AGREEMENT FOR CONSULTING SERVICES
Exhibit 10.6
Consulting Agreement between Skye and Digital Crossing, LLC
AGREEMENT
FOR
CONSULTING SERVICES
THIS
AGREEMENT is made and entered into as of this 1st
day of
February, 2004, by and between DIGITAL
CROSSING, LLC, (hereinafter
referred to as “Consultant”) and
TANKLESS SYSTEMS WORLDWIDE, INC., a
Nevada
corporation (“Company”).
WHEREAS,
Consultant has certain expertise in managerial, finance and business matters
that would be beneficial to Company’s business. Consultant is familiar with the
Company, its proposed business plans, and its strategy for raising capital.
In
consideration of the Consultant’s engagement by the Company, of the mutual
covenants contained herein, the mutual reliance of the parties thereon and
the
mutual benefits to be derived therefrom, including, but not limited to, the
enhancement of the Company’s ability to raise capital, solicit investors, sell
product, provide sales training to distributors and increase the value of its
stock (of which the Consultant may be a shareholder) and to generally conduct
its business, the parties hereto hereby agrees as follows.
1. Engagement.
Consultant is hereby retained as a consultant by Company. Consultant will
perform services in connection with (i) the evaluation of potential business
opportunities for Company, (ii) the business operations and management of
Company, (iii) the development of business strategies for Company, and
(iv) raising public and private capital for the Company (the services
identified in foregoing clauses (i) through (iv) are hereinafter collectively
referred to as the “Consulting Services”), as well as other similar and related
services which may be specifically assigned from time to time. Consultant’s
performance will be reviewed periodically by the Company to ensure that the
provisions of this Agreement are being fulfilled and that the activities
undertaken in the course of the assignment are consistent with this Agreement
and the policies of the Company. Consultant shall
devote only such time to the business of the Company as shall be necessary
for
the efficient operation of the Company's business during the Term hereof;
provided,
however, nothing in this agreement shall be construed as requiring the services
of Consultant full time.
Consultant
will undertake such services under the direction of the CEO or the Board of
Directors of the Company. The failure of the Company to use Consultant’s
services shall not be a reason to cancel this agreement and Company understands
that Consultant is blocking time for the Company and will be unable to recapture
the value of this time should Company not use this blocked time.
2. Performance.
The
Company agrees that the services to be furnished by Consultant hereunder shall
be performed by such persons as determined by Consultant unless the Company
shall otherwise stipulate in writing and Consultant agrees that the execution
of
this Agreement shall obligate both Consultant and its representatives personally
with regard to Paragraphs 8 through 15 hereof.
3. Good
Faith Performance; Policies and Procedures.
Consultant agrees to act diligently, efficiently and in good faith in the
performance of the services to be furnished pursuant to this Agreement, and
shall continue to observe a duty of loyalty to the Company and its affiliates
in
relation to all communications with employees, customers, clients and other
business contacts and business relations of the Company. All services, work
and
work product shall be professional in quality and responsive to the mandate
of
this Agreement and the needs of the Company. Consultant agrees to adhere
strictly to the policies, codes and standards of the Company, as amended from
time to time, while doing business under this Agreement.
4. Term.
The
term of this Agreement shall be for a period of one year commencing on the
effective date hereof, as set forth above and ending on the first anniversary
thereof (the “Term”).
5. Compensation.
In
consideration for the services to be provided by Consultant by this Agreement,
and as full and complete compensation therefore, the Company will pay Consultant
as follows:
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(a) The
Company will pay to Consultant a monthly fee in the amount of $3,500.00, payable
semi-monthly, in arrears, on the 15th
and last
day of each month during the Term of this Agreement commencing February 15,
2004
(for the period February 1 through February 15). Any partial month shall be
pro-rated and the payment next due shall reflect such proration.
(b) The
Company will pay to Consultant an additional fee (“Additional Fee”) in the form
of stock. The Additional Fee shall be payable through the issuance of shares
of
common stock, $0.001 par value, of the Company, restricted pursuant to the
provisions of Rule 144 of the Securities Act of 1933 (the “Shares”), as
follows:
(i) One
Hundred Twenty Thousand (120,000) Shares shall be issued upon execution of
this
Agreement. These Shares shall be fully earned, 1/12 each month during the term
of this Agreement. The original certificate evidencing these Shares shall bear
a
legend acknowledging the vesting terms. The holder of the certificate may,
from
time to time, tender such certificate to the Transfer Agent of the Company
to
have those shares that have theretofore vested, removed from such restriction.
In the event of a termination of this Agreement for whatever reason or no reason
at all, the unvested portion of such Shares shall immediately vest in payment
of
liquidated damages and no portion thereof shall thereafter be subject to refund
or return to the Company;
(ii) One
Hundred Thousand (100,000) Shares shall be issued to Consultant at such time
as
the Company shall have secured the next round of financing in an amount not
less
than $1,500,000 gross, it being understood that such financing may occur in
one
or a series of transactions or offerings; and
(iii) One
Hundred Thousand (100,000) Shares shall be issued to Consultant at such time
as
the Company, or one of its subsidiaries, shall have commenced the marketing
or
licensing of one or more products based on new technology derived from research
and development undertaken by the Company, or its affiliates, directly or
through contracts with Alliance Engineered Systems and/or others;
and
(c) In
addition to the foregoing, the Company agrees to grant to Consultant an option
to purchase 300,000 Shares of the Company’s common stock, $0.001 par value,
restricted pursuant to the provisions of Rule 144 of the Securities Act of
1933
(the “Option Shares”), pursuant to the terms and conditions of the Option
Agreement attached hereto as Exhibit “A” incorporated herein by reference for
all purposes.
(d) All
Shares issued in satisfaction of the Additional Fee shall be deemed to have
a
stated fair market value of $0.05 per share (which price was not arbitrarily
determined, and takes into consideration the current price of the Company’s free
trading shares and the restrictions placed on the shares issued or to be issued
in payment of the Additional Fee, the financial condition of the Company and
its
operations at the time of execution of this Agreement, and the fact that the
public market for such stock has been substantially illiquid for some time
and
subject to dramatic changes based on volume). When issued and delivered to
Consultant as payment for services rendered as provided by this Agreement,
the
Shares will be validly issued, fully paid and non-assessable, and the issuance
of such Shares will not be subject to any preemptive or similar
rights.
(e) Consultant
reserves the right to designate, in writing, specific individuals in whose
names
the Shares and Additional Shares are to be issued and the addresses to which
the
certificates evidencing such shares are to be sent.
