Exhibit 10.1

 

Datameg Corporation

9 West Broadway #214

Boston, MA 02127

 

Joshua E. Davidson    As of July 1, 2005 121 Temple Street      Newton,
Massachusetts 02465     

 

  Re: Consulting Arrangements

 

Dear Josh:

 

I am pleased to confirm our continued interest in retaining you in a consulting
capacity to serve as the Vice President, Finance of Datameg Corporation (the
“Company”). As a consultant at-will, you and the Company can each terminate your
consulting arrangement at any time, with or without cause, upon not less than 30
days prior written notice.

 

As Vice President, Finance of the Company, you shall have such duties consistent
with such position as is prescribed, from time to time, by the Company’s
Chairman and Chief Executive Officer. Without limiting the generality of the
foregoing, you may be required, without additional compensation, to perform
services for or on behalf of one or more of the Company’s subsidiaries or
affiliates.

 

It is expected that each quarter during the term of your consulting arrangement
with the Company, you will devote approximately the following amounts of time to
the Company’s business: (i) four to five days per week for three weeks of each
quarter, and (ii) 1.5 days per week for ten weeks of each quarter.

 

If you sign and return to the Company a copy of this letter, you will then be
entitled to be compensated as follows:

 

1. $700 per day that you perform services for the Company (or $350 per half day
that you perform services for the Company), payable as follows: (i) on the first
business day of each month, the Company shall pay you $7,000 in advance; (ii)
if, at the end of any quarter, you performed more than 30 days of services for
the Company during the preceding quarter, and can document the same to the
Company’s reasonable satisfaction, the Company shall promptly pay you such
additional amount to which you are entitled (provided, however, that in no event
will the Company pay you aggregate compensation for a quarter exceeding $25,000
unless duly authorized in writing or by electronic mail by the Company’s
Chairman and Chief Executive Officer with respect to that quarter); and (iii)
under no circumstances shall you be required to return any advance payments to
the Company if you perform fewer than 30 days of services to the Company during
any given quarter.

 

2. You shall also receive a one-time signing bonus of one million (1,000,000)
restricted shares of the Company’s Common Stock, of which 50% (500,000 shares)
shall be issued promptly following your execution of this letter, and the
remaining 50% (500,000 shares) shall be issued on the first business day of
January 2006, provided that your consulting arrangement with the Company has not
been terminated. These share amounts are subject to equitable adjustment in the
event of any split, reverse split, stock dividend or the like after the date of
this letter. These shares may not be resold until you satisfy the requirements
of SEC Rule 144.

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The Company and you each acknowledge and agree that you are acting only as an
independent contractor and are not providing such services as an employee of the
Company or in any other capacity. You shall be responsible for payment of all
taxes with respect to the compensation and any other payments payable hereunder.
This Agreement shall not be construed to create any partnership or joint venture
between you and the Company. Further, as a consultant of the Company, you shall
not be entitled to receive any Company benefits that are offered to its
employees.

 

If you agree with the foregoing, please sign and return to me the three
documents listed above and following pages, which are a material part of, and
are hereby incorporated into, our agreement with you.

 

    Very truly yours,    

/s/ Mark P. McGrath

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    Datameg Corporation     By: Mark P. McGrath, Chairman

 

Agreed and accepted:

/s/ Joshua E. Davidson

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Joshua E. Davidson

 

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Datameg Corporation

 

Non-Competition and Non-Solicitation

 

1. During the term of your consulting arrangement, you will not on your own or
another’s behalf (as an officer, director, stockholder, partner, associate,
owner, employee, principal or otherwise) directly or indirectly compete, solicit
or do business (within the geographical areas set forth below) which is the
same, similar to or otherwise in competition with the business engaged in by the
Company or its Affiliates, with persons or entities: (A) who are customers of
the Company or its Affiliates; (B) who you solicited, negotiated, contracted,
serviced or had contact with on the Company’s or its Affiliates’ behalf;

 

2. The restrictions set forth above apply to the following geographical areas:
(a) each town, city and county of the United States and Canada, including
without limitation the states of North Carolina, Delaware, Massachusetts and
California and each state immediately adjacent to those states; (b) any city,
metropolitan area or county in which the Company or its Affiliates is located or
does or, during your consulting arrangement, did business; (c) any city,
metropolitan area or county in which your services were provided, or for which
you had responsibility, while providing services to the Company.

