HOME SECURITY INTERNATIONAL INC.
SPEAKEASY PTY LIMITED
XXXXXXX XXXXX XXXXXX
CONSULTANCY ENGAGEMENT AGREEMENT
Xxxxx Xxxxx & Associates
Solicitors
Xxxxx 0, Xxxxx Xxxxx
000 Xxxx Xxxxxx
XXXXXX XXX 0000
Telephone: 9290.3838
Facsimile: 9290.3737
TABLE OF CONTENTS
1. DEFINITIONS
2. APPOINTMENT
3. CONSULTANT'S DUTIES
4. THE CONSULTANT'S FEE
5. OPTIONS
6. BONUS
7. EMPLOYEE'S LEAVE
8. PERFORMANCE OF CONSULTANT'S DUTIES
9. CONFIDENTIAL INFORMATION AND INTELLECTUAL PROPERTY
10. ASSIGNMENT OF INTELLECTUAL PROPERTY
11. TERMINATION
12. EARLY TERMINATION
13. WHAT HAPPENS AFTER TERMINATION OF CONSULTANT'S ENGAGEMENT
14. RESTRAINT ON THE CONSULTANT'S CONDUCT
15. INDEPENDENT CONTRACTOR
16. COMPLIANCE
17. SEVERABILITY
18. WAIVER
19. NOTICE
20. GOVERNING LAW
21. ENTIRE AGREEMENT
22. ALTERATION
23. THIS AGREEMENT IS CONFIDENTIAL
24. HEADINGS
CONSULTANT ENGAGEMENT AGREEMENT
AGREEMENT dated 1997
BETWEEN: HOME SECURITY INTERNATIONAL, INC., a company incorporated in Delaware,
United States of America, and having its registered office at
[ ] ("Company")
AND: SPEAKEASY PTY LIMITED ACN 063 680 599 as trustee for the SPEAKEASY
UNIT TRUST of c/- Bedford Titley, 00 Xxxx Xxxxxx, Xxxxx Xxxx, Xxx
Xxxxx Xxxxx, Xxxxxxxxx ("Consultant")
AND: XXXXXXX XXXXX XXXXXX of 00 Xxxxxxxxxx Xxxxxx, Xxxxxx, Xxx Xxxxx Xxxxx,
Xxxxxxxxx ("Nominated Person")
RECITALS
A. The Company has offered to engage the Consultant on the terms of this
Agreement and the Consultant has accepted that offer.
B. The Nominated Person has agreed to guarantee the performance by the
Consultant of its obligations under this Agreement.
AGREEMENT
1. DEFINITIONS
1.1 In this Agreement:
"Confidential Information" means all confidential information including,
but not limited to trade secrets and confidential know-how of which the
Consultant becomes aware or generates (both before and after the day this
Agreement is signed) in the course of, or in connection with, employment
with the Company, its Subsidiaries and predecessors.
"External Businesses" means any businesses or other commercial activities
engaged in by the Consultant otherwise then in the course of his engagement
under this Agreement.
"HSI Dealer" means any dealer, distributor or agent appointed by the
Company (or any subsidiary of the company) from time to time to promote the
sales, installation and/or service of the SecurityGuard Product.
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"HSI Group" means the Company and its wholly owned subsidiaries.
"HSI Group Company" means a member of the HSI Group.
"Intellectual Property Rights" means all intellectual property rights
including without limitation:
(a) patents, copyright, registered design, trademarks and the right to
have confidential information kept confidential; and
(b) any application or right to apply for registration of any of those
rights.
"Sale" means the sale by an HSI Dealer of a SecurityGuard product to a
member of the public where the product has not been returned by the
consumer, nor has there been a refund of the price paid for the Security
Guard product.
"Securityguard Product" means the home security alarm devices which at the
date of this agreement are manufactured by Ness Security Products Pty
Limited and known as "SecurityGuard" and SecurityGuard II".
"Fee" means the benefits due under clause 4.1 from time to time.
1.2 In this Agreement, unless the contrary intention appears:
(a) the singular includes the plural and vice versa;
(b) a reference to a clause or schedule is a reference to a clause or
schedule to this Agreement and a reference to this Agreement includes
an schedules;
(c) a reference to a document or agreement, including this Agreement,
includes a reference to that document or agreement as novated, altered
or replaced from time to time;
(d) a reference to "$" is a reference to Australian currency; and
(e) a reference to writing includes typewriting, printing, photocopying
and any other method of representing words, figures or symbols in a
permanent visible form.
2. APPOINTMENT
2.1 The Company must engage the Consultant.
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2.2 The Consultant's engagement will commence immediately following the
successful completion of the float of HSI.
