Exhibit 10.1
 
CONSULTING SERVICES AGREEMENT
 
This Consulting Services Agreement (the “Agreement”) is made effective as of May
1, 2016 (the “Effective Date”), by and between VerifyMe Inc., a Nevada
corporation with its principal place of business located at 12 West 21st Street,
New York, New York (the “Company”) and Nicolette Consulting Group Limited, a
Delaware corporation with its principal place of business located at 1209 Orange
Street, Suite 123, Wilmington, Delaware (“NCG”) (the Company and NCG together
the “Parties” or individually a “Party”).
 
WHEREAS, the Company is engaged in the business of developing, manufacturing and
supplying high-tech solutions in the field of authenticating products and
people.  Its physical technology authenticates products, documents, and currency
with a suite of proprietary security inks and pigments; and
 
WHEREAS, NCG provides consulting services for business development and
management; and
 
WHEREAS, the Company and NCG desire to enter into this Agreement, pursuant to
which NCG will provide consulting services to the Company, subject to the terms
and conditions set forth below.
 
NOW, THEREFORE, in consideration of the mutual covenants and obligations
contained herein, the Company and NCG, intending to be legally and forever
bound, hereby agree as follows:
 
A. 
Engagement

 
NCG shall provide the Services defined below in Section C herein for the
Company, reporting to its Board of Directors (“BofD”) (the “Engagement”). The
Parties agree that only Thomas A. Nicolette (“TAN”), Managing Director of NCG,
shall be assigned to the Engagement in order to provide the Services to the
Company.  In this capacity, TAN shall fill the position of the Company’s
President and Chief Executive Officer and/or such other position(s) designated
by the Company’s BofD and shall serve on the BofD.  NCG and TAN agree to devote
their best efforts, energies and skill to the full discharge of their duties and
responsibilities under this Agreement.
 
B. 
Term

 
Services under this Agreement shall commence on May 1, 2016 (the “Commencement
Date”) and shall terminate on December 31, 2017 (the “Scheduled Termination
Date”), unless earlier terminated in accordance with the provisions of Section H
below (the “Term”).
 
C. 
Services to be Performed

 
During the Term of this Agreement, NCG shall provide business development and
management consulting services to the Company pertinent to sales, marketing,
manufacturing, management accounting, customer care and investor relations. NCG
warrants that NCG and TAN will use the highest degree of skill and expertise to
professionally accomplish the Services within the Term of this Agreement and to
project a positive image of the Company, in accordance with the Company’s
policies and procedures and applicable law.
 
 
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D. 
Compensation for Services

 
1.           Fees for Services.  In consideration of the Services rendered by
NCG and NCG’s other obligations under this Agreement, the Company shall pay NCG
a monthly fee of Twelve  Thousand Five Hundred and 00/100 Dollars ($12,500.00)
in compensation for time devoted to the Engagement (the “Monthly Fee”).  The
initial Monthly Fee shall be due, and each subsequent Monthly Fee shall be paid,
on the 5th day of each month during the Term of this Agreement via check
tendered by overnight delivery or wire transfer.
 
2.           Warrants.  Promptly following the Effective Date, NCG or TAN shall
receive warrant certificates, valid for five (5) years from the date of this
Agreement,  representing the right of NCG or TAN to purchase 100,000 shares
("Shares") of the Company’s common stock at price of $0.01 per share (the
“Warrants”).  The Company agrees to include the Shares in any registration
statement filed by the Company at such time the Company undertakes a public
offering of its common stock.
 