 

3. As used in this Agreement, “Competitor” means any company or person engaged
in providing quality control or testing technology, equipment or services for
the voice, VoIP, data or video communications industry.

 

4. You agree that the restrictive covenants contained above in this Agreement
are reasonably necessary to protect the Company’s and its Affiliates’ legitimate
business interests, are reasonable with respect to time and territory and scope
of activities prohibited, and do not interfere with public interest or public
policy. You further agree that the descriptions of the restrictive covenants
contained in this Agreement are sufficiently accurate and definite and you
understand the scope and meaning of the covenants. If any court should determine
that any provision of this Agreement is unenforceable for any reason, you
specifically agree and request that the court making such determination shall
modify and reform such provision or provisions and, in its or their modified
form, specifically enforce this Agreement.

 

5. The provisions of this Agreement will in no way act to diminish your
obligations to the Company or any Affiliate under any other agreement or
agreements related to confidentiality, non-competition or work products
previously executed by you or which you may execute in the future or
simultaneously with this Agreement.

 

6. You represent and warrant that your consulting arrangement with the Company
and performance under this Agreement will not breach any duty or obligation owed
by you to another under any contract or otherwise, violate any confidence of
another, or violate any law or recognized standard of ethics or business custom.

 

7. You agree that a breach or violation of the terms or conditions of this
Agreement will result in immediate and irreparable harm to the Company and/or
its Affiliates in an amount which may be impossible to ascertain at the time of
any breach or violation, and that the remedies at law for such breach may not
adequately compensate the Company and/or its

 

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Affiliates for such breach. Therefore, you agree that in the event of such a
breach, the Company and/or its Affiliates shall be entitled to injunctive relief
or such other remedy as a court of competent jurisdiction may provide. You
agree, however, that such remedy shall be cumulative and in addition to any
other remedy the Company and/or its Affiliates may have.

 

Confidential Information

 

1. You shall, during the period of your consulting arrangement with Company and
at all times thereafter, treat as confidential and, except as required by law or
in the performance of your duties with Company, not disclose, publish or
otherwise make available to the public or to any individual, firm, corporation
or other entity any Confidential Material (as hereinafter defined).

 

2. You agree that all Confidential Material, together with all of your notes and
records relating thereto, and all copies or other reproductions, electronic or
otherwise, thereof in your possession, are the exclusive property of Company and
you agree to return such material to Company promptly upon termination of your
consulting arrangement with the Company.

 

3. Notwithstanding the foregoing, it is understood and agreed that the foregoing
shall not apply to information or knowledge which was publicly available prior
to disclosure to you or becomes publicly available through no wrongful act or
failure by you.

 

4. For the purpose of this Agreement, the term “Confidential Material” shall
mean, all information of any nature and in any form relating to the business or
operations of the Company or any of its subsidiaries or affiliates which at the
time or times concerned is not generally known (or is known only because of
illegal or unauthorized disclosure), including, without limitation, advertising,
business contacts, computer applications, customer ‘s purchase requirements and
other requirements, customers, developments, discoveries, financial information,
know-how, methods of operation, intellectual property, other trade secrets,
patents and patent applications, price lists, processes, promotions, prospective
and executed contracts, research activities, supplier lists, techniques,
technology and inventions.

 

Assignment of Inventions

 

1. If at any time during your consulting arrangement with the Company, you shall
(either alone or with others) make, conceive, discover or reduce to practice any
invention, modification, discovery, design, development, improvement,
enhancement, process, formula, data, technique, computer program, framework,
methodology, analytical approach, work of authorship, know-how, trade secret or
other intellectual property right whatsoever or any interest therein (whether or
not patentable or registrable under copyright or similar statutes or subject to
analogous protection) that relates to the business of the Company (including its
subsidiaries or affiliates), or results from the use of premises or equipment
owned, leased or contracted for by the Company (including its subsidiaries or
affiliates) (collectively, “Inventions”), such Inventions and all intellectual
property rights worldwide therein and all the benefits thereof shall immediately
become the sole and absolute property of the Company.

