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11
CONSULTING AGREEMENT
CONSULTING AGREEMENT (this "Agreement") dated as of April 1,
2006,
between Turbodyne Technologies, Inc., (the "Company"), a Nevada
corporation, and
Stamford Research LLC, a New Mexico limited liability company
("Consultant").
INTRODUCTION
WHEREAS, the Company is having financial and operational
difficulties
and desires to engage a Consultant to assist it with various
functions as
requested by the Company from time to time , including but not
limited to
providing Albert Case ("Designated Consulting Executive") to act as
chief
executive officer ("CEO") and president of the Company or such
other substituted
executive position or positions as determined by the "Senior
Officer", as
hereinafter defined, or the Board of Directors of the Company
("Other Executive
Positions") ;
WHEREAS, Consultant, directly, or through Designated Consulting
Executive, has experience in the business of the Company and
Designated
Consulting Executive is qualified to fulfill the roles of CEO and
president or
Other Executive Positions and desires to render consulting and
advisory services
to the Company and to provide the services of Designated Consulting
Executive as
CEO and president of the Company or Other Executive Positions (the
"Services");
NOW, THEREFORE, in consideration of the premises, the mutual
agreements
herein set forth and other good and valuable consideration, the
receipt and
adequacy of which are hereby acknowledged, the parties agree as
follows:
AGREEMENT
1. EFFECTIVENESS; RETENTION OF CONSULTANT; SERVICES TO BE
PERFORMED
(a) Effective as of the date of this Agreement the Company
engages Consultant to provide the Services during the Term (as
defined in
paragraph 3) including the services of Designated Consulting
Executive as CEO or
in Other Executive Positions and Consultant hereby accepts such
engagement and
agrees to perform the Services for the Company upon the terms and
conditions set
forth in this Agreement including making Designated Consulting
Executive
available, as CEO (or Other Executive Positions) and the person who
will be the
primary employee of Consultant assigned to discharge the duties and
obligations
of Consultant hereunder. During the Term (as defined in Paragraph
3), Consultant
shall cause Designated Consulting Executive to devote such
attention on a
substantially full time basis to perform the services required by
this
Agreement.
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(b) Designated Consulting Executive, by executing this
Agreement, shall assume and perform the Services to the best of his
ability and
agrees to be bound by all the terms and conditions applicable to
him including,
but not limited, to the provisions of paragraph 6 and 7 and further
agrees
individually to serve as CEO or in Other Executive Positions and/or
director of
Company and any subsidiary if elected during the Term.
(c) Consultant shall perform the services hereunder at such
locations as are reasonably necessary for Consultant to perform his
duties under
this Agreement.
(d) Through the date of this Agreement Consultant was engaged
by the Company (and provided the services of Designated Consulting
Executive)
pursuant to a Consulting Agreement between Consultant and Aspatuck
Holdings
Nevada Inc., dated September 1, 2005 ( "the Prior Agreement."). The
parties
agree that the Prior Agreement shall terminate without any
liability and neither
the Company, Designated Consulting Executive or any party to such
agreement such
have obligation thereunder except as set forth in paragraph 6
thereof.
(e) "Senior Officer" shall refer to Jason Meyers and his
designees who are officers of the Company.
2. INDEPENDENT CONTRACTOR. In rendering services hereunder,
Consultant
shall be acting as an independent contractor, providing its own
tools of the
trade, workspace and managing its own hours of work as determined
by Consultant
to fulfill the engagement, and not as an employee or agent of the
Company.
Nothing contained in this Agreement shall be construed or applied
to create a
partnership. Consultant shall be responsible for the payment of all
federal,
state or local taxes payable with respect to all amounts paid to
Consultant
under this Agreement; provided, however, that if the Company is
determined to be
liable for collection and/or remittance of any such taxes,
Consultant shall
immediately reimburse the Company for all such payments made by the
Company.
3. TERM. Unless terminated at an earlier date in accordance with
paragraph
7, this Agreement or substituted Employment Agreement shall
terminate on
February 29, 2009 (the "Term").
4. COMPENSATION.
(a) As compensation for Consultant's services hereunder, the
Company will pay Consultant a cash fee of not less than $288,000,
or $96,000 per
annum .This amount shall be paid in monthly installments of $8,000
of which
$4,000 shall be payable by wire transfer on the first day of each
month during
the term and $4,000 payable by wire transfer on the fifteenth
(15th) day of the
month;
(b) It is agreed that the cash compensation portion of the
Agreement
shall be re-negotiated from time to time as the financial picture
of the Company
improves, and at such time as there are three (3) outside directors
and/or a
compensation committee of the Board of Directors of the Company,
but in no event
shall be less than the Minimum compensation stated above.
