to anyone information obtained in regard to
the methods of doing business information as to costs, prices,
profits, markets, sales, information as to customers or
affairs of the Corporation;
h) shall not call upon to serve or endeavor to serve any of the
customers and/or patronage of the Corporation with any
products or services in competition with the Corporation;
i) shall not directly or indirectly solicit, take away or
endeavor to take away any of the customers and/or patronage of
the Corporation; and
j) shall not directly or indirectly solicit, take away, hire,
employ or endeavor to employ any of the employees of the
Corporation.
NON-COMPETITION AFTER TERMINATION
6.3 The Consultant shall not either directly or indirectly as principal, agent,
owner, partner, shareholder, director, officer, consultant/advisor or otherwise,
own, operate, be engaged in the operation of or provide consulting services to
or have any financial interest in any business operation whether a
proprietorship, partnership, joint venture or private company, or otherwise
carrying on or engaged in any business competing with the Corporation during the
Non-Competition Period unless such activity is consented to in writing by the
Chief Executive Officer of the Corporation.
ACKNOWLEDGMENT
6.4 The Consultant and the Corporation acknowledge and agree that period of time
comprising the Non-Competition Period is reasonable and fair to the Consultant.
PROPRIETARY RIGHTS
6.5 Notwithstanding anything to the contrary contained in this Agreement, it is
expressly acknowledged and understood by the Consultant that all of the Services
performed by the Consultant or work product generated by the Consultant during
the Term shall vest in the Corporation absolutely and the Consultant shall have
no proprietary rights of any nature and kind in and to same.
ARTICLE 7
GENERAL
TIME
7.1 Time shall be of the essence of this Agreement.
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ENTIRE AGREEMENT
7.2 This Agreement constitutes the entire agreement between the parties hereto
with respect to the retaining of the Consultant by the Corporation to perform
the Services. There are not and shall not be any verbal statements or
representations, warranties, undertakings or agreements among the parties and
this Agreement may not be amended or modified in any respect except by written
instrument signed by the parties hereto.
RESIGNATIONS
7.3 The Consultant agrees that after the Date of Termination or the expiry of
the Term (as the case may be) the Consultant will tender to the Corporation the
Consultant's resignation from any position he may hold with the Corporation.
AMENDMENTS/MODIFICATIONS
7.4 No amendment or modification of this Agreement shall be binding unless in
writing, signed by each of the parties hereto. No waiver by either party hereto
of any breach of any of the provisions of this Agreement shall take effect or be
binding upon the party unless in writing and signed by such party. Unless
otherwise provided therein, such waiver shall not limit or affect the rights of
such party with respect to any other breach.
FURTHER DOCUMENTS
7.5 The parties hereto agree to execute and deliver such further and other
documents and perform and cause to be performed such further and other acts and
things as may be necessary or desirable in order to give full effect to this
Agreement and every part thereof.
SEVERABILITY
7.6 If any provision of this Agreement shall be held to be invalid, illegal or
unenforceable, the validity, legality or enforceability of the remaining
provisions of this Agreement shall not in any way be affected or impaired
thereby.
ASSIGNMENT
7.7 This Agreement shall not be assigned by either party hereto without the
consent of the other party which consent may be arbitrarily withheld.
CONTINUATION
7.8 For greater certainty it is agreed that a Date of Termination or the expiry
of the Term shall not relieve the parties to this Agreement from complying with
their respective obligation as set out in this Agreement.
SUCCESSORS AND ASSIGNS
7.9 This Agreement shall enure to the benefit of and be binding upon the parties
hereto and their respective heirs, legal personal representatives, successors
and permitted assigns.
NOTICES
7.10 Any notice, direction or other instrument required or permitted to be given
to the Corporation or Consultant hereunder shall be in writing and may be given
by mailing the same postage prepaid or delivering or telecopying the same
addressed to the Consultant or the Corporation at the addresses hereinafter set
forth.
(a) As to the Consultant:
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Xxxxx Xxxxxx
0 Xxxxxxxxxx Xxxxx Xxxx
Xxxxxxxxxx, X.X.
X0X 0X0
(b) As to the Corporation:
Security Biometrics Inc.
0000 - 0000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, X.X.
X0X 0X0
If any notice, direction or other instrument is given by telecopier, then, such
notice, direction or other instrument shall be deemed to have been given or made
on the day of sending the telecopy if sent during the recipient's normal
business hours on a business day or otherwise on the next business day. If there
is a disruption in postal service, then, any notice to be given in accordance
with this Agreement shall be delivered or sent by telecopier and shall not be
mailed. Notwithstanding anything to the contrary contained in this Agreement or
this paragraph 7.10, any Termination Notice given by the Consultant or
Corporation (as the case may be) pursuant to this Agreement, shall be delivered
and shall not be mailed or sent by postage pre-paid or sent by telecopier. The
Consultant or Corporation may change his or their address for service from time
to time by notice given in accordance with this paragraph 7.10.