3. CONSULTANT'S DUTIES
3.1 The Consultant must:
(a) perform to the best of the Consultant's abilities and knowledge the
duties assigned to the Consultant by the Company from time to time,
whether during or outside the Company's normal business hours;
(b) use all reasonable efforts to promote the interest of the Company;
(c) act in the Company's best interests;
(d) comply with all policies of the Company in place from time to time;
(e) comply with all law applicable to the Consultant's engagement and the
duties assigned to the Consultant;
(f) report to the person or persons nominated by the Company from time to
time;
(g) perform services in connection with any subsidiaries of the Company as
directed anywhere throughout the world;
(h) if required by the Company, enter into a similar engagement with an
HSI Group Company, either exclusively or in conjunction with
engagement by the Company; and
(i) be wholly responsible for the payment of its own taxes and for PAYE
tax deductions from the salary (if any) paid by the Consultant to any
employee of the Consultant and for any superannuation, workers'
compensation, long service leave, holiday pay, sick leave or other
entitlement of any employee.
3.2 Without limiting the Consultant's duties to the Company, the Consultant
must not:
(a) act in conflict with the Company's best interests; or
(b) compete with the Company.
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3.3 The Consultant may spend a reasonable amount of time on a weekly basis
working on the External Businesses. If the Consultant is not performing
its obligations under clauses 3.1 and 3.2 to the satisfaction of the board
of the company because of its rights under this clause 3.3 then the board
of the Company may review the time spent by the consultant working on the
External Businesses.
4. THE CONSULTANT'S FEE
4.1 The Company must pay the Consultant a fee of US $700,000 per annum which is
to be paid monthly.
4.2 For the avoidance of doubt, the Company is not obliged to pay or reimburse
the Consultant for any out of pocket expenses incurred by the Consultant in
relation to the business of the Company or otherwise.
4.3 The Company must review the Fee not less than once each year and may vary
the Fee following that review.
4.4 The Consultant's Fee set out in clause 4.1 is inclusive of any payments
required to be made by the Company pursuant to any applicable legal,
statutory or regulatory requirement arising from services performed by the
Consultant in accordance with this Agreement in any jurisdiction in which
the Consultant is required to work.
4.5 The Company may, and if requested by the Consultant, the Company must set
off against the Fee any or all interest which has become due to the Company
by the Consultant on a loan made by the Company to the Consultant in
respect of the 95% of the allotment price for the 250,000 shares in the
Company allotted to the Consultant.
5. OPTIONS
The consultant may be issued with options in accordance with Schedule 1.
6. BONUS
The Company may pay a bonus to the Consultant in accordance with Schedule
2. The Company may pay a bonus to the Consultant in accordance with
Schedule 3.
7. EMPLOYEE'S LEAVE
The Company consents to the Consultant granting any employee leave in
accordance with applicable law.
8. PERFORMANCE OF CONSULTANT'S DUTIES
8.1 The Company consents to the Consultant granting any employee of the
Consultant up to 10 days' paid sick leave each year if such employee is
unable to perform the Consultant's duties due to illness or injury.
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8.2 If the Consultant is unable to perform the Consultant's duties:
(a) for a period of less than three months in any one period of 52
consecutive weeks, the Consultant's engagement under this Agreement
will continue but the Company is not obliged to remunerate the
Consultant in accordance with Clause 4.1; or
(b) for equal to or more than three months in any one period of 52
consecutive weeks, the Company may terminate this Agreement by giving
the Consultant in addition to the Fee received or earned until that
point in accordance with Clause 4.1 an amount equal to the Fee
received or earned by the Consultant during the three month period
immediately preceding termination.
8.3 The Consultant acknowledges that the Consultant is not entitled to any
payment from the Company if this Agreement is terminated under Clause 8.2
except for:
(a) any remuneration due under Clause 4 but unpaid at the date of the
termination;
(b) any amount required under Clause 11.1 to be paid;
(c) any amount required under applicable law to be paid, less any amount
required to be paid under Clause 11.1.
9. CONFIDENTIAL INFORMATION AND INTELLECTUAL PROPERTY
9.1 The Consultant may use Confidential Information solely for the purpose of
performing the Consultant's duties with the Company.
9.2 The Consultant must keep confidential all Confidential Information but may
disclose Confidential Information:
(a) to persons who:
(i) are aware and agree that the Confidential Information must be
kept confidential; or
(ii) have signed any confidentiality agreement required by the Company
from time to time,
and either:
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(iii) have a need to know relative to the running to the Business
(and only to the extent that each has a need to know); or
(iv) have been approved by the person or persons nominated by the
Company from time to time;
(b) that the Consultant is required to disclose in the course of the
Consultant's duties with the Company;
(c) that was public knowledge when this Agreement was signed or became so
at a later date (other than as a result of a breach of confidentiality
by the Consultant); or
(d) that the Consultant is required by law to disclose.
