CONSULTING AGREEMENT
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This CONSULTING AGREEMENT (this "Agreement"), made and entered into as
of the 15th day of May, 2000, is by and between Steven J. Ross ("Consultant"),
TekInsight.com, Inc., a Delaware Corporation (the "Company") and BugSolver.com,
Inc. ("BugSolver").
WITNESSETH THAT:
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WHEREAS, the Company desires to engage the Consultant in the capacity
hereinafter stated, and the Consultant desires to enter into an engagement with
the Company in such capacity for the period and on the terms and conditions set
forth herein; and
WHEREAS, the Consultant and BugSolver wish to terminate the Consulting
Agreement dated as of December 10, 1999 between the Consultant and BugSolver
(the "BugSolver Agreement") and incorporate the terms of the BugSolver Agreement
into this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth below, it is hereby covenanted and agreed by the Company, BugSolver
and the Consultant as follows:
1. Consulting Period. The Company hereby agrees to engage the
Consultant as a member of the TekInsight Board of Directors and its
Chief Executive Officer, and the Consultant, in such capacities,
agrees to provide services to the Company and to continue to
provide services to BugSolver (the "Consulting Period") beginning
on the date first above written and ending, subject to Section 7,
on February 28, 2002, (the "Termination Date"). This Agreement
will automatically renew for successive ninety (90) day periods
unless either party gives the other written notice of termination
as described in Section 7 hereof, with each such renewal period
being considered an extension of the Consulting Period.
2. Independent Contractor. Consultant shall at all times during the
term of this Agreement be an independent contractor to the Company
and to BugSolver, and shall not be regarded as an employee of
either the Company or BugSolver or any of their subsidiaries and
Consultant shall be responsible for the payment of all federal,
state and local taxes, FICA payments or the like out of the
compensation paid him under the terms of this Agreement.
3. TekInsight Board of Directors. The Consultant hereby agrees to
serve as a member of the Board of Directors of TekInsight.
TekInsight agrees that, without limiting any rights of Consultant
under TekInsight's certificate of incorporation, (a) Consultant's
liability as a director shall be limited to the maximum extent
permitted by law, (b) Consultant shall be indemnified and held
harmless by TekInsight from and against any and all losses,
liabilities, claims, expenses and the like incurred by or assessed
against Consultant as a director, to the maximum extent permitted
by law and (c) TekInsight shall maintain Directors and Officers
liability insurance providing insurance for the Consultant against
liability as an officer and company director, and the maintenance
of that insurance shall be a condition to Consultant so serving.
4. BugSolver Board of Directors. The Consultant hereby agrees to
continue to serve as a member of the Board of Directors of
BugSolver if elected or appointed during the Consulting Period.
BugSolver agrees that, without limiting any rights of Consultant
under BugSolver's certificate of incorporation, (a) Consultant's
liability as a director shall be limited to the maximum extent
permitted by law, (b) Consultant shall be indemnified and held
harmless by BugSolver from and against any and all losses,
liabilities, claims, expenses and the like incurred by or asserted
against Consultant as a director, to the maximum extent permitted
by law and (c) prior to BugSolver's filing of a registration
statement with respect to an initial public offering, BugSolver
shall have obtained Directors and Officers liability insurance
providing insurance for the Consultant against liability as a
director of BugSolver, and the maintenance of that insurance shall
be a condition to Consultant so serving during the process of
filing and having declared effective such registration statement.
5. Performance of Duties. The Consultant agrees that, during the
Consulting Period, as requested by the Boards of Directors of the
Company and of BugSolver, the Consultant will provide his best
efforts, professional energy and talent to serving as Consultant in
the best interests of both the Company and BugSolver. Consultant
will perform duties consistent with the position of Chief Executive
Officer of the Company, as well as other tasks and duties as
requested by the Company and BugSolver which are commensurate with
his compensation level and his positions with each of such
corporations.
6. Compensation. Subject to the terms and conditions of this
Agreement, during the Consulting Period, the Consultant shall be
compensated by the Company for his services as follows:
(a) The Consultant shall receive a consulting fee of $20,000 for
each month he is engaged as a Consultant under this Agreement
through May, 2000, payable on the first day of each month.
Effective June 1, the consulting fee will be $23,000 for each
month he is engaged as a consultant under this agreement (the
"Consulting fee"), payable on the first day of each month.
(b) The Consultant shall also receive a TekInsight Board fee of
$2,000 for each month he is engaged as a Consultant and Board
Member, payable on the first day of each month during the
Consultant Period.
(c) The Consultant acknowledges that he has already received, as a
"signing bonus" in consideration for (i) his agreement to
enter into the BugSolver Agreement and (ii) his payment to the
Company of $300 (which was credited against his first month's
payment of the Consulting Fee), 30,000 shares of BugSolver's
Common Stock, $.01 par value (the "BugSolver Common Stock"),
which shares at such time constituted 1% of the number of
shares of BugSolver Common Stock initially issued to
TekInsight.com, Inc.
