Exhibit 10.15
XA, INC.
CONSULTING AGREEMENT
CONSULTING AGREEMENT, dated as of December 19, 2005 (this "Agreement"), by
and between XA, INC., a corporation organized and existing under the laws of the
State of Nevada (the "Company"), and XXXXX XXXXXXX (the "Consultant")
(collectively sometimes referred to as the "Parties" and individually sometimes
referred to as a "Party"). Unless otherwise indicated, all references to
Sections are to Sections in this Agreement. This Agreement is effective as of
the "Effective Date" set forth in Section 14 below.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Company desires to obtain the services of Consultant, and
Consultant desires to be employed by the Company upon the terms and conditions
hereinafter set forth;
WHEREAS, the Consultant has been elected as a Director of the Company by
the Company's majority shareholders; and
NOW, THEREFORE, in consideration of the premises and the mutual covenants,
agreements, and considerations herein contained, the Company and the Consultant
hereto agree as follows:
1. Consulting Services. The Company hereby retains the Consultant as a
Director of the Company ("Employment"), to provide, and the Consultant hereby
agrees to provide, financial, management and general business advisory services
(the "Services") to the Company as the Company may reasonably deem to be
necessary and beneficial to its efficient and effective operation of its
business operations in general. Such Services shall be rendered on a
non-exclusive basis.
1.5. Consulting Period. (a) The period during which the Consultant shall
render the Services shall commence on the date hereof (the "EFFECTIVE DATE") and
shall continue for a period of twelve (12) months, unless terminated earlier
pursuant to Section 11 herein. This Agreement is renewable for successive
one-year terms at the mutual acceptance of each Party prior to the termination
of this Agreement.
2. Scope of Employment.
(a) During the Employment, Consultant will serve as a Director of the
Company. In that connection, Consultant will (i) devote his time, attention, and
energies to the business of the Company and will diligently and to the best of
his ability perform all duties incident to his employment hereunder; (ii) use
his best efforts to promote the interests and goodwill of the Company; and (iii)
perform such other duties commensurate with his office as the Board of Directors
of the Company may from time-to-time assign to him;
(b) Section 2(a) shall not be construed as preventing Consultant from (i)
serving on corporate, civic or charitable boards or committees, or (ii) from
giving Consultant the ability to consult with and assist other companies and
individuals so as not to be adverse or compete with the Company.
]
3. Compensation and Benefits During Agreement. During the Agreement, the
Company shall provide compensation to Consultant as follows.
(a) Company shall pay Consultant two thousand dollars ($2,000) per month
that Consultant is employed under this Agreement. Consultant shall be
responsible for the payment of all taxes to the Internal Revenue Service as well
as any and all other taxes payable in the United States including taxes payable
to any state or local jurisdiction. Consultant indemnifies the Company with
respect to the payment of any and all taxes owing and due from Consultant's
compensation.
(b) As additional consideration for signing this Agreement and for agreeing
to abide and be bound by its terms, provisions and restriction, and in addition
to all other benefits described in this Agreement, Consultant, his nominees
and/or assigns, shall receive Twenty Five Thousand (25,000) shares of the
Company's restricted common stock immediately upon the effective date of this
Agreement and Twenty-Five Thousand (25,000) restricted shares of common stock
(the "Shares") on each of the following dates (corresponding to the end of the
Company's fiscal quarters), if Consultant is still employed under this Agreement
on such dates:
25,000 Shares on March 31, 2006;
25,000 Shares on June 30, 2006; and
25,000 Shares on September 30, 2006.
(c) The Company shall reimburse Consultant for business expenses incurred
by Consultant in connection with the Employment in accordance with the Company's
then-current policies.
(d) Consultant will be entitled to participate in any incentive program or
discretionary bonus program of the Company which may be implemented in the
future by the Board of Directors.
(e) Consultant will be entitled to participate in any stock option plan of
the Company which may be approved in the future by the Board of Directors.
(f) The Company hereby agrees to maintain a director and officers insurance
policy of at least $1,000,000 coverage in full force and effect during
Consultant's period of Employment including renewals of this Agreement.
Any act, or failure to act, based upon authority given pursuant to a
resolution duly adopted by the Board or based upon the advice of counsel for the
Company shall be conclusively presumed to be done, or omitted to be done, by
Consultant in good faith and in the best interests of the Company and thus shall
not be deemed grounds for Termination for Cause.
