EXHIBIT 10.6
SERVICES AGREEMENT
THIS SERVICES AGREEMENT is entered into as of August 3, 2001 (the
"Effective Date"), by and among CDEX-Inc. Corp., a Nevada corporation (the
"COMPANY") and Xxxxxx Xxxxx (the "Consultant").
1. SERVICES AGREEMENT. Subject to the terms and conditions set forth in
this Agreement, the Company agrees to engage the Consultant to perform services
for the Company as set forth below.
2. TERM. The term of engagement under this Agreement shall be for two
years from the Effective Date (the "Engagement Period"), unless terminated
earlier as provided herein. This Agreement will be automatically renewed for
additional 12-month periods unless either the Consultant or the Company provides
advanced written notice, given at least sixty (60) days prior to the end of the
then-existing Engagement Period, of its intent not to renew. Any 12-month
renewal shall be considered part of the Engagement Period.
3. SERVICES OF THE CONSULTANT. Consultant shall serve as a Director of the
Company and devote his best efforts and attention in performing such services
for the Company as are consistent with the duties and responsibilities of the
title of Director. These include periodic meetings and teleconferences to
discuss business of the Company. These activities of the Consultant are
hereinafter called the "Services".
4. PLACE OF PERFORMANCE. The Consultant shall perform the Services at the
locations agreed upon by the Consultant and the Company.
5. CHARGES.
5.1. FEE.
5.1.1. During the Engagement Period, the Company shall pay to
the Consultant fees for the services of Consultants. The fee shall be $150.00
for each Director's Meeting. It is realized that this fee is not adequate for
the Services to be rendered. Accordingly, Consultant xxxx be awarded equity in
the Company, as noted below.
5.1.2. The fee shall be reviewed no less frequently than
annually and may be increased at the discretion of the Company. Except as
otherwise agreed to in writing by the Consultant, the fee shall not be reduced.
5.2. BONUS. The Consultant shall be eligible for an annual
performance bonus based on the performance of the Company and the contribution.
of the Consultant.
5.3. BENEFITS. Compensation provided is intended to include any and
all payments for benefits, if any, that will be provided to Consultant by the
Company.
In addition, the Company will use its best efforts to obtain coverage
for the Consultant under Directors and Officers liability insurance policy,
provided that such insurance policy is economically feasible.
5.4. VACATION; HOLIDAYS. The Consultant shall take holidays and
vacations at times that do not adversely impact the Company's work.
5.5 EQUITY PARTICIPATION,. It is recognized that the fees provided
will not adequately compensate the Consultant for the Services. Accordingly, the
Company and the Consultant have agreed that the Consultant shall be entitled to
receive a combined total of one hundred seventy five thousand (175,000) shares
of restricted common stock in the Company (THE "CONSULTANT STOCK") as part of
the compensation hereunder. Further, the Consultant Stock shall be subject to
graduated repayment provisions, as set forth below.
The parties understand that the Consultant Stock issued will be
restricted in some fashion. However, the intent is to remove those restrictions
as soon as legally possible and practicable. The Consultant agrees to comply
strictly with all such restrictions in connection with the receipt as well as
any disposition of such stock. The Consultant shall provide and deliver to the
Company all information, certifications, and other documentation as may be
requested by the Company as part of the Company's compliance with any applicable
laws and regulations relating to the issuance and/or registration of any of the
Company's stock, including but not limited to the Consultant Stock.
5.5.1. REPAYMENT. Consultant shall repay part of the shares of the
Consultant Stock received (or other equivalent shares of the Company stock) if,
at any time during the Engagement Period, the services of Consultant are
terminated by the Company for Cause (as that term is defined in Section 7.1.1)
or the Consultant elects to no longer provide substantial services to the
Company. In either event, then within sixty (60) days afterwards, the Consultant
shall repay to the Company a portion of the Consultant Stock in accordance with
the following schedule:
(a) if within the first year after the Effective Date, the Consultant shall
repay 75% of the Consultant Stock shares received;
(b) if on or after the first year but before the second year after the
Effective Date, the consultant shall repay 50% of the Consultant Stock
received;
6. EXPENSES. The Company shall reimburse the Consultant for reasonable and
authorized expenses incurred upon periodic presentation by the Consultant of an
itemized account of such expenses and appropriate receipts.
7. TERMINATION OF SERVICES.
7.1 TERMINATION OF SERVICES. An Consultant's service for the
Company during the Engagement Period will continue until the Consultant's
termination in accordance with this Section or termination by resignation. Upon
termination, this Agreement shall become null and void, except as otherwise
provided in Section 12.3.
