EXHIBIT 10.77
CONSULTING AGREEMENT
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This Consulting Agreement (hereinafter "Agreement") dated as of June 1, 2005,
between XXXXXX XXXXXXXXXX, INC., a corporation organized and existing under the
laws of the State of Delaware (hereinafter "Corporation") and COSMIX, INC. 000
Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (hereinafter "Consultant"), and
Xxxxxxxxx X. Xxxxxxx (hereinafter "Purches"), the President of Consultant
residing at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000. Collectively
hereinafter referred to as "Parties".
WHEREAS, Corporation, Consultant and Purches are parties to a Consulting
Agreement extending through March 31, 2006 which is hereby terminated without
liability to either party.
WHEREAS, the parties wish to enter into a new Consulting Agreement under revised
terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual understanding set forth herein,
the Parties agree as follows:
1. Consultant's Duties: The Corporation hereby engages the Consultant as its
business and financial consultant. Subject at all times to the control
and direction of the Corporation's Chief Executive Officer, Chief
Operating Officer and Chief Financial Officer (hereinafter Management),
the Consultant shall have the duties as the general advisor and
consultant to Management on all matters pertaining to the business and to
render all other services relevant thereto. The Consultant, by Purches,
shall perform all other duties that may be reasonably assigned to it by
Management provided said duties be consistent with the prestige and
responsibility of Purches's position. The Consultant shall, through its
agents, servants and employees, devote its best efforts at all times
necessary to perform its duties and to advance the Corporation's best
interests, subject to reasonable vacations. The Consultant and the
Corporation acknowledge that the Consultant and its agents, servants and
employees have other business interests and shall not be required to
devote its exclusive time and attention to the performance of its duties
hereunder.
2. Term: Unless sooner terminated as provided in Section 7 below, this
Agreement shall be for a term of three (3) years and ten (10) months
commencing as of June 1, 2005 and ending on March 31, 2009; provided
however, that the term of this Agreement shall be automatically extended
on the same terms and conditions for a one year period and from year to
year thereafter unless either the Corporation or the Consultant shall
give written notice of the termination of this Agreement to the other at
least six (6) months prior to the expiration of said term or extended
term.
CONSULTING AGREEMENT
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3. Compensation: For all services rendered by the Consultant under this
Agreement, the Corporation shall pay to Consultant as compensation the
sum of $125,000 per annum, payable in equal bi-weekly installments of
$4,807.69.
4. Health and Life Insurance: The Corporation shall, at no cost to the
Consultant or Purches, provide Purches with full health insurance, basic,
major medical and dental as well as group life insurance. Said coverage
shall be identical to that afforded the Corporation's Management.
5. Expenses: Consultant will be reimbursed by the Corporation for all
reasonable business expenses incurred by the Consultant in the
performance of its duties. Said reimbursement shall be made no less
frequently than monthly upon submission by the Consultant of a written
request for same.
6. Stock Options (Warrants): There are no stock options (warrants) being
granted with this agreement. The rights of Purches with respect to any
stock option (warrant) previously granted to Purches shall be determined
exclusively by the plans and agreements relating to the options
(warrants) and this Agreement shall not affect, in any way the rights and
obligations of the plans and agreements.
7. Early Termination: The Corporation may terminate the Consultant's
relationship under this Agreement prior to the expiration of the term set
forth in Section 2 above only under the following circumstances:
(i) Death. Upon the death of Purches.
(ii) Disability. If, as a result of Purches's incapacity due to
physical or mental illness, Purches having been unable to perform
his duties under this Agreement for a period of six consecutive
calendar months, then thirty (30) days after written notice of
termination is given to Consultant (which may only be given after
the end of the six consecutive calendar month period) provided
that Purches has not returned to his duties under this Agreement.
(iii) Cause. For Cause. The Corporation shall have "Cause" to terminate
this Agreement upon
(a) the willful and continued failure by Consultant to
substantially perform its duties under this Agreement
(other than any failure resulting from Purches's incapacity
due to physical or mental illness) for thirty (30) days
after written demand for substantial performance is
delivered by the Corporation specifically identifying the
manner in which the Corporation believes Consultant has not
substantially performed its duties, or (b) the willful
engaging by Consultant or Purches in misconduct (including
embezzlement and criminal fraud) which is
CONSULTING AGREEMENT
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materially injurious to the Corporation, or (c) the
conviction of Purches of a felony. For purposes of this
paragraph, no act, or failure to act, by the Consultant
shall be considered "willful" unless done or omitted to be
done, by Consultant not in good faith and without
reasonable belief that its action or omission was in the
interest of the Corporation. Consultant shall not be deemed
to have been terminated for Cause unless and until there
shall have been delivered to Consultant a copy of a
resolution, duly adopted by the affirmative vote of a
majority of the entire membership of the Board of Directors
(Board) at a meeting of the Board called and held for such
purpose (after a reasonable notice to the Consultant and an
opportunity for Consultant, together with its counsel, to
be heard before the Board), finding that in the good faith
opinion of the Board, Consultant was guilty of conduct set
forth above and specifying the particulars of the conduct
in detail.