 

2. You shall promptly disclose to the Company (or any persons designated by it)
each such Invention and hereby assign any rights you may have or acquire in the
Invention and benefits and/or rights resulting therefrom to the Company without
compensation; provided,

 

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however, that to the extent such assignment is not permitted by applicable law,
the Company shall at all times have the right to receive and you hereby grant to
the Company an exclusive, worldwide perpetual license to use in any manner it
deems appropriate the Inventions on a royalty free basis.

 

3. Upon disclosure of each Invention to the Company and thereafter, you shall,
at the request and expense of the Company, sign, execute, make and do all such
deeds, documents, acts and things as the Company and its duly authorized agents
may reasonably require:

 

(a) to apply for, obtain and vest in the name of the Company alone (unless the
Company otherwise directs) letters patent, copyrights, industrial designs or
other analogous protection in any country throughout the world and when so
obtained or vested to enforce, renew and restore the same; and

 

(b) to defend any opposition proceedings in respect of such applications and any
opposition proceedings or petitions or applications for revocation of such
letters patent, copyright, industrial designs or other analogous protection.

 

If the Company is unable, after reasonable effort, to secure your signature on
any document required in connection with letters patent, copyright, industrial
design or other analogous protection relating to an Invention, whether because
of your physical or mental incapacity or for any other reason whatsoever, you
hereby irrevocably designates and appoint the Company and its duly authorized
officers and agents as your agent and attorney-in-fact, to act for and in your
behalf and stead to execute and file any such documents or documents and to do
all other lawfully permitted acts to further the prosecution and issuance of
letters patent, copyright, industrial design or other analogous protection
thereon with the same legal force and effect as if executed by you.

 

General Provisions

 

1. You represent and warrant that the execution of this Agreement and your
consulting arrangement with the Company will not violate any non-disclosure
agreements, covenants against competition, or other restrictive covenants made
by you to or for the benefit of any previous employer or partner.

 

2. Waiver by the Company of any breach of any of the provisions of this
Agreement shall not operate or be construed as a waiver of any subsequent breach
by you.

 

3. If any provision of this Agreement is held to be unenforceable, invalid or
illegal by any court of competent jurisdiction, such unenforceable, invalid or
illegal provision shall not affect the remainder of this Agreement.

 

4. The provisions of this Agreement set forth under the captions:
“Non-Competition and Non-Solicitation”, “Confidential Information” and
“Assignment of Inventions” shall survive any termination of this Agreement.

 

5. This Agreement may be assigned by the Company but this Agreement is personal
to you and you may not assign your rights or delegate your responsibilities
under this Agreement. This Agreement shall be governed by and construed and
enforced in accordance

 

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with the laws of the Commonwealth of Massachusetts, without giving effect to
principles of conflicts of law. The Company and you shall make all reasonable
attempts to amicably resolve any disagreements arising out of this Agreement or
from a breach thereof (“Disputes”). All Disputes that the parties are unable to
amicably resolve shall be resolved exclusively in the Federal or State Courts
located in Boston, Massachusetts. Each party hereby consents to personal
jurisdiction in the foregoing courts. The language used in this Agreement is the
language chosen by the parties hereto to express their mutual intent, and no
rule of strict construction shall be applied against either party. Except as
expressly provided herein, this Agreement is the entire agreement between the
Company and you with respect to its subject matter. This Agreement shall be
binding upon and inure to the benefit of the parties and their respective
successors, heirs and permitted assigns. This Agreement may not be altered,
modified, changed or discharged except in writing signed by both you and the
Company.

 

Agreed and accepted:   Datameg Corporation

/s/ Joshua E. Davidson

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  By:  

/s/ Mark P. McGrath

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Joshua E. Davidson       Mark P. McGrath, Chairman

 

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