Exhibit 99.2
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT, dated as of March 22, 2005, by and between
Security Intelligence Technologies, Inc., a Florida corporation whose address is
145 Huguenot Street; Suite 310, New Rochelle, New York 10801 (the "Company"),
and Menahem Cohen, whose address is Hatasia Street #3, P.O. Box 3073, Ra'anana
43214 Israel ("Consultant"), the Company and Consultant being referred to
collectively as the "Parties" and each, individually, as a "Party."
RECITALS
WHEREAS, Consultant has served as an executive officer of the Company, and
has resigned from such position in connection with the sale by the Company to
him of the stock of its wholly-owned subsidiary, CCS International, Inc.
("CCS"); and
WHEREAS, Consultant is familiar with the Company's products and has
experience in marketing such products, and is willing to provide consulting
services to the Company on and subject to the terms of this Agreement; and
WHEREAS, the Company is willing to engage Consultant to perform the
consulting services for it, on and subject to the terms of this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
the Parties agree as follows:
1. Services.
(a) The Company hereby engages Consultant to perform and provide
strategic marketing and other general corporate consulting services
("Services"), including but not limited to: (i) identifying prospective
strategic partners and strategic alliances; (ii) planning, strategizing and
assisting the Company in negotiating with potential strategic business partners;
(iii) assisting the Company with business development; (iv) advising the Company
as to developments concerning the security industry which may be relevant or of
interest or concern to the Company; (v) assisting the Company in developing
strategic marketing and planning plans and programs; (vi) assisting in a review
of the Company's performance and methods of enhancing its performance, and (vii)
other general management consulting services. The Company shall not require or
request Consultant to raise debt or equity capital on behalf of the Company or
any of its affiliates, and Consultant shall not perform any such services.
(b) Consultant accepts the engagement provided in this Agreement and
agrees to perform the Services in a professional manner, diligently, in good
faith, in a manner consistent with the best interests of the Company. Consultant
shall not be required to devote his full time and attention to the Services.
Consultant shall perform Services at the Company's offices, at his offices in
Israel or at such other locations as may be reasonably acceptable to the
Company.
2. Term. This Agreement shall, subject to Section 5 of this Agreement,
have a term commencing on the date of this Agreement and ending on December 31,
2007.
3. Compensation. In consideration of the Services to be provided by the
Consultant during the Term, as hereinafter defined, the Company shall pay
Consultant at the rate of one hundred eight thousand dollars ($108,000) per
annum, payable in weekly installments.
4. Expenses. The Company shall reimburse Consultant for all reasonable and
necessary expenses incurred by Consultant on behalf of the Company upon
presentation of appropriate vouchers and back-up documentation in accordance
with the Company's expense reimbursement policy. Consultant will not incur any
expenses for which he will seek reimbursement without the prior written approval
of the Company.
5. Termination of Agreement.
(a) This Agreement and the Term shall terminate immediately upon the
death or disability of Consultant. The term "disability" shall mean any illness,
disability, incapacity or condition of the Consultant which prevents him from
substantially performing the Services for a period of two (2) consecutive months
or four (4) months, even though not consecutive, in any eighteen (18) month
period.
(b) The Company may terminate this Agreement, immediately and
without notice, for Cause, in which event no further Commissions shall be
payable to Consultant. The term "Cause" shall mean (i) a material breach by the
Consultant of the provisions of Paragraph 6, 7 or 8 of this Agreement, (ii) acts
of dishonesty or deliberate misconduct on the part of Consultant, (iii) breach
of trust or other action by which Consultant obtains personal gain at the
expense of or to the detriment of the Company, (iv) failure by Consultant to
perform the Services after written notice by the Company, (v) conviction of or
plea of nolo contendere by the Consultant of any felony or (vi) conviction of or
plea of nolo contendere by the Consultant of any other crime relating to the
performance of Consultant's or Consultant's duties.
