EXHIBIT 10.2
CONSULTING AGREEMENT
This Consulting Agreement ("Agreement") is made and entered into this 11th
day of March, 2004 (the "Effective Date") by and between Xxxxxx Xxxxxxxx
(the "Consultant") and Spectrum Sciences & Software Holdings Corp. (the
"Company").
WHEREAS, the Company desires to engage Consultant to perform certain
corporate planning, business development, and financial strategy services for
the Company, and Consultant desires, subject to the terms and conditions of this
Agreement, to perform said services for the Company.
NOW IN CONSIDERATION OF THE MUTUAL PROMISES AND UNDERTAKING HEREIN
CONTAINED AND FOR OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND
SUFFICIENCY OF WHICH IS HEREBY ACKNOWLEDGED THE PARTIES AGREE AS FOLLOWS:
1. ENGAGEMENT OF CONSULTANT: The Company hereby engages Consultant and
Consultant hereby agrees to hold itself available to render, and to render at
the request of the Company, independent advisory consulting services concerning
the following:
a) develop an in-depth familiarization with the Company's business
objectives and bring to its attention potential or actual
opportunities which meet those objectives or logical extensions
thereof;
b) alert the Company to new or emerging high potential forms of
production and distribution which could either be acquired or
developed internally;
c) comment on the Company's corporate development including such factors
as position in competitive environment, financial performances vs.
competition, strategies, operational viability, etc.;
d) identify respective suitable merger or acquisition candidates for the
Company, perform appropriate diligence investigations with respect
thereto, advise the Company with respect to the desirability of
pursuing such candidates, and assist the Company in any negotiations
which may ensue therefrom; and
e) other such planning and development services, all as requested and
instructed by the Company.
The services to be rendered by Consultant to the Company shall under NO
circumstances include the following:
a) any activities which could be deemed by the Securities and Exchange
Commission to constitute investment banking or any other activities
required by Consultant to be registered as a broker-dealer under the
Securities Act of 1934.
b) services in connection with the offer or sale of securities in a
capital-raising transaction;
c) services that directly or indirectly promote or maintain a market for
the securities of the Company including without limitation the
dissemination of information that reasonably may be expected to
sustain or raise or otherwise influence the price of the securities;
d) services providing investor relations or shareholder communications;
e) consultation in connection with financing that involves any issuance
of the Company's securities, whether equity or debt.
2. TERM: The term of this agreement ("Term") shall begin as of the
Effective Date and shall terminate one (1) year thereafter ("Anniversary Date"),
subject to Consultant's and Company's respective rights to terminate upon ten
days' written notice. Consultant shall perform the full term hereof, provided
and to the extent he is compensated as provided herein and requested by Company
to so perform.
3. COMPENSATION: In consideration of the services to be provided for
the Company by Consultant the Company agrees to compensate the Consultant as
follows:
a) As soon as practicable after the execution of this Agreement, the
Company agrees to issue to Consultant an option (the "Option") to
purchase 9,000,000 shares of the Company's common stock at an exercise
price of the lesser of $1.65 or the fair market value of the shares at
the time of exercise (the "Option Shares").
b) The Option Shares shall vest immediately upon issuance, and all shall
have "piggyback" or S-8 registration rights.
c) The exercise rights of Consultant shall be limited such that, unless
Consultant gives written notice 75 days in advance to the Company of
Consultant's intention to exceed the Limitation on Conversion as
defined herein, with respect to all or a specified amount of the
Option and the corresponding number of the underlying shares, in no
instance shall Consultant (singularly, together with any Persons who
in the determination of the Consultant, together with the Consultant,
constitute a group as defined in Rule 13d-5 of the Exchange Act) be
entitled to exercise the Option to the extent such exercise would
result in Consultant beneficially owning more than five percent (5%)
of the outstanding shares of common stock of the Company. For these
purposes, beneficial ownership shall be defined and calculated in
accordance with Rule 13d-3, promulgated under the Exchange Act (the
foregoing being herein referred to as the "Limitation on Conversion").