(f) In
the
event of termination of this Agreement at the end of the Term hereof or for
any
reason or no reason whatsoever, upon the occurrence of such event, the
Additional Fee shall be deemed fully earned and payable and all Shares not
theretofore issued, as provided herein, including those Shares provided for
in
subparagraphs (ii) and (iii) of paragraph 5(b) above, shall be immediately
issued to Consultant.
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(g) If
at any
time during the period from the date hereof until such time as the restrictions
imposed by Rule 144 of the Securities Act of 1933 with respect to any Shares
issued pursuant hereto shall have expired, the Company files a registration
with
the SEC on Form S8 for the issuance of free-trading shares to directors,
officers, employees and consultants of the Company, then, in such event, the
holder of the Shares issued or to be issued to Consultant pursuant to this
Agreement shall have the right, prior to the issuance of any other shares
pursuant to such registration, to exchange such Shares for free-trading shares
issued pursuant to such registration.
6. Piggy-Back
Registration Rights. The
Company does not have any present intention and is under no obligation to
register the Shares under the Securities and Exchange Act of 1933 or applicable
state securities laws. Nonetheless, the Company hereby gives the Consultant
unlimited Piggy-Back Registration Rights under this Agreement. If at any time
the Company proposes to file with the SEC a Registration Statement relating
to
an offering for its own account or the account of others under the 1933 Act
of
any of its securities (other than on Form S-4 or Form S-8 or their then
equivalents relating to securities to be issued solely in connection with any
acquisition of any entity or business or equity securities issuable in
connection with stock option or other employee benefit plans) the Company shall
promptly send to Consultant written notice of the Company’s intention to file a
Registration Statement and of Consultant’s rights under this Section 6 and, if
within twenty (20) days after receipt of such notice, Consultant shall so
request in writing, the Company shall include in such Registration Statement
all
or any part of the Registrable Securities Consultant requests to be registered.
No right to registration of Registrable Securities under this Section 6 shall
be
construed to limit any registration. If an offering in connection with which
Consultant is entitled to registration under this Section 6 is an underwritten
offering, then Consultant whose Registrable Securities are included in such
Registration Statement shall, unless otherwise agreed by the Company, offer
and
sell such Registrable Securities in an underwritten offering using the same
underwriter or underwriters and, subject to the provisions of this Agreement,
on
the same terms and conditions as other shares of Common Stock included in such
underwritten offering. For purposes of this Section 6, the term “Registrable
Securities” shall include any Shares or Option Shares issued or to be issued
pursuant to this Agreement or otherwise held by Consultant.
7. Reimbursement
of Expenses.
The
Company will reimburse Consultant for all reasonable out-of-pocket expenses,
such as transportation, hotels, meals, on-line data base fees and telephone,
necessarily incurred by Consultant in connection with Consultant’s duties for
any trip made at our request. The Company will reimburse Consultant for any
other payments made by Consultant to third parties only when authorized in
advance by the Company. Reimbursement of expenses will be made only in response
to itemized invoices satisfactory to the Company together with receipts and
other supporting documentation (all of which are subject to substantiation
to
and verification by the Company, in its reasonable discretion) in the name
of
the Consultant and submitted by Consultant to the Company.
8. Status
of Consultant.
Consultant is and shall continue to be an independent contractor and
nothing
contained in this Agreement is intended to give rise to nor shall be construed
to give rise to or create an employer/employee relationship, a partner-ship,
joint venture or business trust arrangement between the Company, on the one
hand, and the Consultant, on the other hand.
9. Company
Indemnity to Consultant.
Company
will indemnify, defend with counsel of Consultant’s choice, and hold harmless
the Consultant, its affiliates, directors, officers, employees, agents and
representatives, against all losses, claims, liabilities, damages and expenses,
including attorney’s fees, incurred by or demanded from the Consultant, directly
or indirectly arising out of or resulting from (i) any act or omission made
by
Company or Company’s employees, agents or subcontractors related to services
performed for the Consultant hereunder which is negligent or which constitutes
a
breach of any of the terms of this Agreement, or (ii) any untrue or inaccurate
representation made in this Agreement or in connection with Consultants
engagement hereunder. Notwithstanding any other provision of this Agreement
to
the contrary, the representations and obligations of the Company in this
Paragraph shall survive the termination or completion of this
Agreement.
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10. Consultant
Indemnity to Company.
Consultant will indemnify, defend with counsel of Company’s choice, and hold
harmless the Company, its affiliates, directors, officers, employees, agents
and
representatives, against all losses, claims, liabilities, damages and expenses,
including attorney’s fees, incurred by or demanded from the Company, directly or
indirectly arising out of or resulting from (i) any act or omission made by
Consultant or Consultant’s employees, agents or subcontractors related to
services performed for the Company hereunder which is negligent or which
constitutes a breach of any of the terms of this Agreement, or (ii) any untrue
or inaccurate representation made in this Agreement. Notwithstanding any other
provision of this Agreement to the contrary, the representations and obligations
of the Consultant in this Paragraph shall survive the termination or completion
of this Agreement.
11. Disclosure
of Inventions, etc.
The
Consultant shall promptly disclose to the Company, in writing and form
satisfactory to the Board of Directors thereof: all discoveries, developments,
improvements and innovations, whether or not patentable, (hereinafter referred
to as “Inventions”) conceived, developed, created, made or reduced to practice
by the Consultant during the term hereof, which are in any way related to the
business of the Company and whether conceived or made during regular working
hours or any other time. The Consultant shall likewise disclose to the Company
any such Inventions conceived or made by others which may be of benefit to
the
Company, the knowledge of which the Consultant obtained during the term
hereof.
12. Assignment
of Inventions, etc.
The
Consultant hereby assigns, transfers and conveys all of his rights, title and
interest to or in any and all such Inventions to the Company. The Consultant
further agrees to execute such documents and to perform such other actions
and
activities, at the expense of the Company, as may be necessary or desirable
as
determined by the Company’s Board of Directors thereof: (i) for the filing of
patent applications and issuance of patents (both domestic and foreign) for
such
Inventions; and (ii) to complete exclusive ownership by the Company of such
Inventions and patent applications and patents. It is mutually understood and
agreed that the term “Inventions” as used herein shall be construed to include
all forms of intellectual property and the term “patent” as used herein shall be
interpreted to include all forms of intellectual property protection, including,
without limitation, patents, copyrights, international copyrights and literary
property.
13. Confidentiality
and Non-Disclosure.
