NEWCARDIO, INC. CONSULTING AGREEMENT
Exhibit 10.25
This
Consulting Agreement ("Agreement") is made and entered into as of the 1st day of
May, 2008 ("Effective Date"), by and between NewCardio, Inc. ("NewCardio" or
"Company"), and JFS Investments ("Consultant"). Company desires to
retain Consultant as an independent contractor to perform consulting services
for Company and Consultant is willing to perform such services, on terms set
forth more fully below. In consideration of the mutual promises
contained herein, the parties agree as follows:
1. SERVICES
AND COMPENSATION
1.1 Statements of
Work. From time to time, Company and Consultant may agree on
certain services to be performed under this Agreement, and in that case, shall
prepare a statement of work in substantially the form set forth in Exhibit A
("Statement of Work"). Each Statement of Work, upon execution by both
of the parties hereto, will be incorporated into this Agreement.
1.2 Services. Consultant
shall perform for Company the services ("Services") described in each Statement
of Work.
1.3 Fees. The
Company shall pay Consultant the compensation set forth in the applicable
Statement of Work for the performance of the Services. Such fees may
be on a time and materials basis, or on a milestone basis, or otherwise as
agreed by the parties.
1.4 Reports. Consultant
also agrees that Consultant will, from time to time during the term of this
Agreement or any extension thereof, keep the Company advised as to Consultant’s
progress in performing the Services under this Agreement. Consultant
further agrees that Consultant will, as requested by the Company, prepare
written reports with respect to such progress. The Company and
Consultant agree that the time required to prepare such written reports will be
considered time devoted to the performance of the Services.
2. CONFIDENTIALITY
2.1 Definition. "Confidential
Information" means any Company proprietary information, technical data, trade
secrets or know-how, including, but not limited to, research, product plans,
products, services, customers, customer lists, markets, software, developments,
inventions, processes, formulas, technology, designs, drawings, engineering,
hardware configuration information, marketing, finances or other business
information disclosed by Company either directly or indirectly in writing,
orally or by drawings or inspection of parts or equipment.
2.2 Non-Use and
Non-Disclosure. Consultant shall not, during or subsequent to
the term of this Agreement, use Company's Confidential Information for any
purpose whatsoever other than the performance of the Services on behalf of
Company or disclose Company's Confidential Information to any third
party. It is understood that said Confidential Information will
remain the sole property of Company. Consultant further shall take
all reasonable precautions to prevent any unauthorized disclosure of such
Confidential Information including, but not limited to, having each employee of
Consultant, if any, with access to any Confidential Information, execute a
nondisclosure agreement containing provisions in Company's favor on terms no
less restrictive than those set forth herein. Confidential
Information does not include information which: (1) is known to Consultant
at the time of disclosure to Consultant by Company, as evidenced by written
records of Consultant; (2) has become publicly known and made generally
available through no wrongful act of Consultant; or (3) has been rightfully
received by Consultant from a third party who is authorized to make such
disclosure. Without Company's prior written approval, Consultant
shall not directly or indirectly disclose to anyone the existence of this
Agreement or the fact that Consultant has this arrangement with
Company.
2.3 Former Employer's or
Client's Confidential Information. Consultant agrees that
Consultant shall not, during the term of this Agreement, improperly use or
disclose any proprietary information or trade secrets of any former or current
employer or other person or entity with which Consultant has an agreement or
duty to keep in confidence information acquired by Consultant, if any, and that
Consultant shall not bring onto the premises of Company any unpublished document
or proprietary information belonging to such employer, person or entity unless
consented to in writing by such employer, person or
entity. Consultant shall indemnify and hold Company harmless from and
against all claims, liabilities, damages and expenses, including reasonable
attorneys fees and costs of suit, arising out of or in connection with any
violation or claimed violation of a third party's rights resulting in whole or
in part from Company's use of the work product of Consultant under this
Agreement.
