CONSULTING AGREEMENT
THIS AGREEMENT, made and executed this 21st day of October,
2004, by and between XXXXXXXX CAPITAL CORPORATION, a New Jersey
corporation, having its principal office at 00 Xxxxxxx Xxxxxxx,
Xxxxxxx, Xxx Xxxxxx 00000 ("DCC"), and TELCO-TECHNOLOGY, INC., a
Delaware corporation having its principal office at 000 Xxxxxxxxxx
Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000 ("TTXI").
WHEREAS, DCC wishes to render consulting services to TTXI, and
TTXI wishes to engage DCC as a consultant, upon the terms and
conditions set forth herein.
NOW THEREFORE, in consideration of the mutual premises and
covenants herein set forth and for other good and valuable
consideration, the receipt of which by each of the parties hereto is
hereby acknowledged, it is agreed as follows:
1. ENGAGEMENT AS CONSULTANT. TTXI hereby retains DCC to render
financial and management advisory services to TTXI as the parties may
agree from time to time (the "DCC Services"). The DCC Services will
not be in connection with the offer or sale of securities, will not
include any direct or indirect capital-raising activities on behalf of
TTXI, and will not directly or indirectly promote or maintain a market
for TTXI's securities. DCC shall report directly to the President of
TTXI, and TTXI's Board of Directors.
2. TERM. The term of this Agreement shall commence as of the
date hereof, and shall continue in full force and effect for a period
of one (1) year thereafter.
3. CONSULTING FEES. DCC shall receive ONE HUNDRED NINETY FIVE
THOUSAND DOLLARS ($195,000) in TTXI common stock which stock shall be
registered on Form S-8 pursuant to the Securities Act, as amended, for
the DCC Services, payable in eight (8) monthly payments in advance, at
the rate of TWENTY FOUR THOUSAND THREE HUNDRED SEVENTY FIVE DOLLARS
($24,375) worth of TTXI common stock per month. The first monthly
payment of TTXI common stock shall be earned as of the date hereof, and
shall be payable within five (5) business days after the date hereof.
Subsequent monthly payments of TTXI common stock shall be earned as of
the dates that are monthly thereafter for seven (7) consecutive months
after the date hereof, and shall be payable within five (5) business
days of each such date. The date hereof and the dates that are seven
(7) consecutive months hereafter are referred to in this Agreement as
the "Effective Date(s) of Payment". The number of shares of registered
TTXI common stock issued for each such monthly payment shall be
determined by dividing the amount due by the average closing market
price of TTXI common stock for the thirty (30) trading days immediately
preceding the Effective Date of Payment. Such shares shall be issued
in the name of Xxxxxx XxXxxxxx, President and sole shareholder of DCC.
4. SET-OFF. If DCC shall be required to indemnify pursuant to
the provisions of that certain Share Purchase Agreement dated today by
and among Xxxxxx XxXxxxxx, DCC, TTXI, Greenspace Capital, L.L.C. and
Acutus Capital, L.L.C., (the "DM/DCC Share Purchase Agreement"), then
TTXI shall be entitled to an immediate right of set-off against any
amounts owed by TTXI to DCC as consulting compensation hereunder before
seeking any direct recovery from DCC by legal action. Such right of
set-off shall be exercised, if at all, only in accordance with the
following procedure:
(a) In the event that TTXI asserts that it is entitled to
indemnification pursuant to the provisions of the DM/DCC Share Purchase
Agreement hereof (other than a Third-Party Claim which DCC shall have
undertaken to defend or prosecute in accordance with Section 9.4 thereof),
then TTXI shall be entitled, in its discretion, to set off against monies or
property owed by TTXI a sum or value reasonably sufficient to cover the
amount asserted by TTXI to be subject to indemnification. In such
event, TTXI shall mail or deliver to DCC a written notice (the "Set-Off
Notice") of such claim specifying in reasonable detail the nature and
basis of such claim and the amount thereof and shall promptly respond
to any reasonable request for additional information regarding such
claim.
(b) If, within fifteen (15) days after receipt of the
Set-Off Notice, DCC responds with a notice of objection to the Set-Off Notice,
(the notice of objection being hereafter referred to as the "Objection Notice"),
then all parties shall negotiate in good faith to resolve the
indemnification claim.