Consultant understands and acknowledges that the Company and its affiliates
have
developed and rely on contacts, confidential information and trade secrets
relating to the business and affairs of the Company and its affiliates and
that
such information is the sole and exclusive property of the Company
(“Confidential Information”). The foregoing Confidential Information includes
matters known to the Company and its Affiliates prior to the date of this
Agreement as well as matters newly acquired by the Company and its affiliates
during the term of this Agreement. The Consultant agrees to hold all such
Inventions, and Confidential Information as Trade Secrets and proprietary
information of the Company and further warrants never to use any such
Inventions, Confidential Information to compete with or against the Company
either during the term of this Agreement or at any time thereafter. Consultant
shall hold in confidence, not use, except for the benefit of the Company, and
not disclose to anyone without prior written authorization by the Company,
any
and all Confidential Information, written, oral or otherwise, relating to the
Inventions or the business or operations of the Company, or its clients or
customers, including, without limitation, scientific or technical information,
market or marketing information, personal contacts, designs, processes,
procedures, formulas or improvements which Consultant may obtain prior to,
during or subsequent to the term of this Agreement. The Consultant further
agrees to hold and use articles representing or disclosing said Inventions
and
information only in such manner as would benefit and protect the Company
including holding such information in confidence until the release thereof
is
authorized by the Company’s Board of Directors. Consultant shall deliver or
return to the Company, upon its request, all information in tangible form which
Consultant received from the Company including all copies thereof. The
Consultant further warrants that during the term hereof he will maintain full
fidelity to the stockholders of the Company and guard and protect the interests
thereof with the same prudence and diligence as he would his own. Title in
any
information or data received from the Company, including all copies thereof,
shall be in and remain with the Company at all times. Except as otherwise
expressly provided herein, the provisions of this Paragraph shall be effective
and remain in full force and effect for a period of five (5) years following
the
termination of this Agreement.
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14. Disclosure
to Media.
Consultant agrees not to advertise or make any public announcements to the
media
or to others regarding the existence of this Agreement or the performance
hereunder without the prior written approval of the Company.
15. Injunctive
Relief.
The
Consultant agrees that the breach by him of any of the foregoing covenants
contained in paragraphs 8 through 12 hereof is likely to result in irreparable
harm, directly or indirectly, to the Company and therefore the Consultant
consents and agrees that if he violates any of such obligations, the Company
shall be entitled, among and in addition to any other rights or remedies
available hereunder or otherwise, to temporary and permanent injunctive relief
to prevent the Consultant from committing or continuing a breach of such
obligations.
16. Severability,
Reformation.
It is
the desire, intent and agreement of the parties hereto that the restrictions
placed upon the Consultant by paragraphs 8 through 13 hereof shall be enforced
to the fullest extent permissible under the law and public policy applied by
any
jurisdiction in which enforcement is sought. Accordingly, if, and to the extent
that, any portion of the covenants contained in these paragraphs shall be
adjudicated to be unenforceable, such portion shall be deemed amended to delete
therefrom or to reform the portion thus adjudicated to be invalid or
unenforceable, such deletion or reformation to apply only with respect to the
operation of such portion in the particular jurisdiction in which such
adjudication is sought.
17. Attorney’s
Fees, etc.
If it
shall be necessary for either party to place this Agreement in the hands of
an
attorney at law for enforcement of any of the provisions hereof, the
non-prevailing party in such matter shall be liable to the prevailing party
for
all costs, expenses and reasonable attorney’s fees incurred in connection
therewith, irrespective of whether suit shall be commenced. The costs, expenses
and attorney’s fees shall include, but not be limited to, costs, expenses and
attorney’s fees incurred on appeal or in administrative
proceedings.
18. No
Withholding of Taxes.
By
reason of the independent status of Consultant, the Company is not required
to
and will not withhold federal, state or local income or any other tax from
any
payment to Consultant under this Agreement and may file information returns
with
the United States Internal Revenue Service or similar state or local agencies
regarding such payments under conditions imposed by applicable law or
regulations.
19. Notices.
Any
notices or communications hereunder must be in writing, delivered in person
or
transmitted by Registered or Certified United States Mail, postage prepaid,
return receipt requested, addressed as follows, unless such address is changed
by written notice:
| If to Company: | Tankless Systems Worldwide,Inc.
0000
X. Xxxxx Xx., Xxxxx X
Xxxxxxxxxx,
Xx 00000
|
||
| If to the Consultant: |
Digital
Crossing, LLC
0000
Xxxxxx Xxxxx
Xxxxxxx,
Xxxxxxx,
Xxxxxx
X0X 0X0
|
20. Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of Arizona.
21. Restriction
on Assignment.
This
Agreement requires the personal services of Consultant and Consultant may not
assign performance hereunder to any other person except when specifically
approved in writing by the Company. In such cases, the name, address, telephone
number, social security number or employer identification number, and other
identifying information shall be furnished to the Company. Consultant will
require that any of its employees who provide services to the Company pursuant
to this Agreement will execute a certification embodying the terms of this
Agreement.
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22. Successors
and Assigns.
This
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective successors and assigns.
23. Entire
Agreement.
This
Agreement contains the entire agreement between the parties hereto and
supersedes any prior understandings, commitments, or agreements, written or
oral, with respect to the subject hereof. This Agreement shall not be modified,
varied or amended except by written instrument of subsequent date duly executed
by an authorized representative of each party. If any provision of this
Agreement is found invalid, unenforceable, or illegal by any court of competent
jurisdiction, any such finding shall not affect the validity of the remaining
provisions which shall remain in full force and effect.
24. This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed an original but all of which shall constitute one and the same
instrument.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement in multiple
counterparts effective as of the date first written above.
|
TANKLESS
SYSTEMS
WORLDWIDE, INC.
a Nevada corporation
|
DIGITAL CROSSING, LLC, | ||
| /s/ Xxxxxx Xxxxxxxx | /s/ Xxxxxxx X. Xxxx | ||
|
|
|
||
| Name
Xxxxxx
Xxxxxxxx Title CEO |
Name
Xxxxxxx X.
Xxxx Title Manager |
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STOCK
OPTION AGREEMENT
THIS
STOCK OPTION AGREEMENT (this "Agreement"), dated as of February ___, 2004,
(the
"Grant Date"), is between Tankless Systems Worldwide, Inc., a Nevada corporation
(the "Company"), and Digital Crossing, LLC (the "Grantee").
1.
Grant
of Option, Exercise Price and Term.
