CONSULTING
AGREEMENT
THIS AGREEMENT, made, entered into, and
effective this 16th day of July 2008 (the "Effective Date"), by and
between Frank Lazauskas, an individual resident of
[Redacted] (hereinafter referred to as
"Consultant"), and Spongetech Delivery Systems, Inc., a Delaware
corporation (hereinafter referred to as "Corporation").
W I T N E S S E T
H:
WHEREAS, Consultant has been a valuable employee of the
Corporation and the Corporation realizes that Consultant has
demonstrated a keen understanding of the Corporation’s
operations such that it would be desirable to retain Consultant's
services under a consulting agreement;
WHEREAS, Consultant desires to provide such consulting
services for the Corporation as an independent contractor, with the
understanding that he shall not be required to devote his full time
to the business of the Corporation and shall be free to pursue
other personal and business interests; and
NOW, THEREFORE, in consideration of the premises, the mutual
covenants of the parties herein contained and other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged by each of the parties hereto, it is agreed as
follows:
1.
CONSULTING ARRANGEMENT. The Corporation hereby contracts for the
services of Consultant and Consultant agrees to perform such duties
and responsibilities and to render advice and consulting as may be
requested by the Corporation from time to time during the term of
this consulting arrangement in connection with the Corporation's
business throughout the United States and world wide ("Consulting
Arrangement"). Said consulting services shall include, but not be
limited to, corporate development, providing guidance and advice
with respect to financing arrangements and investor relations.
Consultant shall use his best efforts to keep the Corporation
informed of all corporate business opportunities which shall come
to his attention and appear beneficial to the Corporation's
business so that the Corporation can obtain the maximum benefits
from Consultant's knowledge, experience, and personal
contacts.
2.
RELATIONSHIP BETWEEN PARTIES. During the term of the Consulting Arrangement,
Consultant shall be deemed to be an independent contractor. He
shall be free to devote his time, energy and skill to any such
person, firm or company as he deems advisable except to the extent
he is obligated to devote his time, energy and skill to the
Corporation pursuant to the terms of this Agreement. Consultant
shall not be considered as having an employee status vis-a-vis the
Corporation, or by virtue of the Consulting Arrangement being
entitled to participate in any plans, arrangements or distributions
by the Corporation pertaining to or in connection with any pension,
stock, bonus, profit sharing, welfare benefits, or similar benefits
for the regular employees of the Corporation. The Corporation shall
not withhold any taxes in connection with the compensation due
Consultant hereunder, and Consultant will be responsible for the
payment of any such taxes and hereby agrees to indemnify the
Corporation against nonpayment thereof.
3.
COMPENSATION FOR THE CONSULTING ARRANGEMENT.
As part of the consideration for the
services to be rendered under the Consulting Arrangement by
Consultant and as compensation for the income he could have
otherwise earned if he had not agreed to keep himself available to
the Corporation hereunder, the Corporation shall pay Consultant
compensation at the rate of Two Million (2,000,000) shares of Class
B Stock of the Corporation on July 16, 2008.
In addition, Consultant shall be entitled
to reimbursement for reasonable business expenses up to $5,000 per
annum and insurance coverage for major medical. All compensation
due to Consultant under this Section 3 shall accrue until such time
as the Corporation has sufficient funds therefore.
4.
TERM OF CONSULTING ARRANGEMENT. The Consulting Arrangement shall begin effective
as of the Effective Date of this Agreement and shall continue for a
period of twelve (12) months (the "Consulting Period").
5.
CONFIDENTIALITY COVENANTS.
5.1
Acknowledgments by the Consultant. The Consultant
acknowledges that (a) during the Consulting Period and as a
part of his Consulting Arrangement, the Consultant will be afforded
access to Confidential Information (as defined below);
(b) public disclosure of such Confidential Information could
have an adverse effect on the Corporation and its business;
(c) because the Consultant possesses substantial technical
expertise and skill with respect to the Corporation's business, the
Corporation desires to obtain exclusive ownership of each
Consultant Invention (as defined below), and the Corporation will
be at a substantial competitive disadvantage if it fails to acquire
exclusive ownership of each Consultant Invention; (d) the
provisions of this Section 5 are reasonable and necessary to
prevent the improper use or disclosure of Confidential Information
and to provide the Corporation with exclusive ownership of all
Consultant Inventions.
5.2
Agreements of the Consultant. In consideration of
the compensation and benefits to be paid or provided to the
Consultant by the Corporation under this Agreement, the Consultant
covenants as follows:
(i) During and
following the Consulting Period, the Consultant will hold in
confidence the Confidential Information and will not disclose it to
any person except with the specific prior written consent of the
Corporation or except as otherwise expressly permitted by the terms
of this Agreement.
(ii) Any trade
secrets of the Corporation will be entitled to all of the
protections and benefits under New York State law and any other
applicable law. If any information that the Corporation deems to be
a trade secret is found by a court of competent jurisdiction not to
be a trade secret for purposes of this Agreement, such information
will, nevertheless, be considered Confidential Information for
purposes of this Agreement. The Consultant hereby waives any
requirement that the Corporation submit proof of the economic value
of any trade secret or post a bond or other security.
(iii) None of the
foregoing obligations and restrictions applies to any part of the
Confidential Information that the Consultant demonstrates was or
became generally available to the public other than as a result of
a disclosure by the Consultant.
(iv) The
Consultant will not remove from the Corporation's premises (except
to the extent such removal is for purposes of the performance of
the Consultant's duties at home or while traveling, or except as
otherwise specifically authorized by the Corporation) any document,
record, notebook, plan, model, component, device, or computer
software or code, whether embodied in a disk or in any other form
(collectively, the "Proprietary Items"). The Consultant recognizes
that, as between the Corporation and the Consultant, all of the
Proprietary Items, whether or not developed by the Consultant, are
the exclusive property of the Corporation. Upon termination of this
Agreement by either party, or upon the request of the Corporation
during the Consulting Period, the Consultant will return to the
Corporation all of the Proprietary Items in the Consultant's
possession or subject to the Consultant's control, and the
Consultant shall not retain any copies, abstracts, sketches, or
other physical embodiment of any of the Proprietary
Items.
(b)
Consultant Inventions. Each Consultant Invention will
belong exclusively to the Corporation. The Consultant acknowledges
that all of the Consultant's writing, works of authorship, and
other Consultant Inventions are works made for hire and the
property of the Corporation, including any copyrights, patents, or
other intellectual property rights pertaining thereto. If it is
determined that any such works are not works made for hire, the
Consultant hereby assigns to the Corporation all of the
Consultant's right, title, and interest, including all rights of
copyright, patent, and other intellectual property rights, to or in
such Consultant Inven
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