3.           Reimbursement of Reasonable Business Expenses.  The Company shall
reimburse NCG for the following reasonable expenses directly attributable to and
incurred in connection with the performance of Services due to the Engagement
under this Agreement: (a) all reasonable and necessary out-of-pocket expenses
and travel expenses, including airfares and train fares (economy class to be
booked for travel up to two (2) hours; business class for travel exceeding two
(2) hours), lodging, meals, tolls and customer entertainment; (b) highway
mileage in NCG’s or personal vehicles at a given number of cents per mile based
on the standard set by the IRS; and (c) all reasonable and customary office
costs incurred in connection with the performance of Services under the
Engagement including postage, office supplies, internet connections, telephone
and facsimile charges but excluding office rent and other general overhead
expenses, provided that NCG first submits appropriate, written, audit-worthy
documentation to the Company supporting such expenses (including receipts) and
the Company authorizes the same, which authorization shall not be unreasonably
withheld (all, collectively, the “Approved Expenses”).  NCG shall use its best
judgment to both control and limit the expenses incurred in connection with this
Agreement, and to obtain all available discounts, rebates and allowances as
would a reasonable business person.  Within ten (10) business days of the
Commencement Date of this Agreement, the Company shall tender to NCG an advance
of Five Thousand and 00/100 Dollars ($5,000.00) (the “Advance”), which Advance
shall be held in escrow by NCG for the reimbursement of Approved Expenses on a
monthly basis after they are first approved by the Company.  The Advance shall
be replenished by the Company whenever NCG provides documentation to the
satisfaction of the Company that the balance has been reduced to at or below One
Thousand Five Hundred and 00/100 Dollars ($1,500.00).  Upon Termination of the
Engagement, NCG shall return the Advance, less Approved Expenses, to the Company
within ten (10) business days.
 
4.           NCG acknowledges that the foregoing provisions of this Section D
constitute the sole and entire compensation and reimbursements payable to it for
the Engagement and the provision of the Services of NCG and TAN, and the Parties
specifically agree that no compensation, benefits or other reimbursements of any
other nature shall be paid or payable to NCG or TAN as a result of the provision
of Services hereunder.
 
 
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E. 
Ownership of Materials

 
1.           Ownership.  All materials, reports, plans, information, ideas,
inventions, discoveries, improvements, methods, processes, drawings, renditions,
mock-ups, prototypes, creative execution, advertising ideas, creative concepts
or other works conceived, created, reduced to practice, delivered or disclosed
to the Company or produced or otherwise arising out of the Services, in whole or
in part and whether alone or in conjunction with others (whether or not during
work hours devoted to the Services) (collectively, the “Creative Materials”),
and all rights, title and interests (including copyrights) in and to such
Creative Materials throughout the world, are hereby assigned to the Company and
shall be the sole and exclusive property of the Company.
 
2.           Works Made for Hire.  All copyrightable works comprising the
Creative Materials shall be considered “works made for hire” as defined in the
United States Copyright Act, whether published or unpublished, and all rights,
title, and interest to all such copyrightable works shall be the exclusive
property of the Company, and the Company shall be deemed to be the author and
owner of such copyrightable works.  NCG shall not distribute the copyrightable
works, in part or in entirety, to any third party without the express written
consent of the Company.
 
3.           Disclosure; Cooperation.  NCG shall, including TAN, to promptly
disclose all such Creative Materials to the Company, and the Company shall have
full power and authority to file any patent or copyright registrations or other
intellectual property submissions, applications or registrations throughout the
world thereon and to procure and maintain any patents, copyrights or other
intellectual property rights thereon.  NCG agrees, at the Company’s reasonable
request and expense, to execute any applications, assignments, instruments and
other documents, and perform such acts, as the Company may deem necessary or
advisable to confirm and vest in the Company all such rights, title and
interests throughout the world in and to such Creative Materials and all
intellectual property rights pertaining thereto, and to assist the Company in
procuring, maintaining, enforcing and defending such intellectual property
rights and protection throughout the world thereon.  To the extent not covered
by the foregoing, the Company shall have the fully paid-up and irrevocable right
to use and disclose freely and for any purpose all information and ideas
disclosed by NCG to the Company in performing the Services hereunder.
 