(a) The
Company irrevocably grants to the Grantee and Grantee is entitled, subject
to
the terms and conditions set forth in this Stock Option Agreement (the "Option")
to purchase Three Hundred Thousand (300,000) fully paid, duly authorized
and
nonassessable shares of common stock, $0.001 par value per share, of the
Company
(the "Option Shares") from the Company, at any time commencing from the date
hereof and continuing for five (5) years from the date hereof, (the “Exercise
Period”) at an exercise price of Fifty cents ($0.50 U.S.) per Share (the
“Exercise Price”), subject to adjustment pursuant to Section 8
hereof
(b) The
term
of this Option shall be a period of five (5) years from the Grant Date (the
"Option Period"). During the Option Period, the Option shall be fully
vested.
(c) The
Option shall be fully exercisable as of the Grant Date.
(d) The
Company shall not be required to issue any fractional shares of Stock.
2. Method
of Exercise.
Subject
to the provisions of this Section, the Stock Options may be exercised, in
whole
or in part, at any time during the option term by giving written notice of
exercise to the Company, in form satisfactory to the Company, specifying
the
number of shares of Stock subject to the Stock Option to be purchased and
the
aggregate Exercise Price for such shares, together with payment in full of
such
aggregate Exercise Price. The Exercise Price of any Stock Option shall be
paid
in full in cash (by cash, certified or bank check, wire transfer, or any
combination thereof, or such other instrument as the Company may accept).
The
Option may not be exercised unless the Grantee (a) enters into any document
(a
"Private Issuance Document") the Company determines necessary to ensure that
the
Option Shares are issued pursuant to an available exemption from the
registration requirements of the Securities Act of 1933, as amended (the
"Securities Act"), and applicable state securities laws, and (b) there has
been
compliance with all the preceding provisions of this Section 2. For all purposes
of this Stock Option Agreement, the date of the exercise of the Option shall
be
the date upon which there is compliance with all such requirements.
3. Common
Stock to be Issued. Subject
to the terms of this Option Agreement, upon notice of exercise any portion
of
the Option and payment of such Exercise Price as aforesaid, the Company shall
promptly issue and cause to be delivered to the Grantee or to such person
or
persons as the Grantee may designate in writing, a certificate or certificates
(in such name or names as the Grantee may designate in writing) for the number
of duly authorized, fully paid and non-assessable whole Shares to be purchased
upon the exercise of this Option, and shall deliver to the Grantee Common
Stock.
This Option shall be exercisable, at the sole election of the Grantee, either
in
full or from time to time in part and, in the event that any certificate
evidencing this Option (or any portion thereof) is exercised prior to the
Termination Date with respect to less than all of the Shares specified therein
at any time prior to the Termination Date, a new certificate of like tenor
evidencing the remaining portion of this Option shall be issued by the Company,
if so requested by the Grantee.
4. Transfer
Agent. Upon
the
Company’s receipt of a facsimile or original of Grantee’s signed Election to
Exercise Option, the Company shall instruct its transfer agent to issue one
or
more stock Certificates representing that number of shares of Common Stock
which
the Grantee is entitled to purchase in accordance with the terms and conditions
of this Option and the Election to Exercise Option.
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5. Shareholder
of Record. Each
person in whose name any certificate for shares of Common Stock shall be
issued
shall for all purposes be deemed to have become the holder of record of the
Common Stock represented thereby on the date on which the Option was exercised
and payment of the purchase price and any applicable taxes was made,
irrespective of date of issue or delivery of such certificate, except that
if
the date of such exercise and payment is a date when the Shares transfer
books
of the Company are closed, such person shall be deemed to have become the
holder
of such Shares on the next succeeding date on which such Share transfer books
are open. The Company shall not close such Share transfer books at any one
time
for a period longer than seven (7) days.
6. Actions;
Costs.
It
shall be the Company’s responsibility to take all necessary actions and to bear
all such costs to issue the certificate of Common Stock as provided herein,
including the responsibility and cost for delivery of an opinion letter to
the
transfer agent, if so required, and any documentary stamp taxes if any,
attributable to the initial issuance of the Shares. The person in whose name
the
certificate of Common Stock is to be registered shall be treated as a
shareholder of record on and after the exercise date. Upon exercise of any
portion of the Option that is to be exercised in part, the Company shall
issue
to the Grantee a written acknowledgment of the number of Shares that remain
available under the Option, if so requested by Grantee.
7. Payment
of Withholding Taxes.
If the
Company is obligated to withhold an amount on account of any tax imposed
as a
result of the exercise of the Option, the Grantee shall be required to pay
such
amount to the Company, as provided in the Plan. The Grantee acknowledges
and
agrees that the Grantee is responsible for the tax consequences associated
with
the grant of the Option and its exercise.
8. Adjustment
of Common Stock Price, Exercise Price and the Number of Shares.
The
number and kind of securities purchasable upon the exercise of this Option
and
the Exercise Price shall be subject to adjustment from time to time after
the
date hereof upon the happening of certain events, as follows:
8.1 Adjustments.
The
number of Shares purchasable upon the exercise of this Option shall be subject
to adjustments as follows:
(a) In
case
the Company shall (i) pay a dividend on Common Stock in Common Stock or
securities convertible into, exchangeable for or otherwise entitling a holder
thereof to receive Common Stock, (ii) declare a dividend payable in cash
on its
Common Stock and at substantially the same time offer its shareholders a
right
to purchase new Common Stock (or securities convertible into, exchangeable
for
or other entitling a holder thereof to receive Common Stock) from the proceeds
of such dividend (all Common Stock so issued shall be deemed to have been
issued
as a stock dividend), (iii) subdivide its outstanding shares of Common Stock
into a greater number of shares of Common Stock, or (iv) issue by
reclassification of its Common Stock any shares of Common Stock of the Company,
the number of shares of Common Stock issuable upon exercise of the Options
immediately prior thereto shall be adjusted so that the holders of the Options
shall be entitled to receive after the happening of any of the events described
above that number and kind of shares as the holders would have received had
such
Options been converted immediately prior to the happening of such event or
any
record date with respect thereto.
(b) In
case
the Company shall distribute, without receiving consideration therefor, to
all
holders of its Common Stock evidences of its indebtedness or assets (excluding
cash dividends other than as described in Section (8)(a)(ii)), then in such
case, the number of shares of Common Stock thereafter issuable upon exercise
of
the Options shall be determined by multiplying the number of shares of Common
Stock theretofore issuable upon exercise of the Options, by a fraction, of
which
the numerator shall be the closing bid price per share of Common Stock on
the
record date for such distribution, and of which the denominator shall be
the
closing bid price of the Common Stock less the then fair value (as determined
by
the Board of Directors of the Company, whose determination shall be conclusive)
of the portion of the assets or evidences of indebtedness so distributed
per
share of Common Stock. Such adjustment shall be made whenever any such
distribution is made and shall become effective immediately after the record
date for the determination of stockholders entitled to receive such
distribution.