------------------------
d) If pursuant to 1(d) above, Consultant introduces a merger or a
combination of sorts with another entity to the Company, the
Consultant shall be entitled to a finder's fee, and the Company shall
enter into an agreement with the Consultant respecting same.
4. INDEPENDENT CONTRACTOR: It is expressly agreed that Consultant is
acting as an independent contractor in performing its services hereunder.
Company shall carry no workmen's compensation insurance or any health or
accident insurance to cover Consultant. The Company shall not pay any
contributions to social security, unemployment insurance, Federal or State
withholding taxes nor pay any other contributions or benefits, which might be
expected in an employer-employee relationship.
5. ASSIGNMENT: This Agreement and the rights and obligations of the
parties hereunder shall inure to the benefit of and shall be binding upon their
successors and assigns but cannot be assigned by Consultant without prior
written consent of Company.
6. GENERAL PROVISIONS:
a) The Consultant hereby agrees, warrants and covenants that it will
provide to the Company copies of all works product for review, use and
retention as Company sees fit. Consultant further agrees, warrants and
covenants not to utilize or disclose any during the term hereof and
for 12 months thereafter.
b) The Consultant agrees to provide full and accurate disclosure of any
and all equity compensation, which Consultant has received or will
receive under this agreement, whereas required under the Securities
Act of 1933 and the Securities Exchange Act of 1934.
c) Governing Law and Jurisdiction: This agreement shall be governed by
and interpreted in accordance with the laws of the state of Delaware.
Each of the parties hereto consents to such jurisdiction for the
enforcement of this agreement and matters pertaining the transaction
and activities contemplated hereby.
d) Attorney's Fees: In the event a dispute arises with respect to this
agreement, the party prevailing in such dispute shall be entitled to
recover all expenses, including, without limitation, reasonable
attorney's fees and expenses incurred in ascertaining such parties'
rights, in preparing to enforce or in enforcing such parties' right
under this agreement, whether or not it was necessary for such party
to institute suit.
e) Complete Agreement: This Agreement supercedes any and all of the other
agreements, either oral or in writing, between the parties with
respect to such subject matter in any manner whatsoever. Each party to
this agreement acknowledges that no representations, inducements,
promises or agreements, oral or otherwise, have been made by any
party, or anyone herein, and that no other agreement, statement or
promise not contained in this Agreement may be changed or amended only
by an amendment in writing signed by all parties or their respective
successors-in-interest.
f) Binding: This Agreement shall be binding upon and inure to the benefit
of the successor-in-interest, assignees and personal representatives
of the respective parties.
g) Unenforceable Terms: Any provision hereof prohibited by law or
unenforceable under the law of any jurisdiction in which such
provision is applicable shall adhere to such jurisdiction only to be
ineffective without affecting any other provision of this Agreement.
To the full extent, however, that such applicable law may be waived to
the end that this Agreement be deemed to be a valid and binding
agreement enforceable in accordance with its terms, the Parties hereto
hereby waive such applicable law knowingly and understanding the
effect of such waiver.
h) Execution Assurances: This Agreement may be executed in several
counterparts and when so executed shall constitute one agreement
binding on all the parties, notwithstanding that all the Parties are
not signatory to the original and same counterpart.
i) Further Assurances: From time to time each party will execute and
deliver such further instruments and will take such other action as
any other party may reasonably request in order to this charge and
perform their obligations and agreement hereunder and to give effect
to the intentions expressed in this agreement.
j) Miscellaneous Provisions: The various heading and numbers herein and
the grouping of provisions of this agreement in to separate articles
and paragraphs are for the purpose of convenience only and shall be
considered a party hereof. The language in all parts of this agreement
shall in all cases by construed in accordance with its fair meanings
as if prepared by all parties to the agreement and not strictly for or
against any of the parties.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have executed this agreement as of the
day and year first written above.
SPECTRUM SCIENCES &
SOFTWARE HOLDINGS CORP.
By: /s/ Xxxxxxx X. Xxx, Xx. /s/ Xxxxxx Xxxxxxxx
------------------------------------ -----------------------------------
Name: Xxxxxxx X. Xxx, Xx. Xxxxxx Xxxxxxxx
Title: Executive Vice President