7.1.1 TERMINATION FOR CAUSE. The Company may terminate the
Consultant for "CAUSE", as defined herein below, by providing a Notice of
Termination (as that term is defined hereinafter) to the Consultant.
For purposes of this Agreement, Cause shall be limited to any of the
following:
(i) Material breach of any provision of the Agreement or
Agreements referenced in Section 9;
(ii) The conviction of, or a plea of nolo contendere to, a
felony that materially damages the Company or its reputation;
(iii) The intentional fraud on, or willful misappropriation
of, funds or property
belonging to or claimed by the Company and exceeding $500.00 in an aggregate
amount;
(iv) Except in cases involving mental or physical
incapacity or disability, willful misconduct or gross negligence in connection
with the performance of duties that adversely impacts the Company;
(v) The chronic use of alcohol, drugs or other similar
substances affecting work performance;
7.2 TERMINATION UPON DISABILITY. If the Company determines in good
faith that the Consultant has a Disability as defined in this Section 7.2, the
Company may terminate that individual under this Agreement by notifying the
Consultant thereof at least thirty (30) days before the Date of Termination. Far
purposes of this Agreement, "Disability" means the inability to substantially
perform the Services by reason of any medically determined physical or mental
impairment that is or will be a permanent condition or is a condition that will
continue for at least three (3) months.
7.3 NOTICE OF TERMINATION. Any termination of Consultant by the
Company or the Consultant (other than because of death) shall be communicated by
written Notice of Termination to the other party hereto as noted below. For
purposes of this Agreement, a "NOTICE OF TERMINATION" shall mean a notice which
shall indicate the specific termination provision in this Agreement relied upon,
if any, and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination.
8. COMPENSATION UNON TERMINATION.
8.1. DEATH OR DISABILITV. If Consultant is terminated during the
Engagement Period as a result of death or disability, the Company shall pay to
the Consultant all fees and expenses owed to the Consultant as of the date of
death. In this event, there shall be no obligation to repay any of the
Consultant Stock upon the termination.
8.2. BY THE COMPANY FOR CAUSE. If the Company terminates Consultant
during the Engagement Period for Cause, the Company shall pay the Consultant alt
fees and expenses owed to the Consultant as of the date of termination. In
addition, Consultant shall be obligated to repay to the Company all except 15%
of the Consultant Stock.
8.3. BY THE COMPANY WITHOUT CAUSE. If the Company terminates
Consultant during the Engagement Period other than for Cause, Death, or
Disability, the Company shall pay Consultant all fees and expenses owed to
Consultant and Consultant shall have no obligation to repay to the Company any
of the Consultant Stock.
9. CDEX AGREEMENTS. As an express condition for the Company's
agreement to enter into this Agreement, and as a pre-condition to the
effectiveness of this Agreement, the Consultant and Company agree that each
,shall (i) keep the confidential and proprietary information and the
intellectual property of the Company confidential; (ii) assign to the Company
all of the ownership rights in and to any intellectual property relating to the
Company and its business that is developed, created, or discovered by Consultant
during the Engagement Period; and (iii) agree not to compete with the Company
anywhere in the world and its business or solicit the Company's customers,
vendors, or employees during the Engagement Period and for an additional period
of rive years. A breach of this provision shall be deemed a material breach of
this Agreement. To further provide for the implementation of this provision,
within twenty days from execution of this Agreement the Consultant agrees to
execute and deliver to the Company a CDEX Non-disclosure and Confidentiality
Agreement and a CDEX NonCompete and Non-
Solicitation Agreement, and the Consultants shall execute an Ownership and
Assignment of Intellectual Property Rights Agreement (collectively, the "CDEX
Agreements"), the terms and conditions of which are specifically incorporated
herein by reference.
10. INDEPENDENT CONTRACTOR OBLIGATIONS. It is expressly agreed
that the Consultant is acting as an independent contractor in performing the
Services. The Company shall carry no Workers' Compensation insurance or any
health or accident insurance to cover the Consultant or any of its employees or
contractors. The Consultant shall carry all such insurance as shall be required
by law and as it deems appropriate, and shall provide the Company with a copy of
each such insurance policy upon the request of the Company. The Company shall
not pay any contribution to Social Security, unemployment insurance, federal or
state withholding taxes, nor provide any other contributions or benefits which
might be expected to be paid by an employer in an employer-employee
relationship. The Consultant expressly agrees to report and to pay, on or before
the date due, any and all contributions for taxes, unemployment insurance,
Social Security, and other benefits for itself and its employees. Upon the
request of the Company, the Consultant shall provide evidence, satisfactory to
the Company, that all such tax and other payments required to be made by the
Consultant under this Section have been timely paid when and as due.