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(c) Any
adjustment in the number of shares of Common Stock issuable hereunder otherwise
required to be made by this Section 8 will not have to be adjusted if such
adjustment would not require an increase or decrease in one percent (1%)
or more
in the number of shares of Common Stock issuable upon exercise of the Option.
No
adjustment in the number of Shares purchasable upon exercise of this Option
will
be made for the issuance of shares of capital stock to directors, employees
or
independent Optionors pursuant to the Company’s or any of its subsidiaries’
stock option, stock ownership or other benefit plans or arrangements or trusts
related thereto or for issuance of any shares of Common Stock pursuant to
any
plan providing for the reinvestment of dividends or interest payable on
securities of the Company and the investment of additional optional amounts
in
shares of Common Stock under such plan.
(d) Whenever
the number of shares of Common Stock issuable upon the exercise of the Options
is adjusted, as herein provided, the Exercise Price shall be adjusted (to
the
nearest cent) by multiplying such Exercise Price immediately prior to such
adjustment by a fraction, of which the numerator shall be the number of shares
of Common Stock issuable upon the exercise of each share of the Options
immediately prior to such adjustment, and of which the denominator shall
be the
number of shares of Common Stock issuable immediately thereafter.
(e) The
Company from time to time by action of its Board of Directors may decrease
the
Exercise Price by any amount for any period of time if the period is at least
twenty (20) days, the decrease is irrevocable during the period and the Board
of
Directors of the Company in its sole discretion shall have made a determination
that such decrease would be in the best interest of the Company, which
determination shall be conclusive. Whenever the Exercise Price is decreased
pursuant to the preceding sentence, the Company shall mail to holders of
record
of the Options a notice of the decrease at least fifteen (15) days prior
to the
date the decreased Exercise Price takes effect, and such notice shall state
the
decreased Exercise Price and the period it will be in effect.
(f) Price/Share
Adjustment. Except as provided in the last sentence of this Paragraph 8.1(f),
if
at any time during the first two (2) years of the term of this Option Agreement,
the Company enters into any NEW Stock, Option or Option Agreement(s), for
a
price that is LOWER
than the
Exercise Price of this Option, which is Fifty cents ($0.50 U.S.) per Share,
then
all Options represented by this Agreement shall be lowered by the Company
to
reflect the NEW lower Common Stock and Exercise Price, to be equal to the
lower
NEW Stock, Option or Exercise Price of such Agreement. Notwithstanding any
other
provision of this Paragraph 8.1(f) to the contrary, no adjustment to either
price or number of shares shall be made or required by occasion of (i) the
grant
or issuance of any stock, stock option, stock Option, stock appreciation
right
or other similar benefit relating to securities to any existing officer,
director or employee or to any other person as an inducement to become an
officer, director or employee, or to any person rendering services to the
Company in connection with a consulting agreement, whether such grant or
issuance is in respect of stock restricted under Section 144 or otherwise
the
subject of a Registration Statement filed with the SEC under Form S-8 or
its
equivalent, or (ii) any adjustment required pursuant to the other provisions
of
this Section 8.
3
8.2 Mergers,
Etc.
In the
case of any (i) consolidation or merger of the Company into any entity (other
than a consolidation or merger that does not result in any reclassification,
exercise, exchange or cancellation of outstanding shares of Common Stock
of the
Company), (ii) sale, transfer, lease or conveyance of all or substantially
all
of the assets of the Company as an entirety or substantially as an entirety,
or
(iii) reclassification, capital reorganization or change of the Common Stock
(other than solely a change in par value, or from par value to no par value),
in
each case as a result of which shares of Common Stock shall be converted
into
the right to receive stock, securities or other property (including cash
or any
combination thereof), each holder of Options then outstanding shall have
the
right thereafter to exercise such Option only into the kind and amount of
securities, cash and other property receivable upon such consolidation, merger,
sale, transfer, capital reorganization or reclassification by a holder of
the
number of shares of Common Stock of the Company into which such Options would
have been converted immediately prior to such consolidation, merger, sale,
transfer, capital reorganization or reclassification, assuming such holder
of
Common Stock of the Company (A) is not an entity with which the Company
consolidated or into which the Company merged or which merged into the Company
or to which such sale or transfer was made, as the case may be (“constituent
entity”), or an affiliate of a constituent entity, and (B) failed to exercise
his or her rights of election, if any, as to the kind or amount of securities,
cash and other property receivable upon such consolidation, merger, sale
or
transfer (provided that if the kind or amount of securities, cash and other
property receivable upon such consolidation, merger, sale or transfer is
not the
same for each share of Common Stock of the Company held immediately prior
to
such consolidation, merger, sale or transfer by other than a constituent
entity
or an affiliate thereof and in respect of which such rights or election shall
not have been exercised (“non-electing share”), then for the purpose of this
Section 8.2 the kind and amount of securities, cash and other property
receivable upon such consolidation, merger, sale or transfer by each
non-electing share shall be deemed to be the kind and amount so receivable
per
share by a plurality of the non-electing shares). If necessary, appropriate
adjustment shall be made in the application of the provision set forth herein
with respect to the rights and interests thereafter of the holder of Options,
to
the end that the provisions set forth herein shall thereafter correspondingly
be
made applicable, as nearly as may reasonably be, in relation to any shares
of
stock or other securities or property thereafter deliverable on the exercise
of
the Options. The above provisions shall similarly apply to successive
consolidations, mergers, sales, transfers, capital reorganizations and
reclassifications. The Company shall not effect any such consolidation, merger,
sale or transfer unless prior to or simultaneously with the consummation
thereof
the successor company or entity (if other than the Company) resulting from
such
consolidation, merger, sale or transfer assumes, by written instrument, the
obligation to deliver to the holder of Options such shares of stock, securities
or assets as, in accordance with the foregoing provision, such holder may
be
entitled to receive under this Section 8.2.
9. Changes
in Company's Capital Structure.
The
existence of the Option will not affect in any way the right or authority
of the
Company or its stockholders to make or authorize
(a) any
adjustment, recapitalization, reorganization or other changes in the Company's
capital structure or its business;
(b) any
acquisition, merger or consolidation of the Company;
(c) any
issuance of bonds, debentures, preferred or prior preference stock ahead
of or
affecting the Stock or the rights thereof;
(d) the
dissolution or liquidation of the Company;
(e) any
sale
or transfer of all or any part of the Company's assets or business; or
(f) any
other
corporate act or proceeding, whether of a similar character or otherwise.
4
10.
Employment
Rights.
