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CONSULTING AGREEMENT
This
CONSULTING AGREEMENT, dated as of this 12th day of May 2008
(the “Effective Date”), is between Document
Security Systems, Inc. (the “Company”) and Peter
Ettinger (“Consultant”).
R
E C I T A L S:
WHEREAS,
the Company has agreed to retain Consultant to provide
professional and advisory services and consultation as more
fully described below, and Consultant is willing to provide
such services on the terms and for the consideration set out
below.
NOW,
THEREFORE, in consideration of the foregoing and the mutual
promises contained herein, and for other good and valuable
consideration, the receipt and adequacy of which is hereby
acknowledged, it is hereby agreed as follows:
SECTION
1.
Appointment .
The Company hereby appoints Consultant and Consultant hereby agrees
to serve the Company in the capacity of a consultant to the
Company. Consultant’s appointment shall commence on May 12,
2008 and shall terminate on May 11, 2009 (the “Initial
Term”). If this Agreement shall continue to be in full force
and effect as of the expiration date of the Initial Term, and there
shall not be existing a default under this Agreement as of the
expiration of the Initial Term, this Agreement shall automatically
continue for successive periods of one (1) year each (each an
“Additional
Renewal Term ”
and together with the Initial Term the “Term”), unless
terminated by either party hereto upon written notice to the other
at least thirty (30) days prior to the expiration of the Initial
Term or the then-current Additional Renewal Term, as applicable.
This Agreement and the consulting arrangement described herein may
only be terminated by prior to the end of the Term if: (i) a party
hereto materially breaches any of its material obligations under
this Agreement, (ii) the non-breaching party is given written
notice of such a breach, and such breach is not reasonably cured
within thirty (30) days of such notice.
SECTION
2.
Duties .
During the Term, Consultant shall provide the Services (as
described below in Section 4) to the Company, during normal
business hours, as and when reasonably requested by the Company
from time to time and at such times as are mutually agreeable (by
telephonic conference if reasonably acceptable to the Company).
Consultant’s services hereunder may only be requested and
supervised by the Company’s CEO or his written designee or
successor. In no event shall Consultant be deemed, or be obligated
to perform duties as a manager or executive of the Company or any
of its subsidiaries, although he shall be reasonably available to
provide the assistance hereunder, as provided in Section
3
.
SECTION
3.
Time Spent; Office; Equipment .
At the request of the Company, Consultant shall be reasonably
available to provide Services during the Term, at such times
determined by mutual agreement of the parties. The
Company shall not provide Consultant with an office nor any other
equipment, materials, and supplies, unless the parties otherwise
mutually agree.
SECTION
4.
Services .
(a)
During
the Term, Consultant may represent the Company as provided in
this Section 4 in order to sell the products and services of
the Company.
(b)
Consultant
and the Company agree to use commercially reasonable efforts
to sell products and services of the Company, either directly
through the efforts of Consultant individually or through a
mutually agreeable entity that Consultant is an employee or
principal.
(c)
Unless
otherwise agreed to in writing by the Company, Consultant
shall be solely responsible for all costs and expenses of any
kind directly or indirectly incurred by Consultant. The
Company agrees to reimburse Consultant for reasonable,
documented costs incurred and paid by Consultant upon the
consummation of a sale of products or services of the Company
that was the result of the direct efforts of Consultant;
provided, however, that such reimbursement of expenses shall
not exceed 5% of the net profit of the Company on such sale of
products or services.
(d)
All
sales of the products and services of the Company made
pursuant to this Agreement shall be on terms and conditions
that are acceptable to the Company in its sole
discretion.
(e)
Notwithstanding
anything to the contrary contained herein, Consultant shall
not make any material contacts with any potential purchasers
of the Company’s products or services without the prior
written consent of the Company. Consultant shall clearly
inform any such potential purchaser that he is acting in the
capacity of a consultant to the Company and is not an officer
or director of the Company.
(f)
Except
as provided in Section 4(g) below or as otherwise agreed in
writing by the parties hereto, Consultant shall receive a 15%
commission of the net profit on (i) all sales of products or
services of the Company that are consummated during the Term
as a direct result of the efforts of Consultant during the
Term and (ii) all sales of products or services of the Company
that are consummated during or after the Term as a result of
an agreement entered into by the Company during the Term as a
direct result of the efforts of Consultant during the Term.
For clarification purposes and without limiting the foregoing,
Consultant shall not be entitled to any commission,
remuneration or reimbursement of expenses for sales of
products of services of the Company that are a result of
efforts of Consultant or others that occurred prior to the
Term or after the Term.
(g)
The
Company and Consultant acknowledge and agree that,
notwithstanding provisions to the contrary contained herein,
Consultant shall be entitled to continue to work with those
existing potential clients of the Company listed below in
Section 4(g)(i) (collectively, the “Existing Potential
Clients”) on a non-exclusive basis during the Term. Any
sales by Consultant of the products or services of the Company
to any of the Existing Potential Clients shall entitle
Consultant to a 5% commission of the net profit on (i) all
sales of products or services of the Company that are
consummated during the Term as a direct result of the efforts
of Consultant during the Term and (ii) all sales of products
or services of the Company that are consummated during or
after the Term as a result of an agreement entered into by the
Company during the Term as a direct result of the efforts of
Consultant during the Term.
(i)
The
Existing Potential Clients shall consist of:
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(A)
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Indra
Sistemas S.A. and all entities affiliated with Indra Sistemas
and/or its current officers and directors;
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(B)
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The
country of Morocco;
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(C)
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International
Barcode Corporation, d/b/a BTI Technologies (“BTI”);
provided, however, that Consultant shall not be entitled to any
commission in connection with a license agreement or similar
agreement entered into between the Company and BTI’s licensee
in the Philippines that have been substantially negotiated as of
the Effective Date.
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(D)
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Licensees
of BTI in France, and all entities affiliated with such licensees
and/or its current officers and directors that Consultant has had
meaningful discussions with prior to the Term.
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(h)
The
Company acknowledges that Consultant believes that he or
entities affiliated with Consultant have strong ties in the
operation and management of airports and maritime ports in
South America, Central America, Europe and Australia and that
contacts that may derive from such introductions may lead to
licensing and other commerc
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