11. ARBITRATION. Any failure to perform, controversy or claim
arising out of or relating to this Agreement or the breach, termination or
validity thereof, shall be determined exclusively by arbitration in accordance
with the provisions of this Section and in accordance with the rules of the
American Arbitration Association for arbitrating commercial matters. The
arbitration shall be held in Washington, D.C., the surrounding metropolitan area
of Maryland, or such other location as the parties shall mutually agree. The
arbitrators shall base their award on applicable Maryland law and judicial
precedent, and shall accompany their award with written findings of fact and
conclusions of law. The decision of the arbitrators shall lie binding on the
parties, except that any party may appeal the arbitrators' decision by filing an
action to reconsider the decision of the arbitrators in a court having
jurisdiction hereunder. In any such action the arbitrators' findings of fact
shall be conclusive and binding on both parties and the sole questions to be
determined by the court shall be (i) whether or not the arbitrators' decision
was contrary to Maryland law and judicial precedent, and (ii) if the court
determines that the arbitrators' decision was contrary to Maryland law and
judicial precedent, then how the dispute shall be resolved based on the
arbitrators' findings of facts and Maryland law and judicial precedent. The
decision of the court as to the .resolution of the dispute under Maryland law
and judicial precedent shall supercede the arbitrators' decision. Judgment upon
the award rendered by the arbitrators, as modified by the court, if applicable,
may be entered in any court having jurisdiction in accordance herewith.
11.1 SELECTION OF ARBITRATORS. One arbitrator shall be selected by
the Company and one by the Consultant, and the arbitrators shall mutually select
another arbitrator to serve with them so that there shall be an odd number of
arbitrators. Alternatively, the parties may agree to accept a single arbitrator
to be mutually agreed upon by the parties. Each person serving as an arbitrator
hereunder shall be a professional with excellent academic and professional
credentials who has had experience as an arbitrator and at least ten years
experience in the field of resolving commercial disputes in the Washington
Metropolitan area.
11.2 DISCOVERY. Each party shall, upon the written request of the
other party, provide the other with copies of documents relevant to the issues
raised thereby. Other discovery may be ordered by the arbitrators to the extent
the arbitrators deem additional discovery appropriate, and any dispute regarding
discovery, including disputes as to the need therefor or the relevance or scope
thereof, shall be determined by the arbitrators, which determination shall be
conclusive.
11.3 EXPENSES. Each party shall pay its own expenses incurred in
any arbitration
proceeding, except as may be otherwise provided by the rules of the American
Arbitration Association.
11.4 CONFIDENTIALITY OF PROCEEDINGS. The arbitrators, expert
witnesses, stenographic reporters and any other third parties shall sign
appropriate nondisclosure agreements in the event that any confidential or
proprietary information is or may be disclosed in the arbitration proceedings.
12. MISCELLANEOUS.
12.1 NOTICES. All notices, demands, requests or other
communications required or permitted to be given or made hereunder shall be in
writing and shall be hand-delivered or shall be mailed by first class registered
or certified mail, postage prepaid to the respective addresses of the parties.
Notice shall be deemed to have been received either on the day delivered, if
hand delivered, or five (5) days after mailing, if mailed.
12.2 SEVERABILITV. The invalidity or unenforceability of any one or
more provisions of this Agreement shall not affect the validity or
enforceability of the other provisions of this Agreement, which shall remain in
full force and effect.
12.3 SURVIVAL. It is the express intention and agreement of the
parties hereto that the provisions of Section 8, Section 9, Section 10, and
Section 11 hereof shall survive the termination of this Agreement. In addition,
all obligations of the Company to make payments or distributions hereunder, and
all obligations to repay any shares of stock, if applicable, shall survive any
termination of this Agreement on the terms and conditions set forth herein.
12.4 ASSIGNMENT. The rights and obligations of the Consultant under
this Agreement shall not be assignable or delegable, except that with the prior
written consent of the Company.
12.5 BINDING EFFECT. Subject to any provisions hereof restricting
assignment, this Agreement shall be binding upon the parties hereto and shall
inure to the benefit of the parties and their respective heirs, devisees,
executors, administrators, legal representatives, successors and assigns.