COUNTERPARTS/FACSIMILE EXECUTION
7.11 This Agreement may be executed in one or more counterparts and/or by
facsimile and, when so executed shall form one Agreement and shall be as valid
and binding on all parties hereto as any other counterpart
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the day
and year first above written.
SECURITY BIOMETRICS INC.
Per: /s/ Xxxxxx Xxxxx /s/ Xxxxx Xxxxxx
-------------------------------------------------------- -------------------------------------------------
Authorized Signatory XXXXX XXXXXX
--------------------------------------------------------
Authorized Signatory
--------------------------------------------------------
Authorized Signatory
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SERVICES
1. During the term the Consultant shall perform the following services,
namely:
Planning
o Work with senior management to development of
Business Plan for approval by Board of Directors.
o Assist in periodic amendment of Business Plan for
approval by Board of Directors as required.
o Ensure adequate financing available prior to
implementation of certain stages of the business
plan.
o Assist in raising adequate capital by working with
senior management and capital finance
representatives.
o Assist in the development of Investor Relations
plans.
Policies and Procedures
o Work with senior management to establish sound
policies and procedures to assist in the
implementation of the Business Plan, meet all human
resource concerns, meet Board of Director guidelines,
meet compliance concerns, enhance monitoring
effectiveness, and subsequent liaison and reporting
deadlines.
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o Work with senior management to amend policies and
procedures as required.
Monitoring
o Ensure proper accounting records are maintained.
o Ensure proper systems of internal control and
internal check are established and maintained to
provide for accurate, complete and timely reporting.
o Ensure corporate assets are adequately protected.
o Monitor protective covenants of debt and equity to
assure compliance.
o Monitor stock options and warrants to assure
compliance.
Ensure Compliance with
o Regulatory authority guidelines and deadlines.
o Board Resolutions and guidelines.
o Policy and procedures.
o Report on variances to compliance to senior
management and to Board if material.
Liaison
o Auditors, Lawyers, and Regulatory Authorities.
o Board of Directors and Senior Management.
o Human Resources.
Management
o Provide management to ensure compliance with policy
and procedures, monitoring of day to day affairs aril
contractual agreements, and ensure timely, accurate
and complete reporting.
o Work with senior management to provide an atmosphere
necessary to achieve business plan objectives.
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o Work to ensure that company consistently receives
values for the services and expenditures incurred and
paid out.
Reporting
o Prepare and/or approve and/or assist in preparing
Business Plans, Policy and Procedures, and periodic
reports.
o Prepare and/or approve and/or assist in preparing
financial reporting for shareholder, director and
regulator compliance.
2. To enable the Consultant to perform the Services the Consultant will hold the
title of Chief Financial Officer of the Corporation or such other title/position
as may, from time to time, be designated by the Chief Executive Officer of the
Corporation.
1. CONSULTING FEES
1.2 The Consulting Fee to be paid by the Corporation to the Consultant
shall consist of the sum of the following:
a) a monthly fee of $7,500.00 (US) per month payable on the first
day of each and every month during the Term;
b) a car allowance of $650.00 (US) per month payable on the first
day of each and every month during the Term; and
c) a finders on all US dollar equity funds raised directly by the
Consultant, on behalf of the Corporation, which finders fee
shall be payable in US dollars and shall be calculated as
follows:
i) 8% of equity funds raised up to the first
$5,000,000.00 US;
ii) 7% of the next $1,000,000.00 US of equity funds
raised;
iii) 6% of the next $1,000,000.00 US of equity funds
raised;
iv) 5% of the next $1,000,000.00 US of equity funds
raised;
v) 4% of the next $1,000,000.00 US of equity funds
raised; and
vi) 3% of the next $1,000,000.00 US of equity funds
raised.
2. STOCK OPTIONS
2.1 In addition to the Consulting Fees described in paragraph 1.1 of this
Schedule "B" and in addition to the rights of the Consultant as set out
in paragraph 3.1 hereof, the Consultant shall receive, in accordance
with the Stock Option Plan and in addition to any option already held
or owed by the Consultant, 250,000 additional options in the stock of
the
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Corporation at a price not to exceed those granted to the Chief
Executive Officer of the Corporation. The Stock Options referred to in
this paragraph shall vest on the basis of 25% per quarter during the
Term.
3. OTHER COMPENSATION
3.1 Nothing herein will disentitle the Consultant from participating in:
a) any pension plan, bonus program, health/medical plan,
insurance plan, benefit plan or retirement plan; or
b) the Stock Option Plan or any stock purchase plan in addition
to the participation set out in paragraph 2.1 of this Schedule
"B";
established by the Corporation, from time to time, and to such extent and in
such amounts as officers and executives of the Corporation are entitled to
participate in same by the Board of Directors of the Corporation.
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