No
provision of this Agreement or of the Option granted hereunder shall
give the
Grantee any right to continue in the employ of the Company or any Affiliate
of
the Company, create any inference as to the length of employment of the
Grantee,
affect the right of the Company or any Affiliate of the Company to terminate
the
employment of the Grantee, with or without Cause, or give the Grantee
any right
to participate in any employee welfare or benefit plan or other program
of the
Company or any Affiliate of the Company.
11. No
Rights as Stockholders: Notices to Grantees. Nothing
contained in this Option shall be construed as conferring upon the Grantee
or
its transferees any rights as a stockholder of the Company, including the
right
to vote, receive dividends, consent or receive notices as a stockholder with
respect to any meeting of stockholders for the election of directors of the
Company or any other matter. If, however, at any time prior to the expiration
of
the Option Period and prior to the exercise of this Option, any of the following
events shall occur:
(a) any
action which would require an adjustment pursuant to Section 8.1;
or
(b) a
dissolution, liquidation or winding up of the Company or any consolidation,
merger or sale of its property, assets and business as an entirety; then
in any
one or more of said events, the Company shall give notice in writing of such
event to the Grantee at least ten (10) days prior to the date fixed as a
record
date or the date of closing the transfer books for the determination of the
shareholders entitled to any relevant dividend, distribution, subscription
rights, or other rights or for the effective date of any dissolution,
liquidation of winding up or any merger, consolidation, or sale of substantially
all assets, but failure to mail or receive such notice or any defect therein
or
in the mailing thereof shall not affect the validity of any such action taken.
Such notice shall specify such record date or the effective date, as the
case
may be.
12. Obligation
to Register.
Grantee
acknowledges and agrees that the Company does not have any present intention
and
is under no obligation to register the Option Shares under the Securities
and
Exchange Act of 1933 or applicable state securities laws.
13. Piggy-Back
Registration Rights. The
Company hereby gives the Undersigned unlimited Piggy-Back Registration Rights
under this Option Agreement. If at any time the Company proposes to file
with
the SEC a Registration Statement relating to an offering for its own account
or
the account of others under the 1933 Act of any of its securities (other
than on
Form S-4 or Form S-8 or their then equivalents relating to securities to
be
issued solely in connection with any acquisition of any entity or business
or
equity securities issuable in connection with stock option or other employee
benefit plans) the Company shall promptly send to Grantee written notice
of the
Company’s intention to file a Registration Statement and of Grantee’s rights
under this Section 13 and, if within twenty (20) days after receipt of such
notice, Grantee shall so request in writing, the Company shall include in
such
Registration Statement all or any part of the Registrable Securities Grantee
requests to be registered. No right to registration of Registrable Securities
under this Section 13 shall be construed to limit any registration. If an
offering in connection with which Grantee is entitled to registration under
this
Section 13 is an underwritten offering, then Grantee whose Registrable
Securities are included in such Registration Statement shall, unless otherwise
agreed by the Company, offer and sell such Registrable Securities in an
underwritten offering using the same underwriter or underwriters and, subject
to
the provisions of this Agreement, on the same terms and conditions as other
shares of Common Stock included in such underwritten offering.
14. Miscellaneous.
14.1 Benefits
of this Agreement.
Nothing
in this Option shall be construed to give to any person or corporation other
than the Company and the Grantee any legal or equitable right, remedy or
claim
under this Option, and this Option shall be for the sole and exclusive benefit
of the Company and the Grantee.
5
14.2 Rights
Cumulative; Waivers.
The
rights of each of the parties under this Option are cumulative. The rights
of
each of the parties hereunder shall not be capable of being waived or varied
other than by an express waiver or variation in writing. Any failure to exercise
or any delay in exercising any of such rights shall not operate as a waiver
or
variation of that or any other such right. However, the Grantee may waive
a
default and its consequences. Any defective or partial exercise of any of
such
rights shall not preclude any other or further exercise of that or any other
such right. No act or course of conduct or negotiation on the part of any
party
shall in any way preclude such party from exercising any such right or
constitute a suspension or any variation of any such right.
14.3 Benefit;
Successors Bound.
This
Option and the terms, covenants, conditions, provisions, obligations,
undertakings, rights, and benefits hereof, shall be binding upon, and shall
inure to the benefit of, the parties hereto and their heirs, executors,
administrators, representatives, successors, and permitted assigns.
14.4 Entire
Agreement.
This
Option contains the entire agreement between the parties with respect to
the
subject matter hereof. There are no promises, agreements, conditions,
undertakings, understandings, warranties, covenants or representations, oral
or
written, express or implied, between them with respect to this Option or
the
matters described in this Option, except as set forth in this Option. Any
such
negotiations, promises, or understandings shall not be used to interpret
or
constitute this Option.
14.5 Assignment.
This
Option may be assigned, in whole or in part, by Assignment of Option completed,
executed and delivered to the Company.
14.6 Amendment.
This
Option may be amended only by an instrument in writing executed by the parties
hereto.
14.7 Severability.
Each
part of this Option is intended to be severable. In the event that any provision
of this Option is found by any court or other authority of competent
jurisdiction to be illegal or unenforceable, such provision shall be severed
or
modified to the extent necessary to render it enforceable and as so severed
or
modified, this Option shall continue in full force and effect.
14.8 Notices.
Notices
required or permitted to be given hereunder shall be in writing and shall
be
deemed to be sufficiently given when personally delivered (by hand, by courier,
by telephone line facsimile transmission, receipt confirmed, or other means)
or
sent by certified mail, return receipt requested, properly addressed and
with
proper postage pre-paid (i) if to the Company, at its executive office (ii)
if
to the Grantee, at the address set forth under its name in the subscription
agreement for this Option, with a copy to its designated attorney and (iii)
if
to any other Grantee, at such address as such Grantee shall have provided
in
writing to the Company, or at such other address as each such party furnishes
by
notice given in accordance with this section, and shall be effective, when
personally delivered, upon receipt and, when so sent by certified mail, four
(4)
business days after deposit with the United States Postal Service.
14.9 Governing
Law.
This
Agreement shall be governed by the interpreted in accordance with the laws
of
the State of Arizona without reference to its conflicts of laws rules or
principles.
6
14.10 Forum
Selection and Consent to Jurisdiction.