4.           NCG Obligations.  With respect to any Creative Materials, NCG
shall, including TAN, to:
 
 
(a)
Treat all information with respect thereto as Confidential Information of the
Company;

 
 
(b)
Keep complete and accurate records thereof, which records shall be the property
of the Company;

 
 
(c)
Give to the Company and its attorneys all reasonable and requested assistance in
preparing such application;

 
 
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(d)
From time to time, upon the request and at the expense of the Company, but
without payment to NCG by the Company of additional consulting fees, execute all
assignment or other instruments required to transfer and assign to the Company
(or as it may direct) all Creative Materials, and all patents and applications
for patents, copyrights or applications for registration of copyrights, covering
such inventions or otherwise required to protect the rights and interests of the
Company;

 
 
(e)
Testify in any proceedings or litigation as to any Creative Materials; and

 
 
(f)
In case the Company shall desire to keep secret any Creative Materials, or shall
for any reason decide not to have letters patent applied for thereon, refrain
from applying for letters patent thereon.

 
F. 
Confidentiality

 
1.           Confidential Information.  NCG acknowledges that it may be
necessary for the Company during the course of the Engagement, to disclose
certain confidential and proprietary information (“Confidential Information”) to
NCG, including TAN, in order for NCG to perform the Services pursuant to this
Agreement.  NCG, including TAN, shall not disclose or use, at any time either
during or after the Term of this Agreement, for their own benefit or for the
benefit of any third party, any Confidential Information without the Company’s
prior written permission except to the extent necessary to perform the Services
on the Company’s behalf.  Confidential Information includes, without limitation:
 
 
(a)
The written, printed, graphic or electronically recorded materials furnished by
the Company for NCG to use;

 
 
(b)
Any written or tangible information stamped “confidential,” “proprietary” or
with a similar legend or any information that the Company makes reasonable
efforts to maintain its secrecy;

 
 
(c)
Business, research and development, regulatory and marketing plans, objectives
and/or strategies, financial information, corporate initiatives, contractual and
business arrangements, customer lists, supplier lists, sales projections,
product information, product launch plans, regulatory submissions, pricing
information of the Company and its affiliates;

 
 
(d)
Information, data, test results, patent applications, clinical methodologies,
operating procedures, trade secrets, design formulas, know-how, techniques,
analyses, technology, processes, protocols, specifications and instructions
relating to the Company’s proprietary products, including safety data and
reference standards, investigators brochures, documents and reports, computer
programs and inventories, discoveries and improvements of any kind, sales
projections, product information, pricing information of the Company and its
affiliates;

 
 
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(e)
Information, know-how, trade secrets, materials  and tangible property belonging
to customers and suppliers of the Company and other third parties who have
disclosed such confidential and proprietary information to the Company about
whom NCG gained knowledge as a result of providing Services to the Company;

 
 
(f)
Any data, deliverables or other work product or information generated or
developed by NCG in connection with the performance of Services under this
Agreement, including all Creative Materials; and

 
 
(g)
Any copies, extracts, notes, or summaries of any information described in
clauses (a) through (f).

 
Notwithstanding any of the foregoing, Confidential Information shall not include
any information that:
 
 
(a)
is or becomes available in the public domain through no fault of, or act or
failure to act on the part of NCG, including TAN;

 
 
(b)
is rightfully in NCG’s possession at the time of disclosure by the Company, as
evidenced by NCG’s written records maintained in the ordinary course of
business; or

 
 
(c)
is obtained, after the Commencement Date, by NCG from any third party that is
lawfully in possession of such Confidential Information and not in violation of
any contractual or legal obligation with respect to such Confidential
Information.

 
2.           At any time upon request of the Company or upon Termination of this
Agreement, NCG shall promptly deliver to the Company: (i) all Confidential
Information (and all copies thereof) and all other property (including but not
limited to document files, computer disks, keys and key fobs) furnished to NCG,
including TAN, by the Company and all other materials prepared by NCG, including
TAN, containing any Confidential Information; and (ii) a certification that all
Confidential Information has been delivered to the Company.
 
3.           Notwithstanding the return of Confidential Information or the
Termination of this Agreement, NCG, including TAN, will continue to be bound by
the obligations of confidentiality pursuant to this Section F.
 
G. 
Exclusivity

 
During the term of this Agreement, NCG and TAN shall not provide services to any
direct competitor of the Company.  Otherwise, there are no restrictions on the
business activities of NCG or TAN.
 