4. Confidential Information.
(a) Consultant acknowledges that the law provides the Company with
protection for its trade secrets and confidential information. Consultant will
not disclose, directly or indirectly, any of the Company's confidential business
information or confidential technical information to anyone without
authorization from the Company's management. Consultant will not use any of the
Company's confidential business information or confidential technical
information in any way, either during or after the Employment with the Company,
except as required in the course of the Employment.
(b) Consultant will strictly adhere to any obligations that may be owed to
former employers insofar as Consultant's use or disclosure of their confidential
information is concerned.
(c) Information will not be deemed part of the confidential information
restricted by this Section 4 if Consultant can show that: (i) the information
was in Consultant's possession or within Consultant's knowledge before the
Company disclosed it to Consultant; (ii) the information was or became generally
known to those who could take economic advantage of it; (iii) Consultant
obtained the information from a party having the right to disclose it to
Consultant without violation of any obligation to the Company, or (iv)
Consultant is required to disclose the information pursuant to legal process
(e.g., a subpoena), provided that Consultant notifies the Company immediately
upon receiving or becoming aware of the legal process in question. No
combination of information will be deemed to be within any of the four
exceptions in the previous sentence, however, whether or not the component parts
of the combination are within one or more exceptions, unless the combination
itself and its economic value and principles of operation are themselves within
such an exception or exceptions.
(d) All originals and all copies of any drawings, blueprints, manuals,
reports, computer programs or data, notebooks, notes, photographs, and all other
recorded, written, or printed matter relating to research, manufacturing
operations, or business of the Company made or received by Consultant during the
Employment are the property of the Company. Upon Termination of the Employment,
whether or not for Cause, Consultant will immediately deliver to the Company all
property of the Company which may still be in Consultant's possession.
Consultant will not remove or assist in removing such property from the
Company's premises under any circumstances, either during the Employment or
after Termination thereof, except as authorized by the Company's management.
(e) For a period of One (1) year after the date of Termination of the
Employment, Consultant will not, either directly or indirectly, hire or employ
or offer or participate in offering employment to any person who at the time of
such Termination or at any time during such one year period following the time
of such Termination was an employee of the Company without the prior written
consent of the Company.
5. Ownership of Intellectual Property.
(a) The Company will be the sole owner of any and all of Consultant's
Inventions that are related to the Company's business, as defined in more detail
below.
(b) For purposes of this Agreement, "Inventions" means all inventions,
discoveries, and improvements (including, without limitation, any information
relating to manufacturing techniques, processes, formulas, developments or
experimental work, work in progress, or business trade secrets), along with any
and all other work product relating thereto.
(c) An Invention is "related to the Company's business" ("Company-Related
Invention") if it is made, conceived, or reduced to practice by Consultant (in
whole or in part, either alone or jointly with others, whether or not during
regular working hours), whether or not potentially patentable or copyrightable
in the U.S. or elsewhere, and it either: (i) involves equipment, supplies,
facilities, or trade secret information of the Company; (ii) involves the time
for which Consultant was or is to be compensated by the Company; (iii) relates
to the business of the Company or to its actual or demonstrably anticipated
research and development; or (iv) results, in whole or in part, from work
performed by Consultant for the Company.
(d) Consultant will promptly disclose to the Company, or its nominee(s),
without additional compensation, all Company-Related Inventions.
(e) Consultant will assist the Company, at the Company's expense, in
protecting any intellectual property rights that may be available anywhere in
the world for such Company-Related Inventions, including signing U.S. or foreign
patent applications, oaths or declarations relating to such patent applications,
and similar documents.
(f) To the extent that any Company-Related Invention is eligible under
applicable law to be deemed a "work made for hire," or otherwise to be owned
automatically by the Company, it will be deemed as such, without additional
compensation to Consultant. In some jurisdictions, Consultant may have a right,
title, or interest ("Right," including without limitation all right, title, and
interest arising under patent law, copyright law, trade-secret law, or
otherwise, anywhere in the world, including the right to xxx for present or past
infringement) in certain Company-Related Inventions that cannot be automatically
owned by the Company. In that case, if applicable law permits Consultant to
assign Consultant's Right(s) in future Company-Related Inventions at this time,
then Consultant hereby assigns any and all such Right(s) to the Company, without
additional compensation to Consultant; if not, then Consultant agrees to assign
any and all such Right(s) in any such future Company-Related Inventions to the
Company or its nominee(s) upon request, without additional compensation to
Consultant.