2.4 Third Party Confidential
Information. Consultant recognizes that Company has received
and in the future will receive from third parties their confidential or
proprietary information subject to a duty on Company's part to maintain the
confidentiality of such information and to use it only for certain limited
purposes. Consultant agrees that Consultant owes Company and such
third parties, during the term of this Agreement and thereafter, a duty to hold
all such confidential or proprietary information in the strictest confidence and
not to disclose it to any person, firm or corporation or to use it except as
necessary in carrying out the Services for Company consistent with Company's
agreement with such third party.
2.5 Return of
Materials. Upon the termination of this Agreement, or upon
Company's earlier request, Consultant shall deliver to Company all of Company's
property or Confidential Information that Consultant may have in Consultant's
possession or control.
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3. OWNERSHIP
3.1 Assignment. Consultant
agrees that all copyrightable material, notes, records, drawings, designs,
inventions, improvements, developments, discoveries and trade secrets conceived,
made or discovered by Consultant, solely or in collaboration with others, during
the term of this Agreement which relate in any manner to the business of Company
that Consultant may be directed to undertake, investigate or experiment with, or
which Consultant may become associated with in work, investigation or
experimentation in the line of business of Company in performing the Services
hereunder (collectively, "Work Product"), are the sole property of
Company. Consultant further shall assign (or cause to be assigned)
and does hereby assign fully to Company all Work Product and any copyrights,
patents, mask work rights or other intellectual property rights relating
thereto.
3.2 Further
Assurances. Consultant shall assist Company, or its designee,
at Company's expense, in every proper way to secure Company's rights in the Work
Product and any copyrights, patents, mask work rights or other intellectual
property rights relating thereto in any and all countries, including the
disclosure to Company of all pertinent information and data with respect
thereto, the execution of all applications, specifications, oaths, assignments
and all other instruments that Company deems necessary in order to apply for and
obtain such rights and in order to assign and convey to Company, its successors,
assigns and nominees the sole and exclusive right, title and interest in and to
such Work Product, and any copyrights, patents, mask work rights or other
intellectual property rights relating thereto. Consultant further
agrees that Consultant's obligation to execute or cause to be executed, when it
is in Consultant's power to do so, any such instrument or papers will continue
after the termination of this Agreement.
3.3 Pre-Existing
Materials. Consultant agrees that if in the course of
performing the Services, Consultant incorporates into any Invention developed
hereunder any invention, improvement, development, concept, discovery or other
proprietary information owned by Consultant or in which Consultant has an
interest, (1) Consultant shall inform Company, in writing before
incorporating such invention, improvement, development, concept,
discovery or other proprietary information into any Invention; and (2) Company
is hereby granted and shall have a nonexclusive, royalty-free, perpetual,
irrevocable, worldwide license to make, have made, modify, use and sell such
item as part of or in connection with such Invention. Consultant
shall not incorporate any invention, improvement, development, concept,
discovery or other proprietary information owned by any third party into any
Invention without Company's prior written permission.
3.4 Attorney in
Fact. Where Company is unable because of Consultant's
unavailability, dissolution, mental or physical incapacity, or for any other
reason, to secure Consultant's signature to apply for or to pursue any
application for any United States or foreign patents or mask work or copyright
registrations covering the Work Product assigned to Company above, then
Consultant hereby irrevocably designates and appoints Company and its duly
authorized officers and agents as Consultant's agent and attorney in fact, to
act for and in Consultant's behalf and stead to execute and file any such
applications and to do all other lawfully permitted acts to further the
prosecution and issuance of patents, copyright and mask work registrations
thereon with the same legal force and effect as if executed by
Consultant.
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3.5 Warranty. Consultant
hereby represents and warrants that: (1) all Work Product will be the original
work of Consultant; (2) the Work Product will not infringe the copyright,
patent, trade secret, or any other intellectual property right of any third
party; (3) the Work Product will not be obscene, libelous, or violate the right
of privacy or publicity of any third party; (4) the Work Product will not
contain any virus, trap door, worm, or any other device that is injurious or
damaging to software or hardware used in conjunction with the Work Product; (5)
any software or data portions of the Work Product will operate correctly and
consistently upon dates occurring on or after January 1, 2000; and (6) Company
shall retain and own all right, title and interest in and to all Work Product
and any information delivered and/or shared hereunder.