(d) In the event BugSolver has not completed a merger with
Delicious Brands, Inc. and has successfully completed a
private placement of securities of at least $4,000,000,
BugSolver shall grant to the Consultant five-year options (the
"BugSolver Options") to purchase that number of shares of
BugSolver Common Stock as shall equal 4% of the outstanding
shares of BugSolver Common Stock immediately prior to the
completion of the Private Placement (the "BugSolver Options"),
which BugSolver Options shall be exercisable at the price at
which shares of BugSolver Common Stock are issued by BugSolver
in the Private Placement. The BugSolver Options shall vest one
year from the closing date of the Private Placement (the
"Vesting Date"); provided, that in the event that BugSolver
completes an initial public offering of its securities prior
to the Vesting Date, the BugSolver Options shall vest on the
closing date of such initial public offering. Upon the
termination of the Consulting Agreement by either party
hereto, the BugSolver Options which have not vested at such
time shall automatically become null and void.
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(e) In the event BugSolver completes a merger with Delicious
Brands, Inc., Consultant shall receive the following:
(i) Options (the "BugSolver/e-Delicious Options") to purchase
that number of shares of Common Stock of BugSolver as
shall equal 2% of the shares of BugSolver Common Stock
issued and outstanding immediately prior to the
completion of the merger.
(ii) Following the successful completion of a private
placement of BugSolver securities of at least $4,000,000,
additional options (the "BugSolver/e-Delicious Options")
of BugSolver Common Stock as shall equal 2% of the shares
of BugSolver issued and outstanding immediately prior to
the completion of private placement. The terms of the
BugSolver/e-Delicious Options in these sub-provisions (i)
and (ii) shall be the same as those of the BugSolver
Options described in Section 6(d) above.
(f) The Company shall grant to the Consultant as of the date
hereof three-year options (the "Company Options") to purchase
400,000 shares of the common stock of the Company, par value
$.0001 per share (the "Company Common Stock"), which Company
Options shall be exercisable for $3 per share of Company
Common Stock according to the following vesting schedule: (i)
200,000 Company Options shall be exercisable as of the date
hereof; (ii) 100,000 Options shall be exercisable on and after
the day on which the average closing price for one share of
Company Common Stock for the 5 trading days immediately prior
to such date attains $6 per share; and (iii) 100,000 Options
shall be exercisable on and after the day on which the average
closing price for one share of Company Common Stock for the 5
trading days immediately prior to such date attains $8 per
share. The Company Options referred to in clause (i) above
shall be evidenced by an Option Agreement substantially in the
form of Exhibit A hereto, and those Company Options referred
to in clauses (ii) and (iii) above shall be evidenced by an
Option Agreement substantially in the form of Exhibit B
hereto.
(g) The Consultant shall promptly be reimbursed for reasonable
expenses incurred in the performance of his duties hereunder;
provided, that he shall furnish an itemized account
satisfactory to the Board of Directors of the Company in
substantiation of expenditures in connection with his services
under this Agreement.
(h) In connection with the issuance of shares of BugSolver Common
Stock and the granting of the BugSolver Options and the
Company Options to the Consultant, the Consultant agrees that
he shall execute and deliver to BugSolver and the Company, as
the case may be, such agreements and instruments as counsel to
the Company shall deem necessary in order for BugSolver and
the Company, as the case may be, to comply with applicable
federal and state securities laws.
7. Termination. This Agreement shall terminate upon the occurrence of
any of the following:
(a) Without Cause. Either the Company or the Consultant may
terminate this Agreement upon thirty (30) days' written
notice, subject to severance payment in the event of
termination pursuant to Section 7(b) below.
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(b) Severance. Upon termination of the Consultant by the Company
without Cause, the Company will pay Consultant a lump sum
equivalent to six months consulting and Board fees, if
applicable, payable within thirty (30) days of termination.
(c) Discharge for Cause. The Board of Directors of the Company may
terminate this Agreement if:
(i) The Consultant is or becomes habitually addicted to
drugs or alcohol.
(ii) The Consultant discloses confidential information in
violation of Section 8.
(iii) The Company or BugSolver is directed by regulatory or
governmental authorities to terminate the engagement
of the Consultant, or the Consultant engages in
activities that result in actions to be taken by
regulatory or governmental authorities that have a
material adverse effect on the Company or BugSolver.
(iv) The Consultant is convicted of or pleads nolo
contendere to any felony involving moral turpitude or
to any crime in connection with his duties hereunder
which causes substantial detriment to the Company or
BugSolver, but specifically shall not include traffic
offenses.
(v) The Consultant breaches his duties under this
Agreement in any material respect, and that breach is
not cured within ten (10) days of notice thereof from
the Company or BugSolver to the Consultant. Such
notice will only be required for the first said
breach.
(vi) The Consultant engages in any misconduct that has a
material adverse effect on the Company or BugSolver.
(vii) The Consultant commits an act of fraud against the
Company or BugSolver or any client of the Company or
BugSolver. (All of the conditions referred to in
sub-provisions (i) through (vii) are defined as
"Cause" for the purposes of this Agreement).
(d) Board of Directors. If this Agreement is terminated by either
Consultant or the Company, the Consultant shall immediately
resign from the Boards of Directors of the Company and/or
BugSolver, as applicable.