6. Non-competition. As a condition to, and in consideration of, the
Company's entering into this Agreement, and giving Consultant access to certain
confidential and proprietary information, which Consultant recognizes is
valuable to the Company and, therefore, its protection and maintenance
constitutes a legitimate interest to be protected by the provisions of this
Section 6 as applied to Consultant and other employees similarly situated to
Consultant, and for ten dollars ($10) and other good and valuable consideration,
the receipt and sufficiency of which Consultant hereby acknowledges, Consultant
acknowledges and hereby agrees as follows:
(a) that Consultant is and will be engaged in the business of the Company;
(b) that Consultant has occupied a position of trust and confidence with
the Company prior to the Effective Date, and that during such period and the
period of Consultant's Employment under this Agreement, Consultant has, and
will, become familiar with the Company's trade secrets and with other
proprietary and confidential information concerning the Company;
(c) that the obligations of this Agreement are directly related to the
Employment and are necessary to protect the Company's legitimate business
interests; and that the Company's need for the covenants set forth in this
Agreement is based on the following: (i) the substantial time, money and effort
expended and to be expended by the Company in developing technical designs,
computer program source codes, marketing plans and similar confidential
information; (ii) the fact that Consultant will be personally entrusted with the
Company's confidential and proprietary information; (iii) the fact that, after
having access to the Company's technology and other confidential information,
Consultant could become a competitor of the Company; and (iv) the highly
competitive nature of the Company's industry, including the premium that
competitors of the Company place on acquiring proprietary and competitive
information; and
(d) that for a period commencing on the Effective Date and ending nine (9)
months following Termination as provided in Section 11, Consultant will not,
directly or indirectly, serve as employee, agent, consultant, stockholder,
director, co-partner or in any other individual or representative capacity, own,
operate, manage, control, engage in, invest in or participate in any manner in,
act as consultant or advisor to, render services for (alone or in association
with any person, firm, corporation or entity), or otherwise assist any person or
entity that directly or indirectly engages or proposes to engage in (i) the
same, or a substantially similar, type of business as that in which the Company
engages; or (ii) the business of distribution or sale of (A) products and
services distributed, sold or license by the Company at the time of termination;
or (B) products and services proposed at the time of Termination to be
distributed, sold or licensed by the Company, anywhere in the State of Illinois
(the "Territory"); provided, however
(e) that nothing contained herein shall be construed to prevent Consultant
from investing in the stock or securities of any competing corporation listed on
any recognized national securities exchange or traded in the over the counter
market in the United States, but only if (i) such investment is of a totally
passive nature and does not involve Consultant devoting time to the management
or operations of such corporation and Consultant is not otherwise involved in
the business of such corporation; and if (ii) Consultant and his associates (as
such term is defined in Regulation 14(A) promulgated under the Securities
Exchange Act of 1934, as in effect on the Effective Date), collectively, do not
own, directly or indirectly, more than an aggregate of two percent (2%) of the
outstanding stock or securities of such corporation.
7. Legal Fees and Expenses. In the event of a lawsuit, arbitration, or
other dispute-resolution proceeding between the Company and Consultant arising
out of or relating to this Agreement, the prevailing party, in the proceeding as
a whole and/or in any interim or ancillary proceedings (e.g., opposed motions,
including without limitation motions for preliminary or temporary injunctive
relief) will be entitled to recover its reasonable attorneys' fees and expenses
unless the court or other forum determines that such a recovery would not serve
the interests of justice.
8. Successors.
(a) This Agreement shall inure to the benefit of and be binding upon (i)
the Company and its successors and assigns; (ii) Consultant and Consultant's
heirs and legal representatives, except that Consultant's duties and
responsibilities under this Agreement are of a personal nature and will not be
assignable or delegable in whole or in part; and (iii) Consultant Parties as
provided in Section 10.
(b) The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation, Acquisition or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. As used in this Agreement, "the Company" shall mean the Company
as hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.
9. Arbitration.
(a) Except as set forth in paragraph (b) of this Section 9 or to the extent
prohibited by applicable law, any dispute, controversy or claim arising out of
or relating to this Agreement will be submitted to binding arbitration before a
single arbitrator in accordance with the National Rules for the Resolution of
Employment Disputes of the American Arbitration Association in effect on the
date of the demand for arbitration. The arbitration shall take place before a
single arbitrator, who will preferably but not necessarily be a lawyer but who
shall have at least five years' experience in working in or with event planning
companies. Unless otherwise agreed by the parties, the arbitration shall take
place in the city in which Consultant's principal office space is located at the
time of the dispute or was located at the time of Termination of the Employment
(if applicable). The arbitrator is hereby directed to take all reasonable
measures not inconsistent with the interests of justice to expedite, and
minimize the cost of, the arbitration proceedings.