(iv) Termination by Consultant or Purches. Consultant or Purches may
terminate this Agreement (a) for Good Reason (as defined below) or
(b) Purches's health should become impaired to any extent that
makes the performance of his duties under this Agreement hazardous
to his physical or mental health or his life, provided that
Purches shall have furnished the Corporation with a written
statement from a qualified doctor to that effect and provided
further that at the Corporation's request and expense Purches
shall submit to an examination by a doctor selected by the
Corporation, and the doctor shall have concurred in the conclusion
of Purches's doctor. Consultant shall give the Corporation thirty
(30) days prior written notice of its intent to terminate this
agreement.
"Good Reason" means the Corporation has had a Change in Control.
For purposes of this Agreement, a Change in Control means the
occurrence of an event or series of events (whether or not
approved by the Board) by which any person or other entity or
group of persons or other entities acting in concert as determined
in accordance with Section 12 (d) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), whether or not
applicable, together with its or their affiliates or associates
shall, as a result of a tender offer or exchange offer, open
market purchases, privately negotiated purchases, merger or
otherwise (including pursuant to receipt of revocable proxies) (a)
be or become directly or indirectly the beneficial owner (within
the meaning of Rule 13d-3 and Rule 13d-5 under the Exchange Act,
whether or not applicable, except that a person shall be deemed to
have beneficial ownership of all securities that such person has
the right to acquire whether such right is exercisable immediately
or only after the passage of time) of more than (30) percent of
the combined voting power of the then outstanding common stock of
the Corporation or (b) otherwise have the ability to elect,
directly or indirectly, a majority of the Board.
CONSULTING AGREEMENT
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(v) Notice of Termination. Any termination of this Agreement shall be
communicated by written Notice of Termination to the other party
of this Agreement. "Notice of Termination" means a notice which
indicates the specific termination provision in this Agreement
relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for the termination of
the Consultant's retention under the provision so indicated.
(vi) Date of Termination. Date of termination means (a) if the
Agreement is terminated by Purches's death, the date of his death,
(b) if the Consultant's retention is terminated pursuant to
subsection 7(iii) (a) above, thirty (30) days after Notice of
Termination is given provided that Purches shall not have returned
to the performance of his duties during the thirty (30) day
period, (c) if the Consultant's retention is terminated pursuant
to subsection 7(iii) (c) above, the date specified in the Notice
of Termination after the expiration of any cure periods, and (d)
if the Consultant's retention is terminated for any other reason,
the date on which Notice of Termination is given.
8. Compensation Upon Termination or During Disability:
(i) Upon Purches's death, the Corporation shall pay to the person
designated by Consultant in a notice filed with the Corporation
or, if no person is designated, to Purches's estate as a lump sum
death benefit, Consultant's full compensation for a period of six
(6) months after the date of Purches's death. Upon full payment of
amounts required to be paid under this subsection, the Corporation
shall have no further obligation under this Agreement.
(ii) During any period that Purches fails to perform his duties under
this Agreement as a result of incapacity due to physical or mental
illness, Consultant shall continue to receive its full
compensation until the Consultant's relationship is terminated
pursuant to Section 7(ii) of this Agreement, or until Consultant
shall receive a lump sum of six months' compensation.
(iii) If the Consultant's retention is terminated for Cause as defined
in subsection 7(iii), the Corporation shall pay the Consultant its
compensation through the date of termination at the rate in effect
at the time Notice of Termination is delivered and the Corporation
shall have no further obligation to Consultant under this
Agreement.