9.3 The Consultant must provide assistance reasonably requested by the Company
in relation to any proceedings the Company may take against any person for
unauthorized use, copying or disclosure of Confidential Information.
10. ASSIGNMENT OF INTELLECTUAL PROPERTY
10.1 The Consultant:
(a) presently assigns to the Company all existing and future Intellectual
Property Rights in all inventions, models, designs, drawings, plans,
software, reports proposals and other materials created or generated
by the Consultant (whether alone or with the Company, its other
employees or contractors) for use by the Company; and
(b) acknowledges that by virtue of this clause all such existing rights
are vested in the Company and, on their creation, all such future
rights will vest in the Company.
10.2 The Consultant must do all things reasonably requested by the Company to
enable the Company to assure further the rights assigned under CLAUSE 10.1.
11. TERMINATION
11.1 Subject to CLAUSES 8.3 and 12, the Consultant's engagement may be
terminated after three years from the date of commencement of the
Consultant's engagement under this agreement:
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(a) by the Consultant giving to the Company three months' notice; or
(b) by the Company giving to the Consultant three months' notice.
11.2 The Consultant's engagement may be terminated by the Company at any time
without notice if the Consultant:
(a) disobeys a lawful direction of the Company;
(b) is guilty of other serious misconduct;
(c) breaches CLAUSE 9;
(d) other than CLAUSE 9, breaches any other material provision of this
Agreement including CLAUSES 3.1 or 3.2.
(e) is found guilty by a court of a criminal offence.
11.3 Termination under this clause does not affect any accrued rights or
remedies of either party.
12. EARLY TERMINATION
If the Consultant's engagement is terminated for any reason other than
those detailed in CLAUSES 11.1 AND 11.2 the Consultant agrees that:
(a) the Company may terminate this Agreement by giving to the Consultant
in addition to the Fee received or earned until that point in
accordance with CLAUSE 4.1, an amount equal to the Fee received or
earned by the Consultant during the 12 month period immediately
preceding termination.
(b) the Consultant is not entitled to any payment from the Company except
for:
(i) any remuneration due under CLAUSE 4 but unpaid at the date of the
termination; and
(ii) any amount required under applicable law to be paid, less any
amount paid under CLAUSE 12(A).
13. WHAT HAPPENS AFTER TERMINATION OF CONSULTANT'S ENGAGEMENT
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13.1 If the Consultant's engagement is terminated for any reason:
(a) the Company may set off any amounts the Consultant owes the Company
against any amounts the Company owes the Consultant at the date of
termination except for amounts the Company is not entitled by law to
set off.
(b) the Consultant must return all the Company's property (including
property leased by the Company) to the Company on termination
including all written or machine readable material, software,
computers, credit cards, keys and vehicles;
(c) the Consultant's obligations under CLAUSE 9 continue after termination
except in respect of information that is part of the Consultant's
general skill or knowledge; and
(d) the Consultant must not record any Confidential Information in any
form after termination.
14. RESTRAINT ON THE CONSULTANT'S CONDUCT
14.1 During the Restraint Period after termination of the Consultant's
engagement, the Consultant must not in any area in which the Company has
operated during the preceding 24 months or to the Consultant's knowledge
intends to operate in the ensuing 24 months:
(a) engage in or prepare to engage in any business or activity that is the
same or similar to that part or parts of the business carried on by
the Company in which the Consultant was engaged at any time during the
Consultant's last 24 months with the Company; or
(b) solicit, canvass, approach or accept any approach from any person who
was at any time during the Consultant's last 24 months with the
Company a client of the Company in that part or parts of the business
carried on by the Company in which the Consultant was engaged with a
view to obtaining the custom of that person in a business that is the
same or similar to the business conducted by the Company; or
(c) interfere with the relationship between the Company and its customers,
employees or suppliers; or
(d) induce or assist in the inducement of any employee of the Company to
leave their employment.
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14.2 In clause 14.1, the "Restraint Period" means:
(a) 12 months after termination of the Consultant's engagement;
(b) 9 months after termination of the Consultant's engagement;
(c) 6 months after termination of the Consultant's engagement;
14.3 Clause 14.1 has the effect of several separate and individual covenants and
restraints consisting of each separate covenant and restraint set out in
clause 14.1 combined with each separate period of time set out in clause
14.2.
14.4 If any of the several separate and independent covenants and restraints
referred to in clause 14.3 are or become invalid or unenforceable for any
reason, then that invalidity or unenforceability will not affect the
validity of enforceability of any of the other separate and independent
covenants and restraints.
14.5 In clause 14.1 "engage in" means to participate, assist or otherwise be
directly or indirectly involved as a member, shareholder, unitholder,
director, consultant, advisor, contractor, principal, agent, manager,
employee, beneficiary, partner, associate, trustee or financier.