 
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H. 
Termination

 
1.           Generally.  This Agreement will terminate automatically: (a) upon
the Scheduled Termination Date; (b) upon mutual agreement of the Parties; (c) in
the event either Party becomes insolvent or a petition in bankruptcy is filed or
any insolvency proceedings are instituted by or against either Party, or either
Party liquidates its business; or (d) upon TAN’s death.
 
2.           By TAN’s Disability.  The Company reserves the right to terminate
this Agreement if TAN suffers any physical or mental illness or incapacity that
has rendered NCG and TAN substantially unable to perform the duties under this
Agreement for a period of ninety (90) calendar days or more, whether or not
consecutive.
 
3.           By the Company for Cause.  The Company may terminate this Agreement
for Cause by action of its BofD.  For purposes of this Agreement, “Cause” shall
mean: (a) TAN’s indictment, conviction, guilty plea, plea of nolo contendre, or
entering into any other plea admitting guilt of any felony; (ii)NCG or TAN's
intentional misconduct, gross negligence, or material misrepresentation in the
performance of his duties to the Company; or (c) NCG’s or TAN’s failure to
observe or perform any of the terms or provisions of this Agreement, or the
Services hereunder, which failure remains uncured following thirty (30) days
prior written notice from the Company.
 
4.           Upon Termination of this Agreement, NCG and TAN will cease
performing Services and will no longer be authorized to perform any Services on
behalf of the Company, except at the express request and approval of the
Company’s BofD.  TAN will resign from all positions on the BofD and NCG will
receive any unpaid Monthly Fee or Approved Expenses earned through the Scheduled
Termination Date.  The Company shall be entitled to a refund or non-payment of a
pro rata portion of or the balance of any Monthly Fee previously tendered but
not yet earned as of the date of Termination, in addition to the reimbursement
of any other prepaid or overpaid expenses.
 
I. 
Indemnification

 
1.           The Company hereby agrees to defend, indemnify and hold harmless
NCG, including TAN, from and against any and all claims, liabilities, losses,
damages, and expenses incurred (including attorneys’ fees and disbursements),
arising in connection with investigating, preparing for, or defending any
action, formal or informal claim, investigation, inquiry or other proceeding,
whether or not in connection with pending or threatened litigation which are
related to or arise in any manner out of the Engagement, including any legal
proceeding in which NCG  may be required or agree to participate in, but in
which NCG is not a party provided, however, that the Company shall not be
responsible to defend, indemnify or hold NCG, including TAN, harmless from any
claims, liabilities, losses, damages, or expenses determined to have resulted
from the gross negligence or willful misconduct of NCG, including TAN.
 
2.           NCG agrees to defend, indemnify and hold the Company harmless from
and against any and all claims, liabilities, losses, damages, and expenses
arising out of: (a) any breach by NCG, including TAN, of its warranties,
representations, covenants and obligations; (b) the gross negligence or willful
misconduct of NCG, including TAN; and (c) the failure of NCG, including TAN, to
comply with all legal requirements.
 
 
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3.           The Parties further agree that they shall not, without the prior
written consent of the other Party, settle, compromise or consent to the entry
of any judgment in any pending or threatened claim, action, suit or proceeding
in respect of which defense and/or indemnification may be sought hereunder
unless such settlement, compromise or consent includes an unconditional release
of the Party seeking defense and/or indemnity from all liability arising out of
such claim, action, suit or proceeding.
 
4.           The Party seeking defense or indemnification hereunder shall: (i)
promptly notify the other Party of the matter for which defense or
indemnification is sought; (ii) subject to the immediately preceding sentence of
this paragraph, provide the other Party with sole control over the defense
and/or settlement thereof, including but not limited to the selection of
counsel; and (iii) at the request of the Party providing defense and/or
indemnification, fully cooperate in the provision of full and complete
information and reasonable assistance with respect to the defense of such
matter.
 
5.           Notwithstanding any other provision of this Agreement, TAN shall be
individually covered by the same indemnification as described above and
Directors and Officers liability insurance as is applicable to other directors
and officers of the BofD of the Company.
 