4. CONFLICTING
OBLIGATIONS
4.1 Consultant
certifies that Consultant has no outstanding agreement or obligation that is in
conflict with any of the provisions of this Agreement, or that would preclude
Consultant from complying with the provisions hereof, and further certifies that
Consultant will not enter into any such conflicting agreement during the term of
this Agreement.
4.2 Substantially Similar
Designs. In
view of Consultant’s access to the Company’s trade secrets and proprietary
know-how, Consultant agrees that Consultant will not, without the Company’s
prior written approval, design identical or substantially similar designs as
those developed under this Agreement for any third party during the term of this
Agreement and for a period of 12 months after the termination of this Agreement.
Consultant acknowledges that the obligations in this Section 4 are
ancillary to Consultant’s nondisclosure obligations under Section
2.
5. TERM
AND TERMINATION
5.1 Term. This
Agreement will commence on the Effective Date and will continue until the
earlier of: (1) final completion of the Services, (2) the 12 month
anniversary of the Effective Date, or (3) termination as provided
below.
5.2 Termination. Either
party may terminate this Agreement or any Statement of Work without cause upon
giving one month’s prior written notice thereof to the other party in accordance
with Section 6.4 of this Agreement. If a party terminates this Agreement
under the prior sentence, Company shall pay to Consultant the fees (i.e.
including any vested shares and warrants) for any Services performed before the
effective date of termination on a time and materials basis. The
terms of exercise/sale remain governed by the Statement of Work, Exercise
Limitation in Compensation (7).
(a)
Company may terminate this Agreement immediately and without prior notice if
Consultant refuses to or is unable to perform the Services, and either party may
terminate this Agreement immediately and without prior written notice if the
other party is in breach of any material provision of this
Agreement.
5.3 Survival. Upon
such termination all rights and duties of the parties toward each other will
cease except:
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a.
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Company
shall pay, within 30 days after the effective date of termination, all
amounts owing to Consultant for Services completed and accepted by Company
prior to the termination date and related expenses, if any, in accordance
with the provisions of Section 1 (Services and Compensation);
and
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b.
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Sections 2
(Confidentiality), 3 (Ownership), 4 (Conflicting Obligations),
6 (Miscellaneous), and 7 (Arbitration and Equitable Relief) will
survive termination of this
Agreement.
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6. MISCELLANEOUS
6.1 Services and Information
Prior to Effective Date. All Services performed by Consultant
and all information and other materials disclosed between the parties prior to
the Effective Date shall be governed by the terms of this Agreement, except
where those Services are covered by a separate consulting agreement between
Consultant and Company.
6.2 Nonassignment/Binding
Agreement. The parties acknowledge that the unique nature of
Consultant's services is substantial consideration for the parties' entering
into this Agreement. Neither this Agreement nor any rights under this
Agreement may be assigned or otherwise transferred by Consultant, in whole or in
part, whether voluntarily or by operation of law, without the prior written
consent of Company, which consent will not be unreasonably
withheld. Subject to the foregoing, this Agreement will be binding
upon and will inure to the benefit of the parties and their respective
successors and assigns. Any assignment in violation of the foregoing will be
null and void.
6.3 Nonsolicitation. From
the date of this Agreement until 12 months after the termination of this
Agreement (the “Restricted Period”), Consultant will not, without the Company’s
prior written consent, directly or indirectly, solicit or encourage any employee
or contractor of the Company or its affiliates to terminate employment with, or
cease providing services to, the Company or its affiliates. During
the Restricted Period, Consultant will not, whether for Consultant’s own account
or for the account of any other person, firm, corporation or other business
organization, intentionally interfere with any person who is or during the
period of Consultant’s engagement by the Company was a partner, supplier,
customer or client of the Company or its affiliates.
