Exhibit 10.1.7
CONSULTING AGREEMENT
CONSULTING AGREEMENT (the "Agreement"), dated as of August 11, 1997 (the
"Commencement Date"), by and between Stratus Services Group, Inc., a Delaware
corporation (the "Company"), and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, an individual residing at ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ("Consultant").
WHEREAS, the Company is in the business of providing temporary staffing
services (the "Business"); and
WHEREAS, Consultant is an individual with experience in the Business; and
WHEREAS, the execution of this Agreement is a condition to the obligations
of the Company to consummate the transactions contemplated by the Asset Purchase
Agreement, dated as of July 9, 1997, among the Company, Royalpar Industries,
Inc., ▇▇▇▇▇ Technical Design, Inc., LPL Technical Service, Inc., and Mainstream
Engineering Co., Inc. (the "Purchase Agreement").
WHEREAS, the Company desires to retain Consultant as a consultant and
Consultant is desirous of, and wishes to enter into, such an arrangement, on the
terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
set forth herein, the parties hereby agree as follows:
1. DEFINITIONS
As used in this Agreement, the following terms shall have the meanings set
forth below:
1.1 "Additional Term" shall have the meaning assigned to it in Section 3.
1.2 "Affiliate" shall mean a corporation which, directly or indirectly,
controls, is controlled by or is under common control with the Company, and for
purposes hereof, "control" shall mean the ownership of 20% or more of the Voting
Stock of the corporation in question.
1.3 "Board" shall mean the Board of Directors of the Company.
1.4 "Business" shall mean the business to be conducted by the Company,
including providing temporary staffing services and other enterprises related
thereto in which the Company shall engage.
1.5 "Commencement Date" shall be the effective date of the Closing (as
such term is defined in the Purchase Agreement) under the Purchase Agreement.
1.6 "Confidential Information" shall include, without limitation by reason
of specification, any information, including, without limitation, trade secrets,
subscriber, advertiser, vendor and customer lists, pricing policies, operational
methods, methods of doing business, technical processes, formulae, designs and
design projects, inventions, research projects, strategic plans, product
information, production know-how and other business affairs of the Company or
its Affiliates, which (i) is or are designed to be used in or are or may be
useful in connection with the Business of the Company or any Affiliate thereof,
or which, in the case of any of these entities, results from any of the research
or development activities of any such entity, which (ii) is private or
confidential in that it is not generally known or available to the public,
except as the result of unauthorized disclosure by or information supplied by
Consultant, or (iii) which gives the Company or any Affiliate an opportunity or
the possibility of obtaining an advantage over competitors who may not know or
use such information or who are not lawfully permitted to use the same.
1.7 "Disability" shall mean that the Company has determined that as a
result of mental and/or physical illness of Consultant, Consultant is unable to
perform his services hereunder or in accordance with the terms of this
Agreement.
1.8 "Initial Term" shall have the meaning assigned to it in Section 3.
1.9 "Person" shall mean any individual, sole proprietorship, partnership,
joint venture, trust, unincorporated organization, association, corporation,
institution, public benefit corporation, entity or government (whether Federal,
state, county, city, municipal or otherwise, including, without limitation, any
instrumentality, division, agency, body or department thereof).
1.10 "Service Area" shall mean the continental United States of America.
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1.11 "Subsidiary" shall mean a corporation of which more than 50% of the
Voting Stock is owned, directly or indirectly, by the Company.
1.12 "Termination Date" shall have the meaning assigned to it in Section
3.
1.13 "Voting Stock" shall mean capital stock of a corporation which gives
the holder the right to vote in the election of directors for such corporation
in the ordinary course of business and not as the result of, or contingent upon,
the happening of any event.
Wherever from the context it appears appropriate, each word or phrase
stated in either the singular or the plural shall include the singular and the
plural, and each pronoun stated in the masculine, feminine or neuter gender
shall include the masculine, feminine and neuter.
2. RETENTION AND DUTIES OF CONSULTANT
2.1 Retention; Duties. The Company hereby retains Consultant, and
Consultant hereby accepts appointment as consultant to the Company. The
principal duty of Consultant shall be as described in Exhibit A.