Any
litigation based thereon, or arising out of, under, or in connection with,
this
agreement or any course of conduct, course of dealing, statements (whether
oral
or written) or actions of the Company or Grantee shall be brought and maintained
exclusively in the federal courts of the State of Arizona without reference
to
its conflicts of laws rules or principles. The Company hereby expressly and
irrevocably submits to jurisdiction exclusively with the federal Courts of
the
State of Arizona for the purpose of any such litigation as set forth above
and
irrevocably agrees to be bound by any final judgment rendered thereby in
connection with such litigation. The Company further irrevocably consents
to the
service of process by registered mail, postage prepaid, or by personal service
within or without the State of Arizona. The Company hereby expressly
and irrevocably waives, to the fullest extent permitted by law, any objection
which it may have or hereafter may have to the laying of venue of any such
litigation brought in any such court referred to above and any claim that
any
such litigation has been brought in any inconvenient forum. To the extent
that
the Company has or hereafter may acquire any immunity from jurisdiction of
any
court or from any legal process (whether through service or notice, attachment
prior to judgment, attachment in aid of execution or otherwise) with respect
to
itself or its property. The Company hereby irrevocably waives such immunity
in
respect of its obligations under this agreement and the other loan
documents.
14.11 Waiver
of Jury Trial. The
Grantee and the Company hereby knowingly, voluntarily and intentionally waive
any rights they may have to a trial by jury in respect of any litigation
based
hereon, or arising out of, under, or in connection with, this agreement,
or any
course of conduct, course of dealing, statements (whether oral or written)
or
actions of the Grantee or the Company. The Company acknowledges and agrees
that
it has received full and sufficient consideration for this provision and
that
this provision is a material inducement for the Grantee entering into this
agreement.
14.12 Consents.
The
person signing this Option on behalf of the Company hereby represents and
Options that he has the necessary power, consent and authority to execute
and
deliver this Option on behalf of the Company.
14.13 Further
Assurances.
In
addition to the instruments and documents to be made, executed and delivered
pursuant to this Option, the parties hereto agree to make, execute and deliver
or cause to be made, executed and delivered, to the requesting party such
other
instruments and to take such other actions as the requesting party may
reasonably require to carry out the terms of this Option and the transactions
contemplated hereby.
14.14 14.14 Section
Headings.
The
Section headings in this Option are for reference purposes only and shall
not
affect in any way the meaning or interpretation of this Option.
14.15 Construction.
Unless
the context otherwise requires, when used herein, the singular shall be deemed
to include the plural, the plural shall be deemed to include each of the
singular, and pronouns of one or no gender shall be deemed to include the
equivalent pronoun of the other or no gender.
IN
WITNESS WHEREOF, the parties have caused this Option to be duly executed,
all as
of the day and year first above written.
| Tankless Systems Worldwide, Inc. |
Digital
Crossing, LLC
|
||
| /s/ Xxxxxx Xxxxxxxx | /s/ Xxxxxxx X. Xxxx | ||
|
|
|
||
| Name
Xxxxxx
Xxxxxxxx Title Chief Executive Officer |
Name
Xxxxxxx X.
Xxxx Title Manager |
7
Amendment
No. 1
to
AGREEMENT
FOR
CONSULTING SERVICES
THIS
Agreement (Amendment) is made this 4th
day of
June, 2004, by and between DIGITAL
CROSSING, LLC, (hereinafter
referred to as “Consultant”) and
TANKLESS SYSTEMS WORLDWIDE, INC., a
Nevada
corporation (“Company”).
WHEREAS,
the Consultant and Company are parties to that one certain Agreement for
Consulting Services dated February 1, 2004 (the “Consulting Agreement”);
and
WHEREAS,
the Consultant has agreed to provide additional services pursuant to said
Consulting Agreement in exchange for which the Company has agreed to pay
additional compensation;
NOW
THEREFORE, In consideration of the foregoing and the covenants contained herein,
the parties hereto hereby agrees as follows.
1. Paragraph
5(a) of the Consulting Agreement shall be amended to provided that, effective
June 1, 2004, the Company will pay to Consultant a monthly fee in the amount
of
$5,000.00, payable semi-monthly, in arrears, on the 15th
and last
day of each month during the remainder of the Term of this Agreement commencing
June 15, 2004 (for the period June 1 through June 15). Any partial month shall
be pro-rated and the payment next due shall reflect such proration.
2. Paragraph
7 of the Consulting Agreement shall be amended to expressly provide for the
reimbursement to Consultant of all cell phone charges incurred during the Term
of the agreement with respect to one (1) cell telephone, such means of
communication being vital to the effectiveness of the services rendered to
and
for the benefit of the Company.
3. Except
as
expressly provided in this Amendment, the terms and conditions of the Consulting
Agreement shall remain as originally agreed and in full force and
effect.
EXECUTED
this ___4th___
day
of June, 2004.
|
TANKLESS
SYSTEMS WORLDWIDE, INC.
a Nevada corporation
|
DIGITAL CROSSING, LLC | ||
| /s/ Xxxxxx Xxxxxxxx | /s/ Xxxxxxx X. Xxxx | ||
|
|
|
||
| Name
Xxxxxx
Xxxxxxxx Title CEO |
Name
Xxxxxxx X.
Xxxx Title Manager |
1
Amendment
No. 2
to
AGREEMENT
FOR
CONSULTING SERVICES
THIS
Agreement (Amendment) is made effective the 31st
day of
January, 2005 by and between DIGITAL
CROSSING, L.L.C., a Delaware limited liability company
(“Consultant”), and TANKLESS
SYSTEMS WORLDWIDE, INC.,
a
Nevada corporation (“Company”).
WHEREAS,
the Consultant and the Company are parties to that one certain Agreement
for
Consulting Services dated February 1, 2004 (the “Consulting Agreement”);
and
WHEREAS,
the Consulting Agreement was amended, effective June 4, 2004, by Amendment
No. 1
thereto; and
WHEREAS,
by its terms, the Consulting Agreement was to terminate on January 31, 2005,
but
by agreement of the parties did not terminate and was continued after that
date
with the understanding that a more formal amendment would be executed containing
the agreed terms and conditions of such continued engagement; and
WHEREAS,
the Company considers the services of the Consultant to be valuable to the
success of the Company and desires to continue to avail itself of such services,
and the Consultant has agreed to continue to provide services pursuant to
the
Consulting Agreement;
NOW,
THEREFORE, in consideration of the foregoing and the covenants contained
herein,
the parties hereto hereby agree as follows:
1. The
fourth (4th)
sentence of Paragraph 1 of the Consulting Agreement shall be amended to provide
that the services of Consultant pursuant to this Consulting Agreement shall
be
rendered exclusively to and at the sole direction of the Board of Directors
of
the Company and not to any officer or employee of the Company, such term
being a
material condition of Consultant in agreeing to the extension herein provided.
2. Paragraph
4 of the Consulting Agreement shall be amended to provide that the term of
the
Agreement is extended for three (3) additional years, to January 31,
2008.