CONSULTING AGREEMENT
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(iv) If (a) in breach of this Agreement, the Corporation shall
terminate the Consulting relationship other than pursuant to
Sections 7(iii) (b) or 7 (iii) (c) (it being understood that a
purported termination pursuant to Sections 7(iii) (b) or 7(iii)
(c) which is disputed and finally determined not to have been
proper shall be a termination by the Corporation in breach of this
Agreement), or (b) the Consultant shall terminate the relationship
for Good Reason, then
(1) The Corporation shall pay the Consultant its full
compensation through the date of termination at the rate
then in effect at the time Notice of Termination is given
through the end of the Term;
(2) In the event of a Change in Control as defined in Section
7(iv), the Corporation shall pay Consultant, in a lump sum,
an amount equal to the greater of (a) twice the amount then
due through the end of the Term; or (b) two times the
annual compensation paid to Consultant.
(3) In the event of a Change in Control of the Corporation as
defined in Section 7(iv) above, the total number of
outstanding unexercised options (warrants) granted to
Consultant under this Agreement as well as any previous
employment, consultant or other agreements, shall be
doubled in quantity while retaining the original exercise
price.
(4) The Corporation shall pay all reasonable legal fees and
expenses incurred by Consultant in contesting or disputing
any such termination or in seeking to obtain or enforce any
right or benefit in this Agreement.
(v) Unless the Consultant is terminated for Cause, the Corporation
shall maintain in full force and effect, for the continued benefit
of Consultant for the greater of the remaining term of this
Agreement or eighteen (18) months after termination of this
Agreement, all health and hospitalization plans and programs in
which Consultant was entitled to participate in immediately prior
to the Date of Termination as defined in Section 4 of this
Agreement, provided that Consultant's continued participation is
possible under the general terms and provisions of the plans and
programs. If Consultant's participation in any plan or program is
barred, the Corporation shall arrange to provide the Consultant
with benefits substantially similar to those which Consultant
would otherwise have been entitled to receive under the plan and
program from which his continued participation is barred.
CONSULTING AGREEMENT
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9. Savings Clause: The determination that any provision of this Agreement is
unenforceable shall not terminate this Agreement or otherwise affect the
other provisions of this Agreement, it being the intention of the parties
hereto that this Agreement shall be construed to permit the equitable
reformation of such provision to permit the enforcement thereof, if
possible, and otherwise to permit the enforcement of the remaining
provisions of this Agreement as if such unenforceable provision were not
included herein.
10. Equitable Relief: The parties hereto agree and declare that legal
remedies may be inadequate to enforce the provisions of this Agreement
and that equitable relief, including specific performance and injunctive
relief, may be used to enforce the provisions of this Agreement.
11. Notice: Any notice required or permitted to be given under this Agreement
shall be in writing and shall be deemed to have been given and received
on the date when personally delivered or deposited in the United States
Mail, registered postage prepaid, addressed:
a. if to the Corporation to: Xx. Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Inc. 0000 X.X. 00xx Xxxxxx Xxxx
Xxxxxxxxxx, XX 00000
b. if to the Consultant or Purches to: Xx. Xxxxxxxxx
Xxxxxxx 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, XX 00000
or to such other address as the Corporation or the Consultant may
designate in writing.
12. Amendments: This Agreement may be amended or modified only by a writing.
13. Governing Law: This Agreement shall be governed and construed under the
laws of the State of Florida.
14. Entire Agreement: This Agreement constitutes the entire Agreement between
the Consultant, Purches and the Corporation, with respect to its subject
matter, and all prior and other agreements between them, oral or written
concerning the same subject matter are merged into this Agreement and
thus extinguished.
15. Survival of Covenants: Any of the provisions in this Agreement which
would by their terms continue after the termination of this Agreement
shall be deemed to survive such termination.
16. Assignability and Binding Effect: This Agreement shall be binding upon
and inure to the benefit of the Corporation and its successors and
assigns. This Agreement may not be assigned by either party without the
written consent of the other party hereto.
CONSULTING AGREEMENT
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IN WITNESS WHEREOF, the parties have hereunto set their hands and seals as of
the date first written above.
XXXXXX XXXXXXXXXX, INC.
By: s/s Xxxx Xxxxxx
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Xxxx Xxxxxx, Chief Executive Officer
Consultant
COSMIX INC.
By: s/s Xxxxxxxxx X. Xxxxxxx
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Xxxxxxxxx X. Xxxxxxx, President
and Xxxxxxxxx X. Xxxxxxx
Individually
Attested to by:
s/s Xxxxx X. Xxxxxxxxxxx
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Xxxxx X. Xxxxxxxxxxx
COO, CFO, Executive Vice President