(b) To protect inventions, trade secrets, or other confidential information
of Section 4, and/or to enforce the non-competition provisions of Section 6, the
Company may seek temporary, preliminary, and/or permanent injunctive relief in a
court of competent jurisdiction, in each case, without waiving its right to
arbitration.
(c) At the request of either party, the arbitrator may take any interim
measures s/he deems necessary with respect to the subject matter of the dispute,
including measures for the preservation of confidentiality set forth in this
Agreement.
(d) Judgment upon the award rendered by the arbitrator may be entered in
any court having jurisdiction.
10. Indemnification.
(a) The Company agrees to indemnify and hold harmless Consultant, his
nominees and/or assigns (a reference in this Section 10 to Consultant also
includes a reference to Consultant's nominees and/or assigns) against any and
all losses, claims, damages, obligations, penalties, judgments, awards,
liabilities, costs, expenses and disbursements (incurred in any and all actions,
suits, proceedings and investigations in respect thereof and any and all legal
and other costs, expenses and disbursements in giving testimony or furnishing
documents in response to a subpoena or otherwise), including without limitation,
the costs, expenses and disbursements, as and when incurred, of investigating,
preparing or defending any such action, suit, proceeding or investigation that
is in any way related to the Consultant's employment with the Company (whether
or not in connection with any action in which the Consultant is a party). Such
indemnification does not apply to acts performed by Consultant, which are
criminal in nature or a violation of law. The Company also agrees that
Consultant shall not have any liability (whether direct or indirect, in contract
or tort, or otherwise) to the Company, for, or in connection with, the
engagement of the Consultant under the Agreement, except to the extent that any
such liability resulted primarily and directly from Consultant's gross
negligence and willful misconduct.
(b) These indemnification provisions shall be in addition to any liability
which the Company may otherwise have to Consultant or the persons indemnified
below in this sentence and shall extend to the following: the Consultant, his
affiliated entities, partners, employees, legal counsel, agents, and controlling
persons (within the meaning of the federal securities laws), and the officers,
directors, employees, legal counsel, agents, and controlling persons of any of
them (collectively, the "the Consultant Parties").
(c) If any action, suit, proceeding or investigation is commenced, as to
which any of the Consultant parties propose indemnification under the Agreement,
they shall notify the Company with reasonable promptness; provided however, that
any failure to so notify the Company shall not relieve the Company from its
obligations hereunder. The Consultant Parties shall have the right to retain
counsel of their own choice (which shall be reasonably acceptable by the
Company) to represent them, and the Company shall pay fees, expenses and
disbursements of such counsel; and such counsel shall, to the extent consistent
with its professional responsibilities, cooperate with the Company and any
counsel designated by the Company. The Company shall be liable for any
settlement of any claim against the Consultant Parties made with the Company's
written consent, which consent shall not be unreasonably withheld. The Company
shall not, without the prior written consent of the party seeking
indemnification, which shall not be reasonably withheld, settle or compromise
any claim, or permit a default or consent to the entry of any judgment in
respect thereof, unless such settlement, compromise or consent includes, as an
unconditional term thereof, the giving by the claimant to the party seeking
indemnification of an unconditional release from all liability in respect of
such claim.
(d) The indemnification provided by this Section 10 shall not be deemed
exclusive of, or to preclude, any other rights to which those seeking
indemnification may at any time be entitled under the Company's Articles of
Incorporation, Bylaws, any law, agreement or vote of shareholders or
disinterested Directors, or otherwise, or under any policy or policies of
insurance purchased and maintained by the Company on behalf of Consultant, both
as to action in his Employment and as to action in any other capacity.
(e) Neither Termination nor completion of the Employment shall effect these
indemnification provisions which shall then remain operative and in full force
and effect.
11. Termination
This Agreement and the consulting relationship created hereby will
terminate (i) upon the disability or death of Consultant under Section 11 (a) or
11(b); (ii) with cause under Section 11 (c); (iii) for good reason under Section
11 (d); (iv) with Consultant's failure to be re-elected as a Director of the
Company or removal as a Director of the Company under Section 11(e); or by
mutual agreement of the Parties under Section 11 (f).