8. Confidential Information. Except as may be required by the law or
to enforce the provisions of this Agreement, the Consultant agrees
(a) to keep secret and confidential indefinitely all non-public
information concerning the Company or BugSolver and the
subsidiaries or affiliates of either which was acquired by or
disclosed to the Consultant during the course of his engagement by
the Company or BugSolver, including information relating to
customers (including, without limitation, credit history, repayment
history, financial information and financial statements), costs,
operations, financial data and plans (whether past, current or
planned) and (b) not to disclose the same, either directly or
indirectly, to any other person, firm or business entity, or use it
in any way other than to perform its obligations hereunder;
provided, however, that the provisions of this Section 8 shall not
apply to information (a) which is in the public domain, (b) which
was disclosed to the Consultant by independent third parties who,
to Consultant's knowledge, were not bound by an obligation of
confidentiality or (c) which the Consultant is required to disclose
in order to respond to a summons or subpoena or in connection with
any litigation; and provided further, that the Company and
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BugSolver recognize that the Consultant shall, during the course
of his engagement with the Company and with BugSolver, acquire
certain general information regarding the financial condition,
borrowing trends and business operations of the Company's and
BugSolver's customers and agrees that the provisions of this
Section 8 shall not apply to the use of such general information;
provided that the use of such information does not violate
applicable federal or state laws. The Consultant further agrees
that he will not make any statement or disclosure of information
gained by him in connection with the performance of duties under
this Agreement which would be prohibited by applicable federal or
state laws.
9. Successors. This agreement shall be binding on, and inure to the
benefit of, the Company and BugSolver, and their successors and
assigns and any person acquiring all or substantially all of the
Company's and/or BugSolver's assets and business, whether by
merger, consolidation, purchase of assets or otherwise.
10. Nonalienation. The interests of the Consultant under this
Agreement are not subject to the claims of his creditors, and may
not otherwise be voluntarily or involuntarily assigned, alienated
or encumbered.
11. Remedies. The Consultant acknowledges that the Company and/or
BugSolver may be irreparably injured by a violation of Section 8,
and agrees that the Company and/or BugSolver shall be entitled to
an injunction restraining the Consultant from any actual or
threatened breach of Section 8, or to any other appropriate
equitable remedy without bond or other security being required.
12. Waiver of Breach. The waiver by the Company, BugSolver or the
Consultant of a breach of any provision of this Agreement shall
not operate as or be deemed a waiver of any subsequent breach by
the Company, BugSolver or the Consultant.
13. Notice. Any notice to be given hereunder by a party hereto shall
be in writing and shall be deemed to have been given when
delivered by hand or by facsimile with confirmation back, one day
after delivery to an overnight courier of national reputation (for
next day delivery) or three days after being deposited in the U.S.
mail, certified or registered mail, postage prepaid:
(a) to the Consultant addressed as follows:
Steven J. Ross
2 Leesbury Court
Newport Beach, CA 92660
(b) to the Company addressed as follows:
TekInsight.com, Inc.
5 Hanover Square
New York, NY 10004
Attention: Arion Kalpaxis
(c) to BugSolver addressed as follows:
BugSolver.com, Inc.
C/o TekInsight.com, Inc.
5 Hanover Square
New York, NY 10004
Attention: Arion Kalpaxis
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14. Amendment. This Agreement may be amended or cancelled by mutual
agreement of the parties in writing without the consent of any
other person and no person, other than the parties hereto, shall
have any rights under or interest in this Agreement or the subject
matter hereof.
15. Applicable Law. The provisions of this Agreement shall be
construed in accordance with the internal laws of the State of New
York, without regard to its principles of conflict of laws.
16. Termination. All of the provisions of this Agreement shall
terminate upon the expiration of the Consulting Period, as it may
be extended, except that the obligations of Section 8 shall not
terminate and shall remain in effect indefinitely
17. Termination of BugSolver Agreement. Upon execution of this
Agreement, the BugSolver Agreement shall be terminated and this
Agreement shall supersede the BugSolver Agreement, and all
obligations and responsibilities of the Consultant and BugSolver
which were previously contained in the BugSolver Agreement shall,
from the date of this Agreement, be governed by the terms and
provisions of this Agreement.
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IN WITNESS WHEROF, the Consultant, the Company and BugSolver have
executed this Consulting Agreement on the 15th day of May, 2000.
By: /s/ Steven J. Ross
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STEVEN J. ROSS
TEKINSIGHT.COM, INC.
By: /s/ Arion Kalpaxis
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Name: Arion A. Kalpaxis
Title: Chief Operating Officer
BUGSOLVER.COM, INC.
By: /s/ Arion Kalpaxis
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Name: Arion A. Kalpaxis
Title: Chief Operating Officer
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EXHIBIT A
Steven Ross' duties, as a Consultant to BugSolver.com, Inc, shall include the
following:
He shall devise and write a comprehensive business plan.
He shall help arrange and supervise beta testing.
He shall solicit and enter into vendor relationships.
He shall supervise the marketing of the BugSolver Web site and develop a
strategy to promote the BugSolver Web site.
He shall actively participate in BugSolver's efforts to raise capital through a
private placement.
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