CONSULTING
AGREEMENT
Consulting Agreement (this
“Agreement”), dated as of March 31, 2009 (the
"Effective Date") between Applied Energetics, Inc. (the "Company")
and Stephen W. McCahon (“Consultant”).
1.
Consultant's Services . The Company
hereby engages Consultant to provide to the Company, and Consultant
agrees to provide to the Company under the terms of this Agreement,
business and technical consulting services as requested by the
Company from time to time (hereinafter the "Services") during the
Term (defined below). During the Term, Consultant shall
be available to provide up to forty (40) hours per week of Services
as reasonably requested by, and upon reasonable notice
from, the Company. The Services shall be
performed under the direct supervision of the Board of Directors
and the Chief Executive Officer or such other officer as appointed
by the Board of directors and shall be performed at such times and
places and in such manner (whether by conference, telephone,
electronic communication or otherwise) as the Company shall
reasonably determine (subject to reasonable accommodation as to
scheduling and location). Consultant shall make
reasonable efforts to meet with the Company’s employees,
directors and customers as reasonably requested by the
Company. It is understood and agreed that while serving
as a consultant to the Company hereunder, Consultant may engage in
any business or employment activities in any field either for his
own account or for the account of others subject to the provisions
of Section 3 below.
2.
Term; Compensation; Reimbursement of Expenses .
Consultant shall render the Services during the period
from the Effective Date through March 31, 2010 (the
“Term”); provided that the Term shall automatically
extend on a monthly basis, unless terminated in accordance with
Section 4 below. In exchange for the performance of the
Services, and specifically for the covenants contained in Section 3
hereof, the Company shall pay Consultant (in addition to the
payments set forth in Section 1 hereof), a fee at the rate of
$18,750 per month, payable on or prior to the fifth (5
th ) business day of the following
month. The Company shall report his earnings at year-end
on a Form 1099. In addition, the Company will reimburse
Consultant for business expenses, to the extent such expenses
relate to Consultant’s performance of the Services (and, for
any expense in excess of $1,000, as pre-approved in writing by the
Company), he actually incurs in the performance of the Services
hereunder.
3.
Confidentiality; Noncompetition; nonsolicitation;
nondisparagement .
3.1. The
Company and Consultant acknowledge that the Services to be
performed by Consultant under this Agreement are unique and
extraordinary and, as a result of such engagement, Consultant shall
be in possession of confidential information relating to the
business practices of the Company. The term
“confidential information” shall mean any and all
information (oral and written) relating to the Company or any of
its affiliates, or any of their respective activities, as well as
any distributors, vendors, suppliers, customers or other third
party of which Consultant shall possess in connection with
performing the Services and his prior employment with the Company,
other than such information which (i) can be shown by Consultant to
be in the public domain (such information not being deemed to be in
the public domain merely because it is embraced by more general
information which is in the public domain) other than as the result
of breach of the provisions of this Section 3 or (ii) Consultant is
required to disclose under any applicable laws, regulations or
directives of any government agency, tribunal or authority having
jurisdiction in the matter or under subpoena or other process of
law. Consultant shall not, during the Term and
thereafter, except as may be required in the course of the
performance of his duties hereunder, directly or indirectly, use,
communicate, disclose or disseminate to any person, firm or
corporation any confidential information regarding the clients,
customers or business practices of the Company acquired by
Consultant, without the prior written consent of the Company;
provided , however , that Consultant understands that
Consultant shall be prohibited from misappropriating any trade
secret at any time during or after the Term.
3.2. Upon
the termination of Services under this Agreement for any reason
whatsoever, all documents, records, notebooks, equipment, price
lists, specifications, programs, customer and prospective customer
lists and other materials which refer or relate to any aspect of
the business of the Company which are in the possession of
Consultant, including all copies thereof, shall be promptly
returned to the Company.
3.3. Consultant
hereby agrees that he shall not, during the Term and for a period
of two years after the termination of Services under this
Agreement, directly or indirectly, within any county (or adjacent
county) in any State within the United States or territory outside
of the United States in which the Company is engaged in business
during the Term, engage, have an interest in or render any services
to any business (whether as owner, manager, operator, licensor,
licensee, lender, partner, stockholder, joint venturer, employee,
consultant, advisor or otherwise), other than the Company,
competitive with the Business (as defined below). The
term “Business” means (i) laser guided energy
technologies, (ii) laser induced plasma channel technologies, (iii)
counter-IED technologies, (iv) high voltage laser technologies and
(v) other laser technologies as to which (solely in the use of
clause (vi)) the Company is specifically engaged in (including
through research and development) as of the date of this Agreement.
Notwithstanding the foregoing, nothing herein shall prevent
Consultant from (i) owning stock in a publicly traded corporation
whose activities compete with those of the Company’s,
provided that such stock holdings are not greater than two percent
(2%) of such corporation, or (ii) pursuing any business
opportunities, either as a sole proprietorship, company,
corporation, partnership or other business enterprise, that is not
competitive with the Business.
3.4. Consultant
shall not, during the Term and for a period of two years after the
termination of Services under this Agreement, directly or
indirectly, take any wrongful action which constitutes an
interference with or a disruption of any of the Company’s
business a
