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Prepared by MERRILL CORPORATION

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EXHIBIT 10.13    
  

 
 

CONSULTING AGREEMENT    
  

    THIS AGREEMENT is entered into as of August 29, 2000, by and between PerfectData
Corporation, a California corporation, with its principal place of business at 110 West Easy Street, Simi Valley, California,
93065-1689 (hereinafter "CLIENT"), and Terry J. Bakerwith his principal place of business at  1595 Regatta Road, Laguna beach, California,
92651 (hereinafter "TJB"). CLIENT and TJB are hereinafter referred to as ("The Parties").
 

W I T N E S S E T H:  

    In consideration of the promises and mutual covenants hereinafter contained, the parties hereto agree as follows: 

	1.
	The
Services 

    TJB
shall cause the following consulting services to be performed (hereinafter referred to as "Services"). 

    TJB
shall work with CLIENT on the Retail Expansion Project. The specific tasks and deliverables of the Retail Expansion Project are
summarized in the attached Exhibit A. 

	2.
	Compensation
and Reimbursement

	(a)
	CLIENT
shall pay TJB a fee of $12,500.00 per month times 3 months. CLIENT will also reimburse TJB for related
out-of-pocket expenses (with documented receipts) including but not limited to travel and telephone expenses. Any expense greater than $250.00 will be pre-approved
by CLIENT.

	(b)
	TJB's
fees shall include and TJB shall be responsible for the payment of all federal, state and local taxes of any kind that are attributable to the compensation it receives.

	(c)
	TJB
shall be paid according to the following schedule: 

	Date
 
	 	Payment Due

	08/29/00	 	$	12,500.00
	09/29/00	 	$	12,500.00
	10/30/00	 	$	12,500.00
	 	 	

	Total	 	$	37,500.00

	(d)
	TJB
agrees to devote a full-time effort for the CLIENT towards the Retail Expansion Project.

	(e)
	CLIENT
shall issue to TJB, 60,000 Options to purchase common shares of PerfectData stock (PERF) at an exercised price of $3.00 per share, which will vest as follows:
(i) thirty three percent (33%) of the Shares at the end of the ninety day period from the date of this Agreement (the "Initial Vesting Date"),
(ii) thereafter, the remaining sixty seven percent (67%) of the shares in a series of two (2) successive equal ninety day installments upon the completion of each calendar three month
period measured from the date of the Initial Vesting Date. The Vesting period is created and defined with the assumption that, TJB will continue to perform contracted services past the initial ninety
days. If TJB's services do not extend past the initial ninety days of this agreement, then the remaining sixty seven percent (67%) of the shares will automatically terminate. All Options granted, will
carry piggyback registration rights. In any event, Company will use its best efforts to register stock within one year from the date of this agreement. 

E–2

 

	3.
	Confidential
Relationship

	(a)
	CLIENT
may, from time to time, communicate to TJB certain information to enable TJB to effectively perform the Services. TJB shall treat all such information as confidential,
whether or not so identified, and shall not disclose any part thereof without the prior written consent of CLIENT. TJB shall limit the use and circulation of such information, to the extent necessary
to perform the Services. The foregoing obligation of this Paragraph 3. however, shall not apply to any part of the information that (i) has been disclosed in publicly available sources
of information, (ii) is, through no fault of TJB, hereafter disclosed in publicly available sources of information, (iii) is not in the possession of TJB without any obligation of
confidentiality, or (iv) has been or is hereafter rightfully disclosed to TJB by a third party, but only to the extent that the use or disclosure thereof has been or is rightfully authorized by
that third party.

	(b)
	TJB
shall not disclose any reports, recommendations, conclusions or other results of the Services or the existence or the subject matter of this contract without the prior written
consent of CLIENT.

	(c)
	In
its performance hereunder, TJB shall comply with all legal obligations it may now or hereafter have respecting the information or other property of any other person, firm, or
corporation. 

	4.
	Proprietary
Rights 

    The
work product of the Services, and any writings, discoveries, inventions and innovations resulting from the Services, shall be promptly communicated to and become the property of
CLIENT. TJB shall perform all lawful acts requested by CLIENT, (i) to perfect CLIENT's title therein, and (ii) where applicable, to enable CLIENT, or its nominee to obtain and maintain
copyright, patent or other legal protection therefore anywhere in the world. Any such property that is copyrightable subject matter shall be considered a work made for hire, and CLIENT shall own the
copyright and all extensions thereof the full and exclusive rights comprised in any such property. 

	5.
	Term

    This
Agreement shall be effective for the period from August 29, 2000 to November 30, 2000. Either party may terminate
this agreement for any reason with 14 days advance written notice. If this Agreement is terminated before the above date. CLIENT's sole obligation shall be to pay TJB the amount due through the
term of this agreement. In the event of termination, or upon expiration of this Agreement, TJB shall return to CLIENT any and all equipment, documents, or materials, and all copies made thereof which
TJB received from CLIENT for the purposes of this Agreement. If CLIENT wishes to continue and/or extend the services of TJB, at the end of this initial agreement,
CLIENT agrees to contract TJB's services on a month to month basis, at a fee of $12,500 per month or at a renegotiated and mutually agreed upon rate. 