12.6 AMENDMENT- WAIVER. This Agreement shall not be amended,
altered or modified except by an instrument in writing duly executed by the
parties hereto. Neither the waiver by any of the parties hereto of a breach of
or a default under any of the provisions of this Agreement, nor the failure of
any of the parties, on one or more occasions, to enforce any of the provisions
of this Agreement or to exercise any right or privilege hereunder, shall
thereafter be construed as a waiver of any subsequent breach or default of a
similar nature, or as a waiver of any such provisions, rights or privileges
hereunder.
12.7 HEADINGS. Section and subsection headings contained in this
Agreement are inserted for convenience of reference only, shall not be deemed to
be a part of this Agreement for any purpose, and shall not in any way define or
affect the meaning, construction or scope of any of the provisions hereof.
12.8 GOVERNING LAW. This Agreement, the rights and obligations of
the parties hereto, and any claims or disputes relating thereto, shall be
governed by and construed in accordance with the laws of the State of Maryland
(but not including the choice of law rules thereof). Subject to the arbitration
provisions herein, any action filed in relation to this Agreement and the
performance of the parties hereunder shall be filed in the appropriate state
court or the U.S. District Court having jurisdiction over Rockville, Maryland,
the parties hereto waiving any other venue to which they may be entitled by
virtue of domicile or otherwise. Each of the parties hereto waives a trial by
jury in regard to any claims or disputes relating to this Agreement.
12.9 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties respecting the engagement of the Consultant, there
being no representations, warranties or commitments except as set forth herein.
12.10 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be an original and all of which shall be
deemed to constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement,
or have caused this Agreement to be duly executed on their behalf effective as
of the day and year first hereinabove written.
By: /s/ Xxxxxx Xxxxx By: /s/ Xxxx X. Xxxxx
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Xxxxxx Xxxxx Xxxx X. Xxxxx
CDEX Inc. Corp.
Director
ADDENDUM TO SERVICES AGREEMENT
Whereas, a Services Agreement was entered into as of August 3, 2001
("Services Agreement") by and between CDEx-Inc. Corp., a Nevada, corporation
(the "Company") and Xxxxxx Xxxxx (the "Consultant"),
Whereas, that Services Agreement called for Consultant to serve as a
Director of the Company and had a term of service of two years with automatic
twelve-month renewal periods unless otherwise terminated;
Whereas, that Services Agreement provided for compensation for
Consultant in the form of stock in the Company and a small additional cash
amount for each Board of Director's Meeting;
Whereas, the Company desires to maintain the services of Consultant as
a Director and expand those services to provide marketing and strategic advice,
as called upon, far an additional two years without significant expenditure of
cash, and
Whereas, Consultant seeks to provide those services with compensation
in the form of Stock of the Company.
Accordingly, for good and valuable consideration the sufficiency of
which is recognized and acknowledged by both parties, the Company and Consultant
agree to the provision of this Addendum to the Services Agreement ("Addendum"),
as follows:
1. Consultant agrees to perform the aforementioned services for
an additional two years beginning July 1, 2003 (the "Effective Date").
2. Company agrees to pay Consultant an additional forty five
thousand (45,000) shares of Class A Common Stock for those services, with
restrictions and repayment provisions noted below ("Purchased Shares"), The
Purchased Shares shall not be 100% vested until (i) the Purchased Shares becomes
subject to an effective registration. statement filed under the Securities Act
of 1933, as amended, tend is tradable on an open market pursuant to that
registration or (2) there is a change its control of the Company such that the
Purchased Shares are exchanged for stock in the new company that can be traded
on an open market. (Legends shall be placed on the stock certificate reflecting
these restrictions.)
The Consultant understands and acknowledges that the offering arid sale
of the Purchased Shares pursuant to this Addendum, is intended to be exempt from
registration under the Securities Act, arid from qualification under any
applicable state securities law by virtue of Section 4(2) of the Securities Act
and Rule 306 of Regulation D thereunder, on the ground, among others, that no
distribution or public offering of Purchased Shares is to be effected and the
Purchased Shares will be issued by the Company in connection with a transaction
that does not involve any public offering within the meaning of Section 4(2) of
the Securities Act, the rules and regulations of the United States Securities
and Exchange Commission thereunder, or any comparable provision of applicable
securities laws or the rules and regulations of the regulatory authorities
thereunder.