J. 
Survival

 
The obligations of the Parties pursuant to Sections E, F and I shall survive the
Termination of this Agreement, regardless of the reason for such Termination,
along with any and all other provisions that expressly provide for survival of
Termination.
 
K. 
Relationship of the Parties; Independent Contractor Status

 
The Parties agree that the relationship created by this Engagement is one of an
independent contractor.  The Parties further agree that NCG, including TAN, are
not and shall not be considered employees of the Company and are not and shall
not be entitled to any of the rights and/or benefits that the Company provides
for the Company's employees (including any employee pension, health, vacation
pay, sick pay or other fringe benefits offered by the Company under plan or
practice) by virtue of the Services being rendered by NCG or otherwise. NCG
acknowledges and agrees that the Company does not, and shall not, maintain or
procure any workers’ compensation or unemployment compensation insurance for or
on behalf of any of NCG, including TAN, and shall make no state temporary
disability or family leave insurance payments on behalf of any of NCG, including
TAN, and NCG agrees that neither NCG, including TAN, will be entitled to these
benefits in connection with performance of the Services under this
Agreement.  NCG acknowledges and agrees that it shall be solely responsible for
paying all salaries, wages, benefits and other compensation which NCG, including
TAN, may be entitled to receive in connection with the performance of the
Services under this Agreement.  NCG is responsible for all taxes, if any,
imposed on it in connection with its performance of Services under this
Agreement, including any federal, state and local income, sales, use, excise and
other taxes or assessments thereon.
 
 
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L. 
Binding Nature; Assignments

 
This Agreement shall be binding upon and inure to the benefit of the Parties
hereto and their respective successors, representatives, administrators, heirs,
executors and permitted assigns, except that the duties of TAN are personal and
shall not be assigned or subcontracted without the Company’s prior written
consent and any purported assignment without such written consent shall be
deemed void and unenforceable.
 
M. 
Entire Agreement; Amendments

 
This Agreement contains the entire understanding between the Parties with
respect to its subject matter and supersedes all previous negotiations,
agreements or understandings between the Parties, whether written or verbal.
This Agreement may not be amended or modified, except in writing, executed by
duly authorized representatives of the Parties hereto.
 
N. 
Governing Law; Consent to Jurisdiction and Venue

 
This agreement shall be governed by and construed in accordance with the laws of
New York, without giving effect to principles of conflicts of laws.  The Parties
agree that any dispute concerning or arising under this Agreement shall be
subject to the exclusive jurisdiction of the state and federal courts of the
State of New York, and each Party agrees to submit to the personal and exclusive
jurisdiction and venue of such courts.
 
O. 
Notices

 
All notices required or permitted to be delivered under this Agreement shall be
in writing and sent to the principal place of business of the Party to whom they
are addressed.  Notices to NCG shall be delivered to the attention of the
Managing Director.  Notices to the Company shall be delivered to the attention
of the Chairman of the Board.  All notices under this Agreement shall be deemed
delivered only if sent by overnight mail or courier with return receipt.
 
P. 
Severability

 
If any provision of this Agreement is found to be invalid or unenforceable for
any reason by a court of competent jurisdiction, that provision shall be
stricken from this Agreement and that finding shall not invalidate any other
terms of this Agreement, which terms shall remain in full force and effect
according to the surviving terms of this Agreement.  In such an event, the
Parties shall negotiate with one another to agree on a provision which the
Parties would have agreed if they had known of the defect when they signed this
Agreement, in order to achieve the same commercial outcome and objectives of
this Agreement that were intended upon its execution.
 

[Signature page follows.]
 
 
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IN WITNESS WHEREOF, this Agreement has been duly executed by or on behalf of the
Parties as of its Effective Date.
 
VerifyMe, Inc.
 
Nicolette Consulting Group, Limited
                                         
/s/ Michael Madon
   
/s/ Thomas A. Nicolette
 
By:
Michael Madon
   
By:
Thomas A. Nicolette
 
Its:
Chairman of the Board
   
Its:
Managing Director
               
Date:
May 1, 2016
   
Date:
May 1, 2016
 

 
 
Signature Page to Consulting Services Agreement
 
 
 

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