	6.
	Indemnification

    CLIENT
shall indemnify and save TJB harmless from any damages, liabilities, expenses, and costs (including attorney's fees and court costs) incurred by TJB arising from or relating to
this agreement, except for damages, liabilities, expenses, and costs resulting from TJB's misconduct or gross negligence in connection with this agreement. 

E–3

 
	7.
	Notices

    All
notices and billings shall be in writing and sent to the following addresses; 

	PerfectData Corporation	 	Mr. Terry J. Baker
	110 West Easy Street	 	1595 Regatta Road
	Simi Valley, CA 93065-1689	 	Laguna Beach, CA 92651

	8.
	General

	(a)
	The
terms and conditions of Paragraphs 3, 4 and 6 hereof shall survive the termination of this Agreement or completion of the Services, as the case may be.

	(b)
	TJB
shall not subcontract any of the Services to be performed without the prior written consent of CLIENT.

	(c)
	TJB
shall perform the Services as an independent contractor and shall not be considered an employee of CLIENT for any purpose.

	(d)
	TJB
shall maintain a presence within the CLIENT's offices at a minimum of 4 days per week, if not otherwise traveling on behalf of the CLIENT.

	(d)
	This
Agreement shall be governed by and construed in accordance with the state laws of the State of California.

	(e)
	This
Agreement shall constitute the entire understanding between TJB and CLIENT relating to the terms and conditions of the services to be performed by TJB. 

IN
WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date written above. 

	 PerfectData Corporation	 	Terry J. Baker
	

By:	
 	

/s/ HARRIS SHAPIRO   
 Harris Shapiro	
 	

By:	
 	

/s/ TERRY J. BAKER   
 Terry J. Baker
	

Date: August 29, 2000	
 	

Date: August 29, 2000

E–4

  

 
 

EXHIBIT A
  Tasks and Deliverables    
  

	1.
	Operations 
	(a)
	Assume
day-to-day operations of the company as its Vice President of Sales and Marketing.

	(b)
	Assess
and realign personnel resources for maximum effectiveness.

	(c)
	Minimize
operational expenses to maximize profits.

	(d)
	Implement
weekly reporting tools to measure inventories and revenue.

	(e)
	Manage
forecasting of products/raw materials/finished goods to suppliers.

	(f)
	Develop
operating budget to support $6M in revenue through 2001.

	(g)
	Review
potential acquisitions. 

	2.
	Sales
and Marketing 
	(a)
	Maximize
revenue of existing inventories.

	(b)
	Create,
execute and secure major channel partnerships for distribution of PerfectData products.

	(c)
	Develop
a 16 month sales forecast (Sept '00 thru Dec '01) for a target revenue of $6M.

	(d)
	Create
and implement a comprehensive marketing plan to obtain revenue target of $6M. 

E–5

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EXHIBIT 10.13

CONSULTING AGREEMENT

EXHIBIT A Tasks and DeliverablesPrepared by MERRILL CORPORATION

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EXHIBIT 10.14    
  

 
 

EMPLOYMENT AGREEMENT    
  

    EMPLOYMENT AGREEMENT, dated as of September 1, 2000, by and between PerfectData Corporation, a
California corporation with offices at 110 West Easy Street, Simi Valley California 03065 (the "Corporation"), and Harris Shapiro, an individual residing at 245 East 63rd Street, New York, New York
10021 (the "Executive"). 

W I T N E S S E T H  

    WHEREAS, the Executive currently serves as the Chairman of the Board of the Corporation; 

    WHEREAS, the Corporation desires to employ and retain the unique experience, ability and services of the Executive as a principal
executive officer of the Corporation; and 

    WHEREAS, the Executive and the Corporation desire to formalize in this Agreement the terms and conditions under which the Executive
shall be employed by the Corporation. 

    NOW, THEREFORE, the parties hereto mutually agree as follows: 

 
 

Article I
  Employment and Duties    
  

    1.1  Employment.  The Corporation hereby agrees to employ the Executive, and
Executive hereby agrees to accept employment, as the Interim Chief Executive Officer of the Corporation. 

    1.2  Duties.  The Executive shall properly perform such duties as may be assigned
to him from time to time by the Board of Directors of the Corporation; provided, however, that such duties must be commensurate with services to be performed by a Chief Executive Officer of a public
company. During the term of this Agreement, the Executive shall devote as much of his business time to the performance of his duties hereunder as he reasonably deems necessary. The Corporation
acknowledges that the Executive has other business interests, investments and investment opportunities which he may continue to pursue on his own behalf and from which the Corporation shall not
benefit. 

    1.3  Base of Operations.  The Executive's principal base of operations for the
performance of his duties and responsibilities under this Agreement shall be the offices of the Corporation established for him at his request in either California or New York, New York or the
Executive's personal offices in New York, New York. 

 
 

Article II
  Term    
  

    2.1  Term.  The term of this Agreement (the "Term") shall commence on
September 1, 2000 and shall terminate on August 31, 2000. 