Further, the Consultant will acquire the Purchased Shares for
investment for his account and not for the account of any otter poison, and not
with a view toward resale or other distribution thereof The Consultant
understands that the Purchased Shares have not been registered under the Semites
Act and applicable United States state securities laws and, therefore, cannot be
resold unless they are subsequently registered under the Securities Act and
applicable United States state securities laws of unless exemption from such
registered is available. The Consultant further understands and agrees that,
until so registered or transferred pursuant to the provisions of Rule 144 under
the Securities 144, the certificate(s) for the Purchased Shares shall bear a
legend, prominently stamped or printed thereon, reading substantially as
follows:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER. THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR APPLICABLE STATE SECURITIES LAWS THESE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT
WITH A VIEW TO THEIR DISTRIBUTION OR RESALE, AND MAY
NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT
AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH
SECURITIES UNDER THE SECURITIES ACT AND APPLICABLE
STATE SECURITIES LAWS, OR. ACT OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY TO THE EFFECT THAT SUCH
REGISTRATION IS NOT REQUIRED.
The Consultant underxtands and agrees that it is the Companys intent to
take action to authorize all of the Company's issued stock., including the
Purchased Shares, to be tradable on an open market.
Consultant understands and agrees, however, that such sections may not be
successful and, that Rule 144 nay not be available as a basis for exemption from
registration.
The Consultant, during the course of this transaction and prior to the
execution of this Addendum, has had the opportunity to oak questions of and
receive answers from representatives of the Company concerning the terms and
conditions of the Addendum, and to obtain any additional information or
documents relative to the Company, its business and an investment, as the
Consultant has deemed necessary. The Consultant agrees arid acknowledges,
however, that it has not been furnish any offering literature or prospectus
concerning the Company other than this Addendum and, in making its decision to
acquire the Purchased Shares hereunder, the Consultant has relied solely upon
this Addendum and independent investigations made by the Consultant, The
Consultant acknowledges that no representations or warranties have been made to
the Consultarnt by the Company, or any offcer, employee, agent or affiliate of
the Company, except as contained in this Addendum.
The Consultant understands and acknowledges that the offering and sale
of the Purchased Shares pursuant to this Addendum is intended to be exempt form
registration under the Securities Act, and from qualification under any
applicable state securities law by virtue of Section 4(2) of the Securities Act
and Rule 506 of Regulation D thereunder, nn the ground, among others, that no
distribution or public offering of Purchased Shares is to be; effected and the
Purchased Shares will be issued by the Company in connection with a transaction
that does not involve any public offering within the meaning of Section 4(2) of
the Securities Act, the rules and regulations of the United States Securities
and Exchange Commission thereunder, or any comparable provision of applicable
securities laws or the rules and regulations of the regulatory authorities
thereunder.
The Consultant is member of the Board of Directors of the Company, is
sophisticated in financial matters and is able to evaluate the risks and
benefits of the investment in Purchased Shares. The Consultant understands that
his investment in the Purchased Shares is a speculative investment that involves
a high degree of risk. The Consultant can bear tire economic risks of this
investment and can afford a complete loss of his investment in the Purchased
Shares. The Consultant is a resident of the State of New Mexico.
The Consultant understands and acknowledges that the Purchased Shares
are "restricted securities" under United States securities laws and any
purported transfer of the Purchased Shares in violation of applicable law is
null and void. The Consultant understands and acknowledges that the Company may,
at its discretion, refuse to register on its share transfer books any purported
transferee of the Purchased Shares in the event of an attempted transfer thereof
in violation of applicable law.
Consultant shall repay part of the shares of the Purchased Shares
received (or other equivalent shares of the Company stock) it at any time during
the first two years beginning as of the Effective Date of this Addendum, the
services of Consultant are terminated by the Company for Cause (as that term is
defined in Section 7.1.1 of the Services Agreement) or the Consultant elects to
no longer provide substantial services to the Company. In either event, then
within sixty (50) days afterwards, the Consultant shall repay to the Company a
portion of the Consultant Stock in accordance with the following schedule:
(a) if termination occurs during the. first year after
the Effective Date, the Consultant shall repay 75% of
the Purchased Shares received; and
(b) if termination occurs during the second year after
the Effective Date, the Consultant shall repay 50% of
the Purchased Shares received.
3. Consultant and the Company Agreement that this terms and conditions of
the Services Agreement continue to be in full force and effect during the term
of this Addendum and am tirade apart of this Addendum by consent of both
parties.
4. This Addendum may be executed in two or more counterparts, each of
which shall be an original and all of which shall be deemed to constitute one
arid the same instrument.
IN WITNESS WHEREOF, the undersigned have duly executed this Addendum,
or have caused this Addendum to be duly executed on: their behalf as of the
Effective Date 'teen above.
By: /s/ Xxxxxx Xxxxx By: /s/ Xxxxxxx X. Xxxxxxx, Xx.
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Xxxxxx Xxxxx Xxxxxxx X. Xxxxxxx, Xx.
CDEX Inc.
CEO and Chairman