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(c) As additional consideration hereunder Consultant shall
receive
Warrants (the "Warrants") to purchase 19,200,000 of shares of the
common stock
of the Company (the "Shares") at an exercise price of $ 0.0117 per
share. Such
warrants shall "vest" and may be exercised in accordance with the
following
schedule:
i Warrants to purchase 6,400,000 Shares shall be
"service based" and at the end of each month that the
Designated Consulting Executive has provided services
hereunder or pursuant to the Employment Agreement as
hereinafter defined 1/36th of such Shares shall vest.
ii. Warrants to purchase 6,400,000 Shares shall be
"revenue based" and shall vest in their entirety upon
filing of a report with the Securities & Exchange
Commission containing reviewed or audited statements
reflecting the recognition of revenue for the first
sale of a production model of a Company product after
the date hereof provided payment is made therefore
and the product is not returned and provided further
such sale occurs during the period that the
Designated Consulting Executive has provided services
hereunder or pursuant to the Employment Agreement.
iii. Warrants to purchase 6,400,000 Shares shall vest
in their entirety upon filing of a report with the
Securities & Exchange Commission containing reviewed
or audited statements reflecting EBITA or earnings
before taxes,interest or amortization , of $1,000,000
and provided further such sale occurs during the
period that the Designated Consulting Executive has
provided services hereunder or pursuant to the
Employment Agreement.
(d) The Warrants , in addition to term set forth above,
shall have a term of seven (7 ) years, contain no price anti
dilution provision
and contain such other terms and provisions as may be customary in
the
reasonable opinion of counsel to the Company for securities of this
type.
(e) The number of Shares subject to the Warrants shall
increase to the extent any additional Shares are issued in
connection with or
relating in any manner to events or transactions prior to September
9, 2005
including Shares issued to obtain funds to satisfy any pre
September 9, 2005
obligation and Shares issued upon exercise or conversion of
warrants or
convertible securities issued for such purpose.
5 EXPENSES. Consultant shall be reimbursed in accordance with the
policies and
procedures that the Company establishes from time to time, for all
reasonable
and necessary out-of-pocket expenses that Consultant incurs in
performing the
services hereunder, including, without limitation, reasonable
travel expenses
incurred by Consultant.
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6 PROTECTION OF TRADE SECRETS, KNOW-HOW AND/OR OTHER CONFIDENTIAL
INFORMATION OF
THE COMPANY.
(a) Except as specifically permitted or directed by the Senior
Officer in writing or inconnection with the business of the Company
to a person
executing a confidentiality agreement containing terms similar to
paragraph 6(a)
and (f) Consultant shall not divulge, furnish or make accessible to
anyone or
use in any way (other than in accordance with the provisions herein
or the
written policies of the Company) any confidential or secret
knowledge or
information of the Company that Consultant has acquired or become
acquainted
with during engagement by the Company or any affiliated companies
prior to the
Term or will that he may acquire or become acquainted with during
the Term,
whether developed by Consultant or by others, concerning any trade
secrets or
confidential information. Trade Secrets and Confidential
Information shall refer
to any and all trade secrets and confidential information ,
including but not
limited to all confidential or secret designs, processes, formulae,
products or
future products, plans, devices or material (whether or not
patented or
patentable) directly or indirectly related in any aspect of the
business of the
Company, any customer or supplier lists of the Company, any
confidential or
secret development or research work of the Company, or any other
confidential
information or secret aspects of the business of the Company
("Company
Confidential Information")
(b) . It is agreed that all materials produced for the Company
by
Consultant, including any data collected or information produced
for Company by
Consultant as well as Software, tools and other instrumentation or
intellectual
property, or other inventions ( individually and collectively"
Company
Intellectual Property"), created by Consultant during and/or as a
result of the
engagement hereunder or the Prior Agreement, and irrespective of
whether the the
"tools of the trade" as defined in paragraph 6 (d) were utilized in
connection
with any Company Intellectual Property, shall be the property of
the Company,
free and clear of all claims thereto by the Company, and the
Consultant shall
retain no claim of authorship therein. and all rights therein of
Consultant , if
any, are hereby assigned to the Company irrespective of whether
such works
constitute works for hire". At the request of the Company
Consultant shall
execute such documents as the Company may desire to evidence or
effect its
ownership in the Company Intellectual Property. All Company
Intellectual
Property , shall also be deemed Company Confidential Information
and subject as
such to the provisions of this Agreement relating to such
information.
(c) Upon termination of this Agreement, Consultant shall deliver
to
the Company all property that is in his possession and that is the
Company's
property or relates to the Company's business, including, but not
limited to
records, notes, data, memoranda, software, electronic information,
models,
equipment, and any copies of the same. Consultant shall permanently
delete all
of his electronic data containing such property
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(d) Consultant may, from time to time, during the engagement,
use
pro
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