6.4 Indemnity. Consultant
agrees to indemnify and hold harmless the Company and its directors, officers
and employees from and against all taxes, losses, damages, liabilities, costs
and expenses, including attorneys’ fees and other legal expenses, arising
directly or indirectly from or in connection with (i) any negligent,
reckless or intentionally wrongful act of Consultant or Consultant’s assistants,
employees or agents, (ii) a determination by a court or agency that the
Consultant or any of Consultant’s assistants, employees or agents is not an
independent contractor with respect to the Company, (iii) any breach by the
Consultant or Consultant’s assistants, employees or agents of any of the
covenants contained in this Agreement, (iv) any failure of Consultant to
perform the Services in accordance with all applicable laws, rules and
regulations, or (v) any violation or claimed violation of a third party’s
rights resulting in whole or in part from the Company’s use of the work product
of Consultant under this Agreement.
6.5 Notices. Any
notice required or permitted under the terms of this Agreement or required by
law must be in writing and must be (a) delivered in person,
(b) sent by first class registered mail, or air mail, as appropriate, or
(c) sent by overnight air courier, in each case properly posted and fully
prepaid to the appropriate address as set forth in this
Agreement. Either party may change its address for notices by notice
to the other party given in accordance with this Section. Notices
will be deemed given at the time of actual delivery in person, three (3)
business days after deposit in the mail as set forth above, or one (1) day after
delivery to an overnight air courier service.
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6.6 Waiver. Any
waiver of the provisions of this Agreement or of a party's rights or remedies
under this Agreement must be in writing to be effective. Failure,
neglect, or delay by a party to enforce the provisions of this Agreement or its
rights or remedies at any time, will not be construed as a waiver of such
party's rights under this Agreement and will not in any way affect the validity
of the whole or any part of this Agreement or prejudice such party's right to
take subsequent action. No exercise or enforcement by either party of any right
or remedy under this Agreement will preclude the enforcement by such party of
any other right or remedy under this Agreement or that such party is entitled by
law to enforce.
6.7 Severability. If
any term, condition, or provision in this Agreement is found to be invalid,
unlawful or unenforceable to any extent, the parties shall endeavor in good
faith to agree to such amendments that will preserve, as far as possible,
the intentions expressed in this Agreement. If the parties fail to
agree on such an amendment, such invalid term, condition or provision will be
severed from the remaining terms, conditions and provisions, which will continue
to be valid and enforceable to the fullest extent permitted by law.
6.8 Integration. This
Agreement and all Statements of Work contain the entire agreement of the parties
with respect to the subject matter of this Agreement and supersedes all previous
communications, representations, understandings and agreements, either oral or
written, between the parties with respect to said subject matter. No
terms, provisions or conditions of any purchase order, acknowledgement or other
business form that either party may use in connection with the transactions
contemplated by this Agreement will have any effect on the rights, duties or
obligations of the parties under, or otherwise modify, this Agreement,
regardless of any failure of a receiving party to object to such terms,
provisions or conditions. This Agreement may not be amended, except
by a writing signed by both parties.
6.9 Confidentiality of
Agreement. Consultant shall not disclose any terms of this
Agreement to any third party if such disclosure is without the consent of
Company, except as required by securities or other applicable laws.
6.10 Counterparts. This
Agreement may be executed in counterparts, each of which so executed will
be deemed to be an original and such counterparts together will constitute
one and the same agreement.
6.11 Governing
Law. This Agreement will be interpreted and construed in
accordance with the laws of the State of California and the United States of
America, without regard to conflict of law principles.
6.12 Independent
Contractor. It is the express intention of the parties that
Consultant is an independent contractor. Nothing in this Agreement,
including the election of the Rules in the arbitration provision, will in any
way be construed to constitute Consultant as an agent, employee or
representative of Company, but Consultant shall perform the Services hereunder
as an independent contractor. Without limiting the generality of the
foregoing, Consultant is not authorized to bind the Company to any liability or
obligation or to represent that Consultant has any such
authority. Consultant shall furnish (or reimburse Company for) all
tools and materials necessary to accomplish this contract, and will incur all
expenses associated with performance, except as expressly provided on the
applicable Statement of Work. Consultant acknowledges and agrees that
Consultant is obligated to report as income all compensation received by
Consultant pursuant to this Agreement, and Consultant acknowledges its
obligation to pay all self-employment and other taxes thereon.