6. Assignment of Rights.
(a) Consultant shall have no proprietary interest in the work
performed by Consultant (hereinafter referred to as "work product") during the
course of performing Services, whether during or after working hours, and
Consultant agrees that such work product (whether performed during or after
working hours and whether performed at the Company's premises, Consultant's home
or office or otherwise) is work made for hire and that the Company shall have
all proprietary rights in such work product and any derivative work product
throughout the world.
(b) With respect to any work which is developed by Consultant with
respect to the Services during the Term and which is not deemed to be work made
for hire, Consultant hereby irrevocably assigns and transfers to the Company,
its successors, assigns or nominees, in perpetuity throughout the world all of
Consultant's right, title and interest in and to all such work product.
(c) Consultant's work product, whether the work product is described
in Paragraph 6(a) or 6(b) of this Agreement, may be used by the Company for any
purpose or in any media whatsoever, whether now known or developed in the future
in perpetuity and throughout the world, and Consultant hereby release the
Company from any payments for any use of the work product other than the
payments provided pursuant to this Agreement. It is further agreed that, without
charge to the Company, but at the Company's expense, Consultant will execute and
deliver all such further papers as may be necessary, in any and all countries,
to vest title of the work product in the Company.
7. Confidential Information.
(a) Consultant recognizes and acknowledges that during the course of
performing the Services he will acquire, and as an officer and director of the
Company prior to the execution of this Agreement, he has acquired, information
regarding the Company and the Company's business methods, technology, products,
plans and clients and other information which is not publicly known and which
the Company regards as proprietary to it ("Confidential Information"). Without
limiting the generality of the foregoing, Confidential Information includes all
proprietary know-how, use and applications know-how, technical information,
product formulae and formulations and other trade secrets relating to the
Company's business, products, proposed products, strategy, pricing structure,
relationships with joint venture partners, customers and suppliers, financial
information and projections which have not been publicly disclosed by the
Company, any information or other information contained in any patent
application, regardless of whether a patent is ever issued with respect to such
application, results of studies and surveys, in any stage of development,
including, without limitation, modifications, enhancements, designs, concepts,
techniques, methods, ideas, flow charts and all other information relating to
the Company's products and proposed products.
(b) Consultant agree that he will not, at any time, whether during
or after the Term, disclose to any person or use, directly or indirectly, for
Consultant's own benefit or the benefit of others, or aid or assist others in
using any Confidential Information, or permit any person to examine or make
copies of any document which may contain or is derived from Confidential
Information, whether prepared by Consultant or otherwise coming into
Consultant's possession or control.
(c) The provisions of Sections 7(a) and (b) shall not apply to any
information or material which Consultant can demonstrate by documentary or other
evidence:
(i) Is or becomes generally known to and available for use by
the public other than as a result of disclosure by an Consultant or by any other
person bound by a duty of confidentiality to the Company, or
(ii) Was disclosed to Consultant by a person who either (i)
was not under an obligation of confidentiality to the Company or (ii) did not,
directly or indirectly, acquire or obtain such information or material from a
person who was under an obligation of confidentiality to the Company.
(d) Consultant understands that, in connection with his performance
of the Services, he may have access to material non-public information
concerning the Company. Consultant understands that the disclosure of such
information to a third party or the use of such information in purchasing or
selling the Company's securities is a violation of federal and state law, and he
agrees to indemnify and hold harmless the Company, its officers, directors and
counsel from and against any manner of loss, liability, damages or expense
(including reasonable fees and expenses of counsel) which they may incur as a
result of a breach by Consultant of the provisions of this Section 7(d). This
indemnity is in addition to any other rights which the Company may have against
Consultant.