14.6 The Company may require the Consultant to provide evidence confirming to
the satisfaction of the Company that the Consultant is not in breach of
this clause.
14.7 The Consultant acknowledges that each restriction specified in clause
14.1 is in the circumstances reasonable and necessary to protect the
Company's legitimate interests.
15. INDEPENDENT CONTRACTOR
The Consultant is an independent contractor and shall not in relation to or
on behalf of any other party or any of its products or services:
(a) be, or hold itself out to be, an agent, employee, partner, joint
venturer or otherwise associated;
(b) have, or hold itself out as having, the authority to pledge the credit
of any other party;
(c) accept orders, otherwise contractually bind or enter into any
agreement or arrangement; or
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(d) make any representation or statement, express or implied, whether oral
or in writing.
16. COMPLIANCE
The exercise of or compliance with any discretion, right or obligation
under this Agreement is subject to compliance with any discretion, right or
obligation under this Agreement is subject to compliance with all
applicable laws.
17. SEVERABILITY
Part or all of any clause of this Agreement that is illegal or
unenforceable will be severed from this Agreement and the remaining
provisions of this Agreement continue in force.
18. WAIVER
The failure of either party at any time to insist on performance of any
provision of this Agreement is not a waiver of its right at any later time
to insist on performance of that or any other provision of this Agreement.
19. NOTICE
19.1 A party giving notice under this Agreement must do so in writing.
19.2 A notice given in accordance with clause 19.1 is to be received if:
(a) hand delivered, on delivery;
(b) sent by prepaid post, 3 days after the date of posting;
(c) sent by telex, when the machine on which the telex is transmitted
receives at the end of transmission, the answerback code of the
recipient informs the sender that it has not received the entire
notice;
(d) sent by facsimile, when the sender's facsimile system generates a
message confirming successful transmission of the total number of
pages of the notice unless, within 8 Business Hours after that
transmission, the recipient informs the sender that it has not
received the entire notice.
20. GOVERNING LAW
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This Agreement is governed by the law applicable in the United States of
America and the parties irrevocably and unconditionally submit to the
exclusive jurisdiction of the courts of the United States of America.
21. ENTIRE AGREEMENT
This Agreement (including its schedules):
(a) constitutes the entire agreement between the parties as to its subject
matter; and
(b) in relation to that subject matter, supersedes any prior understanding
or agreement between the parties and any prior condition, warranty,
indemnity or representation imposed, given or made by a party.
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22. ALTERATION
This Agreement (including its schedules) may only be altered in writing
signed by each party.
23. THIS AGREEMENT IS CONFIDENTIAL
The terms of this Agreement and any subsequent amendments are confidential
and may not be disclosed by the Consultant or Nominated Person to any other
person, other than for the purpose of obtaining professional legal or
accounting advice, without the written approval of the Company.
24. HEADINGS
Headings are for ease of reference only and do not affect the meaning of
this Agreement.
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SCHEDULE 1 - Options (Clause 5)
As determined by resolution of the Board of Directors from time to time pursuant
to the terms and conditions of the Company's Executive Option Plan.
SCHEDULE 2 - Bonus (Clause 6)
10% of the audited net profit of the HSI Group after tax. The bonus is to be
paid monthly, calculated on the basis of net profits after tax, as disclosed in
the monthly management accounts of the HSI Group. If when the audited accounts
of the HSI Group are released and the amount actually paid in the preceding 12
months is more or less than 10% of the audited net profit of the HSI Group after
tax as per those annual accounts, then the parties must within 30 days of
release of those accounts make the necessary adjustment between them to reduce
or increase the amount actually paid to equal 10% of the audited net profit of
the HSI Group after tax.
SCHEDULE 3 - Bonus (Clause 6)
As determined by a resolution of the Board of Directors of the Company.
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EXECUTED as an Agreement.
THE COMMON SEAL OF HOME )
SECURITY INTERNATIONAL INC. was )
duly affixed to this document by the )
authority of the Board of Directors in the )
presence of: )
)
__________________________________ ) _________________________________
Signature of Secretary ) Signature of Director
)
__________________________________ ) _________________________________
Name of Secretary - please print ) Name of Director - please print
THE COMMON SEAL of SPEAKEASY )
PTY LIMITED was duly affixed to this )
document by the authority of the Board of )
Directors in the presence of: )
)
___________________________________ ) _________________________________
Signature of Secretary ) Signature of Director
)
___________________________________ ) _________________________________
Name of Secretary - please print ) Name of Director - please print
SIGNED SEALED AND DELIVERED by )
XXXXXXX XXXXX XXXXXX in the )
presence of: )
)
____________________________________ ) _________________________________
Signature of Witness )
)
____________________________________ )
Name of Witness - please print )