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6.13 Benefits. Consultant
acknowledges that Consultant will receive no Company-sponsored benefits from
Company either as a Consultant or employee, where benefits include without
limitation paid vacation, sick leave, medical insurance, and 401K
participation. If Consultant is reclassified by a state or federal
agency or court as an employee, Consultant will become a reclassified employee
and will receive no benefits except those mandated by state or federal law, even
if by the terms of Company's benefit plans in effect at the time of such
reclassification Consultant would otherwise be eligible for such
benefits.
6.14 Attorney's
Fees. In any court action at law or equity which is brought by
one of the parties to enforce or interpret the provisions of this Agreement, the
prevailing party will be entitled to reasonable attorney's fees, in addition to
any other relief to which that party may be entitled.
7. ARBITRATION
AND EQUITABLE RELIEF
7.1 Arbitration. In
consideration of Consultant’s consulting relationship with NewCardio, Inc. (the
“Company”), its promise to arbitrate all disputes related to Consultant’s
consulting relationship with the Company and Consultant’s receipt of the
compensation, pay raises and other benefits paid to Consultant by Company, at
present and in the future, Consultant agrees that any and all controversies,
claims, or disputes with anyone (including Company and any employee, officer,
director, shareholder or benefit plan of the Company in their capacity as such
or otherwise) arising out of, relating to, or resulting from Consultant’s
consulting relationship with the Company or the termination of Consultant’s
consulting relationship with the Company, including any breach of this
Agreement, shall be subject to binding arbitration under the Arbitration Rules
set forth in California Code of Civil Procedure Section 1280 through 1294.2,
including section 1281.8 (the "Rules") and pursuant to California
law. Disputes which
Consultant agrees to arbitrate, and thereby agrees to waive any right to a trial
by jury, include any statutory claims under state or federal law,
including, but not limited to, claims under Title VII of the Civil Rights Act of
1964, the Americans with Disabilities Act of 1990, the Age Discrimination in
Employment Act of 1967, the Older Workers Benefit Protection Act, the California
Fair Employment and Housing Act, the California Labor Code, claims of
harassment, discrimination or wrongful termination and any statutory
claims. Consultant further understands that this Agreement to
arbitrate also applies to any disputes that the Company may have with
Consultant.
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7.2 Procedure. Consultant
agrees that any arbitration will be administered by JAMS pursuant to its
Comprehensive Arbitration Rules & Procedures (the “JAMS
Rules”). Consultant agrees that the arbitrator shall have the power
to decide any motions brought by any party to the arbitration, including motions
for summary judgment and/or adjudication and motions to dismiss and demurrers,
prior to any arbitration hearing. Consultant agrees that the
arbitrator shall issue a written decision on the merits. Consultant
also agrees that the arbitrator shall have the power to award any remedies,
including attorneys' fees and costs, available under applicable
law. Consultant agrees that the arbitrator shall administer and
conduct any arbitration in a manner consistent with the Rules, including the
California Code of Civil Procedure, and that the arbitrator shall apply
substantive and procedural California law to any dispute or claim, without
reference to rules of conflict of law. To the extent that the JAMS
Rules conflict with California law, California law shall take
precedence. Consultant further agrees that any arbitration under this
agreement shall be conducted in Santa ▇▇▇▇▇ County, California.
7.3 Remedy. Except
as provided by the Rules, arbitration shall be the sole, exclusive and final
remedy for any dispute between Consultant and the
Company. Accordingly, except as provided for by the Rules, neither
Consultant nor the Company will be permitted to pursue court action regarding
claims that are subject to arbitration. Notwithstanding, the
arbitrator will not have the authority to disregard or refuse to enforce any
lawful Company policy, and the arbitrator shall not order or require the Company
to adopt a policy not otherwise required by law which the Company has not
adopted.
7.4 Availability of Injunctive
Relief. In accordance with Rule 1281.8 of the California Code
of Civil Procedure, Consultant agrees that any party may also petition the court
for injunctive relief where either party alleges or claims a violation of any
agreement regarding trade secrets, confidential information, nonsolicitation or
Labor Code §2870. In the event either party seeks injunctive relief,
the prevailing party shall be entitled to recover reasonable costs and
attorneys’ fees.