(e) In the event that Consultant is, pursuant to, or required by,
applicable law, regulation or legal process, to disclose any of the Confidential
Information, Consultant will notify the Company promptly so that the Company
may, at its cost, seek a protective order or other appropriate remedy or, its
sole discretion, waive compliance with the terms of this Section 7. Consultant
shall not disclose any Confidential Information until the court has made a
ruling. In the event that no such protective order or other remedy is obtained,
or in the event that the disclosing party waives compliance with the terms of
this Section 7, Consultant will furnish only that portion of the Confidential
Information which it is advised by counsel is legally required and will exercise
all reasonable efforts to obtain reliable assurance that confidential treatment
will be accorded the Confidential Information.
(f) Consultant shall, upon completion of the Services or upon
termination of Consultant's engagement with the Company, or earlier at the
request of the Company, turn over to the Company all documents, papers, computer
disks or other material in Consultant's possession or under Consultant's control
which may contain or be derived from Confidential Information, together with all
documents, notes or other work products which are connected with or derived from
the Services. To the extent that any Confidential Information is on Consultant's
hard drive or other storage media, he shall, upon the request of the Company,
cause such information to be erased from his computer disks and all other
storage media.
8. Non-Competition.
(a) During the Term and for a period one (1) year following the expiration
or termination of the Term, Consultant will not, directly or indirectly:
(i) persuade or attempt to persuade any person or entity which
is or was a customer or supplier of the Company to cease doing business with the
Company, or to reduce the amount of business it does with the Company (the terms
"customer," as used in this Section 8(a) includes any potential customer to whom
the Company submitted bids or proposals, or with whom the Company conducted
negotiations, during the Term);
(ii) solicit for himself or any other person or entity other
than the Company the business of any person or entity which is a customer of the
Company, or was a customer of the Company during the Term for any product sold
by the Company (each, a "Competing Product"), except that CCS may continue to
sell security products to retail customers and to other customers which are not
customers or prospects of the Company, and Consultant shall not use any
Confidential Information in identifying such prospects and potential customers;
(iii) persuade or attempt to persuade any employee of the
Company to leave the Company's employ, or to become employed by any person or
entity other than the Company; or
(iv) engage in any business in the United States whether as an
officer, director, consultant, partner, guarantor, principal, agent, employee,
advisor, guarantor or in any manner, which is engaged in the manufacture,
marketing and sale of any Competing Product, provided, however, that nothing in
this Section 8 shall not be construed to prohibit Consultant from (x) owning an
interest of not more than five (5%) percent of any public company engaged in
such activities or (y) owning an interest in or serving as an officer or
directors of CCS.
(b) Consultant acknowledge that the restrictive covenants (the
"Restrictive Covenants") contained in this Section 8 are a condition of
Consultant's engagement by the Company and are reasonable and valid in
geographical and temporal scope and in all other respects. If any court
determines that any of the Restrictive Covenants, or any part of any of the
Restrictive Covenants, is invalid or unenforceable, the remainder of the
Restrictive Covenants and parts thereof shall not thereby be affected and shall
remain in full force and effect, without regard to the invalid portion. If any
court determines that any of the Restrictive Covenants, or any part thereof, is
invalid or unenforceable because of the geographic or temporal scope of such
provision, such court shall have the power to reduce the geographic or temporal
scope of such provision, as the case may be, and, in its reduced form, such
provision shall then be enforceable.
9. Injunctive Relief. Consultant acknowledge that the violation or
threatened violation by him of any of the provisions of Sections 6, 7 and 8 of
this Agreement shall cause immediate and irreparable harm to the Company. In the
event of any breach or threatened breach of any of said provisions, Consultant
consent to the entry of preliminary and permanent injunctions by a court of
competent jurisdiction prohibiting them from any violation or threatened
violation of such provisions and compelling them to comply with such provisions.
This Section 9 shall not affect or limit, and the injunctive relief provided in
this Section 9 shall be in addition to, and not in lieu of, any other remedies
available to the Company at law or in equity for any such violation by
Consultant.