(a) Disability. Company shall have the right to terminate the
employment of Consultant under this Agreement for disability in the
event Consultant suffers an injury, illness, or incapacity of such
character as to substantially disable him from performing his duties
without reasonable accommodation by Consultant hereunder for a period
of more than thirty (30) consecutive days upon Company giving at least
thirty (30) days written notice of termination.
(b) Death. This agreement will terminate on the Death of the Consultant.
(c) With Cause. Company may terminate this Agreement at any time
because of, (i) the conviction of Consultant of an act or acts
constituting a felony involving moral turpitude, dishonesty or theft
or fraud; or (ii) Consultant's gross negligence in the performance of
his duties hereunder.
(d) Good Reason. The Consultant may terminate his employment for
"Good Reason" by giving Company ten (10) days written notice if:
(i) he is assigned, without his express written consent, any
duties materially inconsistent with his positions, duties,
responsibilities, or status with Company as of the date hereof,
or a change in his reporting responsibilities or titles as in
effect as of the date hereof;
(ii) his compensation is reduced; or
(iii) Company does not pay any material amount of compensation
due hereunder and then fails either to pay such amount within the
ten (10) day notice period required for termination hereunder or
to contest in good faith such notice. Further, if such contest is
not resolved within thirty (30) days, Company shall submit such
dispute to arbitration under Section 9.
(e) Failure to be re-elected or removal by shareholders. If at
anytime that this Agreement is in effect, the Company's voting
shareholders vote to remove Consultant from his position as Director
of the Company and/or if the Company has any vote to re-elect its
Directors and Consultant is not re-elected as a Director of the
Company by the Company's voting shareholders, Consultant's employment
hereunder this Agreement shall be terminated.
(f) By Mutual Agreement of the Parties. The Agreement may be
terminated by mutual agreement of the Parties.
12. Obligations of Company Upon Termination.
(a) In the event of the termination of Consultant's employment pursuant to
Section 11 (a), (b), (c), (d), (e), or (f), Consultant will be entitled only to
the compensation earned by him hereunder as of the date of such termination,
including stock that has been earned as of such date (plus life insurance or
disability benefits, if applicable).
13. Other Provisions.
(a) All notices and statements with respect to this Agreement must be in
writing. Notices to the Company shall be delivered to the Chairman of the Board
or any vice president of the Company. Notices to Consultant may be delivered to
Consultant in person or sent to Consultant's then-current mailing address as
indicated in the Company's records.
(b) This Agreement sets forth the entire agreement of the parties
concerning the subjects covered herein; there are no promises, understandings,
representations, or warranties of any kind concerning those subjects except as
expressly set forth in this Agreement.
(c) Any modification of this Agreement must be in writing and signed by all
parties; any attempt to modify this Agreement, orally or in writing, not
executed by all parties will be void.
(d) If any provision of this Agreement, or its application to anyone or
under any circumstances, is adjudicated to be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability will not affect any other
provision or application of this Agreement which can be given effect without the
invalid or unenforceable provision or application and will not invalidate or
render unenforceable such provision or application in any other jurisdiction.
(e) This Agreement will be governed and interpreted under the laws of the
United States of America and the laws of the State of Illinois as applied to
contracts made and carried out in Illinois by residents of Illinois.
(f) No failure on the part of any party to enforce any provisions of this
Agreement will act as a waiver of the right to enforce that provision.
(g) Section headings are for convenience only and shall not define or limit
the provisions of this Agreement.
(h) This Agreement may be executed in several counterparts, each of which
is an original. It shall not be necessary in making proof of this Agreement or
any counterpart hereof to produce or account for any of the other counterparts.
A copy of this Agreement signed by one party and faxed to another party shall be
deemed to have been executed and delivered by the signing party as though an
original. A photocopy of this Agreement shall be effective as an original for
all purposes.
[Remainder of page left intentionally blank.]
14. Summary of Terms of Employment
Effective Date December 19, 2005
Term & Commitment Twelve-Months, renewable
Position Director
Salary $2,000 per month
This Agreement contains provisions requiring binding arbitration of
disputes. By signing this Agreement, Consultant acknowledges that he (i) has
read and understood the entire Agreement; (ii) has received a copy of it (iii)
has had the opportunity to ask questions and consult counsel or other advisors
about its terms; and (iv) agrees to be bound by it.
Executed to be effective as of the Effective Date.
XA, INC., CONSULTANT:
---------- -----------
/s/ Xxxxxx Xxxxxx /s/ Xxxxx Xxxxxxx
-------------------------- --------------------------
XXXXXX XXXXXX XXXXX XXXXXXX
Chief Executive Officer