7.5 Administrative
Relief. Consultant understands that this Agreement does not
prohibit Consultant from pursuing an administrative claim with a local, state or
federal administrative body such as the Department of Fair Employment and
Housing, the Equal Employment Opportunity Commission, the National Labor
Relations Board, or the workers’ compensation board. This Agreement
does, however, preclude Consultant from pursuing court action regarding any such
claim.
7.6 Voluntary Nature of
Agreement. Consultant acknowledges and agrees that he/she is
executing this Agreement voluntarily and without any duress or undue influence
by the Company or anyone else. Consultant further acknowledges and
agrees that he/she has carefully read this Agreement and that Consultant has
asked any questions needed for Consultant to understand the terms, consequences
and binding effect of this Agreement and fully understand it, including that
Consultant is waiving his/her
right to a jury trial. Finally, Consultant agrees that he/she
has been provided an opportunity to seek the advice of an attorney of
Consultant’s choice before signing this Agreement.
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The
parties have executed this Agreement below to indicate their acceptance of its
terms.
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JFS
Investments
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By: /s/ ▇▇▇▇▇▇
▇▇▇▇▇▇▇
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By:
/s/ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
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Print
Name: ▇▇▇▇▇▇
▇▇▇▇▇▇▇
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Print
Name: ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
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Title:
Chairman
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Title:
Chief Financial
Officer
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Date:
May 21,
2008
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Date:
May 21,
2008
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Address:
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▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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Tax
ID:
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▇▇-▇▇▇▇▇▇▇
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EXHIBIT
A
FORM
STATEMENT OF WORK
Services
to be performed by Consultant:
Consultant
will develop, implement and maintain an ongoing stock market support system for
NewCardio with the general objective of expanding awareness in the investment
community. Services include: 1) professional investment community awareness and
2) public market incite.
Compensation:
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1.
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Cash:
$8,000/ month. The first payment would start upon signing the
contract.
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2.
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50,000 restricted shares of
NewCardio common stock, vesting 12,500 per month each month following the
execution date of the
Agreement.
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3.
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250,000 three year warrants to
purchase NewCardio common struck at $2.00/share and 250,000 three year
warrants to purchase NewCardio common stock at $4.00/share. The warrants
would vest equally over 12 months each month following the date of grant
which shall coincide with the execution date of the
Agreement.
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4.
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The warrants are to be cashless
exercise unless the underlying common stock is registered under any form
of registration. In addition if the company changes control or goes thru a
major structural realignment, all the shares and warrants shall vest
immediately.
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5.
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JFS will deliver instructions to
the Company to designate the Shares and Warrants to certain employees and
affiliates and the Company shall deliver the Shares and Warrants pursuant
to JFS’s instructions, upon execution of this
Agreement.
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6.
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Expenses: discretionary expenses,
without prior written approval, are authorized up to $500 per month,
followed with a detailed expense report on a monthly basis. Anything above
$500 per month requires prior approval (email is acceptable) by NewCardio.
This will allow appropriate entertainment to spread the
story.
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7.
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Exercise
limitations:
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a.
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Vested options and warrants may
be exercised and/or sold subject to certain trading volume limitations.
The average trading volume of NewCardio’s common stock for the 20 trading
days prior to the exercise/sales notice must exceed $250,000.00 or the
shares/warrants remain subject to this
lock-up.
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b.
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There are currently 72 holders of
record as of the filing of NewCardio’s first quarter 2008 SEC Form 10-Q on
May 15, 2008. The lock-up on exercise and sale remains in place
until the number of shareholders of record increases by 328, and that
minimum remains in place at the time of exercise/sales notice by
consultant.
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JFS
Investments
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By: /s/ ▇▇▇▇▇▇
▇▇▇▇▇▇▇
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By:
/s/ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
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Print
Name: ▇▇▇▇▇▇
▇▇▇▇▇▇▇
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Print
Name: ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
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Title:
Chairman
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Title:
Chief Financial
Officer
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Date:
May 21,
2008
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Date:
May 21,
2008
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