 
 

Article III
  Compensation, Benefits and Expenses    
  

    3.1  Salary.  During the Term, the Corporation shall pay to the Executive a
salary at the rate of One Hundred Fifty Thousand Dollars ($150,000) per annum. Such compensation shall be paid to the Executive with the same frequency as other executives of the Corporation are
compensated. Any fees paid to Millennium Capital Corporation pursuant to the financial advisor agreement, dated January 20, 2000, with the Corporation shall be credited against the salary
payments due hereunder. 

E–6

 

    3.2  Benefits.  The Executive shall participate during the Term in such pension,
life insurance, health, disability and major medical insurance plans, and in such other employee benefit plans and programs, for the benefit of the employees of the Corporation, as may be maintained
from time to time during the Term, in each case to the extent and in the manner available to other senior officers of the Corporation and subject to the terms and provisions of such plans or programs. 

    3.3  Expenses.  The Corporation will reimburse the Executive for reasonable
business-related expenses incurred by him in connection with the performance of his duties hereunder during the Term, subject, however, to the Corporation's policies relating to business related
expenses as in effect from time to time during the Term. 

 
 

Article IV
  Miscellaneous    
  

    4.1  Entire Agreement.  This Agreement constitutes and embodies the full and
complete understanding and agreement of the parties with respect to the Executive's employment by the Corporation, supersedes all prior understandings and agreements, whether oral or written, between
the Executive and the Corporation and shall not be amended, modified or changed except by an instrument in writing executed by the party to be charged. The invalidity or partial invalidity of one or
more provisions of this Agreement shall not invalidate any other provision of this Agreement. No waiver by either party of any provision or condition to be performed shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same time or any prior or subsequent time. This Agreement does not supercede the financial advisor letter agreement, dated January 20, 2000
(the "Consulting Agreement"), between the Corporation, JDK Associates, Inc. and Millennium Capital Corporation, which shall survive this Agreement. The Corporation acknowledges that the
Executive is the sole shareholder of Millennium Capital Corporation and shall continue to render services on behalf of Millennium Capital Corporation and derive the benefits of the Consulting
Agreement, subject to Section 3.1 hereof. 

    4.2  Benefit of Agreement; Assignment; Beneficiary.  This Agreement shall inure
to the benefit of, and be binding upon, the Corporation and the Executive and their respective successors and assigns. 

    4.3  Headings.  The headings contained in this Agreement are for convenience of
reference only and shall not affect in any way the meaning or interpretation of this Agreement. 

    4.4  Notices.  All notices, requests, demands and other communications required
or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given when personally delivered, sent by registered or certified mail, return receipt requested, postage
prepaid, or by private overnight mail service (e.g., Federal Express) to the Executive or the Corporation, at the address set forth below: 

    Executive:
c/o Millennium Capital Corporation, 110 East 59th Street, New York, New York 10022. 

    Corporation:
110 West Easy Street, Simi Valley, California 03065 

    Notice
shall be deemed given on the date actually received, if personally delivered, three (3) business days after mailing or one (1) business day after sending by
overnight mail service. A party may change the address to which notice is to be sent by sending a notice to such effect as set forth above. 

    4.5  Governing Law.  This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without giving effect to such State's conflicts of laws provisions and each of the parties hereto irrevocably consents to the jurisdiction and venue
of the federal and state courts located in the State of New York, County of New York. 

E–7

 

    4.6  Counterparts.  This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 

    4.7  Agreement to Take Actions.  Each party hereto shall execute and deliver such
documents, certificates, agreements and other instruments, and shall take such other actions, as may be reasonably necessary or desirable in order to perform his or its obligations under this
Agreement or to effectuate the purposes hereof. 

    4.8  Review of this Agreement; No Conflicting Agreements; Termination of Prior
Agreements.  The Executive acknowledges that he has carefully read this Agreement and he hereby represents and warrants to the Corporation that his entering into
this Agreement, and the obligations and duties undertaken by him hereunder, will not conflict with, constitute a breach of or otherwise violate the terms of any employment or other agreement to which
he is a party and that he is not required to obtain the consent of any person, firm, corporation or other entity in order to enter into this Agreement. 

    4.9  Construction.  All pronouns and any variations thereof shall be deemed to
refer to the masculine, feminine or neuter, singular or plural, as the identity of the antecedent person or persons or entity or entities may require. 

    4.10  Conflict of Interest.  The parties hereto acknowledge that this Agreement
has been prepared by Wachtel & Masyr, LLP, counsel to the Executive and the Corporation, and the Executive and the Corporation waive any conflict of interest resulting from Wachtel &
Masyr, LLP, acting for both parties hereto. 

    IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date set forth above. 

	 	 	PERFECTDATA CORPORATION
	

 	
 	

By:	
 	

/s/ IRENE J. MARINO   
 Irene J. Marino
 Vice President, Finance
	

 	
 	

By:	
 	

/s/ HARRIS SHAPIRO   
 HARRIS SHAPIRO

E–8

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EXHIBIT 10.14

EMPLOYMENT AGREEMENT

Article I Employment and Duties

Article II Term

Article III Compensation, Benefits and Expenses

Article IV Miscellaneous

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