3. Paragraph
5(a) of the Consulting Agreement shall be amended to provide for and read
as
follows:
(a) Effective
February 1, 2005, the Company will pay a monthly fee to Consultant in the
amount
of Ten Thousand Dollars ($10,000.00) payable semi-monthly, in arrears, on
the
15th
and last
day of each month during the remainder of the Term of this Agreement, commencing
February 15, 2005 (for the period February 1 through February 15, 2005) and
continuing semi-monthly for the remainder of the Term. Any partial month
shall
be pro-rated and the payment next due shall reflect such pro-ration. In the
event the Consulting Agreement shall be terminated for any reason, or for
no
reason whatsoever, all sums remaining for the balance of the Term of this
Agreement shall immediately become due and payable. The Consultant agrees
that
the fee otherwise payable as provided above in excess of $5,000.00 per month
may, at the discretion of the Company, be paid in the form of common stock
of
the Company. The amount of compensation not paid in cash (the “Stock Based
Payment”) shall be divided by the per share Price, determined as follows: the
price per share at which the shares shall be valued and issued shall be
seventy-five percent (75%) of the average of the closing prices of the Company’s
common stock as reported by Bloomberg, L.P., or other independent reporting
service acceptable to both parties, for the ten (10) day trading period
preceding the date on which Company shall have given written notice of such
election (the “Price”), and the Company, upon issuance and delivery of the
certificates evidencing such shares, as determined above, shall be credited
as
having paid a sum equal to the product of the number of shares times the
Price.
Shares issued as Stock Based Payment shall be restricted pursuant to the
provisions of Rule 144 of the Securities Act of 1933 but otherwise bear no
restrictions of any nature.
4. Paragraph
5(c) of the Consulting Agreement shall be amended to provide that the Exercise
Period and the Option Period, as those terms are used in the Option Agreement
attached as Exhibit “A” to the Consulting Agreement (the “Option Agreement”),
shall be extended five additional years from the Grant Date, for a total
of ten
(10) years, said periods to end on February 11, 2014.
5. Paragraph
5 of the Consulting Agreement shall be amended to include the following as
subparagraph (h) thereof:
(h) In
addition to other sums due and payable hereunder, the Company will pay to
Consultant during the remainder of the Term of this Consulting Agreement
(i) the
sum of Five Hundred Dollars ($500) per month to enable one designated employee,
consultant, agent or representative of Consultant to purchase and maintain
health insurance, (ii) shall reimburse Consultant, or such designated employee,
consultant, agent or representative of Consultant for any costs and expenses
incurred for medical services not otherwise paid or reimbursed by such medical
insurance provider, including any deductibles, not to exceed the aggregate
sum
of Five Thousand Dollars ($5,000.00) per calendar year during the Term hereof,
(iii) shall pay directly or reimburse Consultant for all costs incidental
to one
cellular telephone in the name of Consultant or an employee, consultant,
agent
or representative of Consultant, and (iv) shall reimburse Consultant, or
an
employee, consultant, agent or representative of Consultant, for professional
continuing education seminars, classes, fees and related expenses, including
associated travel expenses, and for all dues and fees payable to professional
and governing bodies.
6. Paragraph
5 of the Consulting Agreement shall be amended to include the following as
subparagraph (i) thereof:
(i) As
an
inducement to Consultant to extend the Term of this Consulting Agreement
and as
additional agreed compensation for services heretofore rendered beyond those
contemplated at the inception of the Consulting Agreement (the agreements
for
such additional compensation having been embodied in various oral agreements
between the Consultant and the Company during the initial Term of the Consulting
Agreement, which are hereby acknowledged and memorialized in this paragraph),
including, but not limited to, matters relating to the following:
(i)
the
filing of Chapter 11 Bankruptcy Protection for Envirotech Systems Worldwide,
Inc. (“Envirotech”), a subsidiary of the Company, and the preparation and filing
of a Plan of Reorganization;
(ii)
the
filing of claims in U.S. District Court against the former officers, directors
and principal shareholders of Envirotech and the successful prosecution of
same
to satisfactory settlements;
(iii)
changes in interim management and the efforts of Consultant to maintain
stability and focus for the Company;
(iv)
handling various previously unknown claims, suits and demands on behalf of
the
Company;
(v)
planning, documenting and overseeing the raising of capital for the
Company;
(vi)
supervising the accounting and administration of the affairs of the Company
and
its affiliated entities;
(vii)
assisting in the annual audit and monthly reviews by the auditors for the
Company and the preparation and filing of annual and quarterly reports with
the
Securities Exchange Commission; and
(viii)
supervising
and guiding the research and development program of the Company resulting
in the
filing of several new Applications for Patents and the development of
a new line
of products that the Company anticipates manufacturing and
marketing,
all
of
which have been to the direct benefit of the Company and its shareholders,
it
being the opinion of the Company that, but for such extraordinary efforts
on the
part of Consultant, in concert with various other key consultants, the Company
would not have survived this period, the Company agrees to issue and deliver
to
Consultant, upon execution of this Amendment, Seven Hundred Fifty Thousand
(750,000) shares of Common Stock of the Company, $0.001 par value, which
shares
shall be restricted pursuant to the provisions of Rule 144 of the Securities
Act
of 1933, as amended (“Rule 144”), and issued pursuant to the provisions of
subparagraphs (d) through (g) of this paragraph 5 and entitled to the rights
set
forth in paragraph 6 of the Consulting Agreement. Such shares shall be deemed
fully earned when issued and no portion shall be subject to attachment, refund
or return to the Company. All such shares, when issued, shall be deemed fully
paid and non-assessable, shall be without restriction or other condition
except
as may be imposed by Rule 144, and the issuance of such shares will not be
subject to any preemptive or similar rights.
7. Except
as
expressly provided in this Amendment, the terms and conditions of the Consulting
Agreement, as heretofore amended by Amendment No. 1, shall remain as originally
agreed and in full force and effect. In the event of any conflict between
the
provisions of this Amendment and Amendment No. 1 or the original Consulting
Agreement, the terms and provisions of this Amendment shall
prevail.
EXECUTED
this 6th
day of
September 2005, to be effective the 31st
day of
January 2005.
|
TANKLESS
SYSTEMS WORLDWIDE, INC.
a
Nevada corporation
|
DIGITAL
CROSSING, L.L.C.
a Delaware limited liability company
|
||
| /s/ Xxxxxx Xxxxxxxx | /s/ Xxxxxx Xxxxxxxx | ||
|
|
|
||
| Name
Xxxxxx Xxxxxxxx Title CEO |
Name
Xxxxxx Xxxxxxxx Title Manager |
1