(c) If the parties fail to resolve the indemnification
claim within fifteen (15) days after receipt of the Objection Notice, then
they shall submit to arbitration, pursuant to the Commercial Rules of the
American Arbitration Association, in northern New Jersey, and the arbitration
determination shall be final and binding upon the parties hereto. In
the event that either party's position is substantially confirmed as a
result of the arbitration proceedings, then the other party shall pay
the prevailing party's costs and expenses of arbitration, including
reasonable attorneys' fees and disbursements, within thirty (30) days
of the arbitration award. The issue of "substantial confirmation" of a
party's position shall be an arbitrable issue in the arbitration
proceedings.
(d) If, after setting off TTXI's claims, a deficiency
results, TTXI shall be entitled to recover the amount of such deficiency
directly from DCC, subject to the dollar limitations set forth in the DM/DCC
Share Purchase Agreement. The amount of any deficiencies determined in such
arbitration proceeding to be payable to TTXI by DCC shall be paid in
cash or by bank cashier's or certified check made payable to the order
of TTXI within fifteen (15) days following written demand therefor.
5. INDEPENDENT CONTRACTOR. It is expressly understood and
agreed that the services to be provided by DCC under this Agreement are
services rendered by it solely as an independent contractor and not as
an employee of TTXI. DCC shall not be authorized to create or assume
any liability or obligation of any kind for or on behalf of TTXI. As
an independent contractor, DCC shall remain fully responsible for
complying with all applicable federal and state laws and, more
specifically, for payment of all taxes or contributions which may be
payable based upon DCC's receipt of compensation hereunder, including,
but not limited to, federal and state income taxes, social security
taxes, unemployment compensation taxes, and any other applicable taxes
or business license fees. DCC further agrees to provide TTXI with
evidence of payment of such taxes upon TTXI's written request made in
connection with any state or federal audit in which DCC's status as an
independent contractor is questioned or disputed. DCC specifically
acknowledges that it is not entitled to participate in TTXI's benefit
plans, including TTXI's health insurance plans.
6. ASSIGNMENT. This Agreement shall not be assignable by DCC
without the prior written consent of XXXX.
0. ENTIRE AGREEMENT. This Agreement contains the entire
agreement and supersedes all prior agreements and understandings, oral
or written, with respect to the subject matter hereof. This Agreement
may be changed only by an agreement in writing signed by the party
against whom any waiver, change, amendment, modification or discharge
is sought.
8. GOVERNING LAW. This Agreement shall be governed for all
purposes by the laws of the State of New Jersey. If any provision of
this Agreement is declared invalid, such invalidity shall not affect
the other terms and provisions of this Agreement, which shall remain in
full force and effect.
9. CAPTIONS. The captions contained in this Agreement are for
reference purposes only and shall not in any way affect the meaning,
content or interpretation hereof.
10. NOTICES. Any notice required or permitted to be given
under this Agreement shall be sufficient if in writing and if sent by
certified or registered mail, to the parties at the following
addresses:
To TTXI:
Telco-Technology, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxx Xxxxxxx, President
With copies to:
Xxxx Xxxxxxx, LLC
The Atrium
East 00 Xxxxx 0
Xxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
To DCC:
Xxxxxxxx Capital Corporation
00 Xxxxxxx Xxxxxxx
Xxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxx XxXxxxxx
With copies to:
Xxxxx Xxxx, Esq.
Xxxxxx, Xxxx, Xxxxxx Xxxxx & Xxx, L.L.P.
00X Xxxxxxxx Xxxx
Xxxxxxx Xxxx, Xxx Xxxxxx 00000
Any notice required or permitted hereunder shall be effective
upon receipt.
11. AFFILIATED CORPORATIONS. Except when the context otherwise
requires, the term "TTXI" shall include TTXI's direct and indirect
wholly-owned subsidiaries, GreenWorks Corporation and Enviro-Sciences
(of Delaware), Inc.
IN WITNESS WHEREOF, each of the parties hereto has caused these
presents to be signed by its duly authorized president, its corporate
seal affixed hereto and attested by its Secretary, and has hereunto set
its hand and seal the day and year first above written.
ATTEST: TELCO-TECHNOLOGY, INC.
/s/ By: /s/ Xxxxx Xxxxxxx
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Secretary Xxxxx Xxxxxxx, President
ATTEST: XXXXXXXX CAPITAL CORPORATION
/s/ By: /s/ Xxxxxx XxXxxxxx
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Secretary Xxxxxx XxXxxxxx, President