10. Representations and Warranties. Consultant hereby represents and
warrants to the Company that:
(a) He has a right to enter into this Agreement, that he is not a
party to any agreement or understanding, oral or written, which would prohibit
performance of his obligations under this Agreement, and that he will not use in
the performance of his obligations hereunder any proprietary information of any
other party which he is legally prohibited from using.
(b) The execution, delivery and performance of this Agreement does
not and will not conflict with, violate or breach any agreement, decree, order
or judgment or any law or regulation to which it is a party or subject or by
which it or any of its properties or assets is bound.
11. Independent Contractors. It is expressly agreed that the Company and
Consultant are acting hereunder as independent contractors. Neither Party shall
be deemed to an employer, employee, agent, partner or joint venturer of the
other. No Party has authority to enter into agreements on behalf of the other
Party or to bind any other Party in any way. Consultant shall maintain liability
insurance, workman's compensation and any other required insurance and shall be
liable for any personal injury or damages to property which occurs as a result
of his actions during the performance of the Services. Consultant acknowledges
he shall be solely responsible for payment of all taxes relating to his
compensation or any other payments made to him pursuant to this Agreement.
12. Notices. Any notices required or permitted to be sent hereunder shall
be in writing and shall be sent, by certified or registered mail, return receipt
requested, or by messenger or overnight courier which provides evidence of
delivery, or by telecopier or similar means of communication if the receipt is
acknowledged or if a copy thereof is sent in the manner provided in this Section
12. Notices shall be sent to the addresses first set forth above or to such
other address as a party may designate by notice pursuant hereto, of, if sent by
telecopier, to the telecopier number set forth on the signature page of this
Agreement. Notices shall be effective upon the date when delivery is either
effected or refused.
13. Survival. The provisions of Sections 6, 7, 8 and 9 of this Agreement
shall survive any termination of this Agreement or the Term.
14. Miscellaneous.
(a) This Agreement, and the respective rights, duties and
obligations of the parties pursuant to this Agreement, shall be governed and
construed in accordance with the laws of the State of New York applicable to
agreements executed and to be performed wholly within such state without regard
to principles of conflicts of law. Each party hereby (i) irrevocably consents
and agrees that any legal or equitable action or proceeding arising under or in
connection with this Agreement may be brought in any federal or state court
situated in New York or Westchester County, New York, (ii) irrevocably submits
to and accepts, with respect to its properties and assets, generally and
unconditionally, the in personam jurisdiction of the aforesaid courts and waives
the defense of an inconvenient forum to the maintenance of such action or
proceeding, and (iii) agrees that service in any such action may be made either
(x) by mailing or delivering a copy of such process to such party in the manner
set forth in Section 12 of this Agreement, other than by facsimile transmission,
or (y) by any other manner permitted by law.
(b) This Agreement shall bind and inure to the benefit of the
parties, and their respective executors, administrators, successors and assigns;
provided, however, that neither party may assign his or its obligations under
this Agreement except that this Agreement may be assigned by the Company in
connection with a merger, consolidation or sale by the Company of all or
substantially all of its business.
(c) If any provision of this Agreement is found to be void or
unenforceable by a court of competent jurisdiction, the remaining provisions of
this Agreement, shall, nevertheless, be binding upon the parties with the same
force and effect as though the unenforceable part has been severed and deleted.
(d) Each of the parties to this Agreement shall execute and deliver
to the other party, without charge to the other party, any further instruments
and documents and take such other action as may be requested by the other party
in order to provide for the other party the benefits of this Agreement.
(e) This Agreement may be executed in one or more counterparts, all
of which shall be deemed to be duplicate originals.
IN WITNESS WHEREOF, the Parties hereto have executed this instrument the
date first above written.
SECURITY INTELLIGENCE TECHNOLOGIES, INC.
By: /s/ Ben Jamil
----------------------------------
Ben Jamil, Chief Executive Officer
By: /s/ Menahem Cohen
----------------------------------
Menahem Cohen