Consultant shall receive instructions for the performance of its duties
hereunder from the President of the Company.
2.2 Performance of Duties. Consultant will devote substantially all his
working time and effort during the Initial Term and any Additional Term. During
the Initial Term and any Additional Term, Consultant shall not engage in or
become employed directly in the commercial or professional business of any other
Person, nor shall he act as a consultant to or provide any services to, whether
on a remunerative basis or otherwise, the commercial or professional business of
any other Person, in each case which is directly competitive with the Business
of the Company, without the written consent of the Board, which consent will not
be unreasonably withheld.
3. TERM OF CONSULTATION
3.1 Initial Term. The retention of Consultant pursuant to this Agreement
shall commence as of the Commencement Date and end on the six month anniversary
of the
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Commencement Date (the "Initial Term"), unless sooner terminated pursuant to
Section 6 of this Agreement or extended as provided in Section 3.2 (the
"Termination Date").
3.2 Extension of Term. If Consultant's services hereunder have not
previously been terminated in accordance with Section 6 hereof, then at the end
of the Initial Term the term of this Agreement shall be automatically extended
for successive six month terms (an "Additional Term"), unless the Company shall
provide written notice to Consultant one month or more prior to such end of the
Additional Term that this Agreement will not be so extended. The rights of
termination set forth in Section 6 shall be applicable during such extended
term.
4. COMPENSATION
The Company shall pay Consultant as compensation for all of the services
to be rendered by him hereunder during the Initial Term and any Additional Term,
and in consideration of the various restrictions imposed upon Consultant during
the Initial Term and any Additional Term, and otherwise under this Agreement,
$9,5833.33 per month. In addition, the Company will make available to Consultant
an office and secretarial support and employee welfare benefits made available
to employees of the Company.
5. REIMBURSEMENT FOR EXPENSES
The Company shall pay or reimburse Consultant for all reasonable expenses
actually incurred or paid by him during the Initial Term and any Additional Term
in the performance of his services under this Agreement, upon presentation of
such bills, expense statements, vouchers or such other supporting information as
the Company may reasonably require. In the event the Company requires Consultant
to travel on business during the Initial Term or any Additional Term, Consultant
shall be reimbursed for such travel expenses in accordance with this Section.
6. TERMINATION OF AGREEMENT
6.1 Termination for Cause. The Company may terminate this Agreement
hereunder at any time by written notice for cause given to Consultant by the
Board after compliance with
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this Section. The Termination Date shall be the date such written notice is
given. The following constitutes the only conduct which serves as the basis for
termination of this Agreement "for cause": (i) gross or willful neglect of the
duties assigned to Consultant under this Agreement or material breach by
Consultant of this Agreement in each case continuing 90 days after written
notice to Consultant from the Board of such neglect or breach and the failure by
Consultant to take reasonable corrective actions, or (ii) Consultant declines to
follow any written, lawful instruction of the Board consistent with this
Agreement. The determination of whether "cause" exists for purposes of the
foregoing shall be made by the Board after Consultant has been offered the
opportunity to participate with his advisors including his legal counsel in the
deliberations of the Board. The determination by the Board as to "cause" must be
in writing, stating, in detail, the basis for termination for cause. Such
determination by the Board may not be made by the Board until after Consultant
shall have been offered the opportunity to participate in the deliberations of
the Board on this issue as provided above.
6.2 Termination for Death of Disability. This Agreement will terminate
upon the death of Consultant or upon thirty (30) days' prior written notice from
the Company to Consultant in the event of Disability of Consultant.
6.3 Termination Without Cause. After the Initial Term, Consultant may
terminate this Agreement hereunder for any reason whatsoever after written
notice by him to the Company. The Termination Date shall be thirty (30) days
after the giving of such notice.
6.4 Payment Upon Termination. On and after the Termination Date,
Consultant shall not be entitled to any further payments from the Company
hereunder; provided, however, that Consultant shall be entitled to payment of
his fees pursuant to Section 4 through the Termination Date to the extent not
paid and Consultant will also be reimbursed for expenses in accordance with
Section 5 properly incurred prior to the Termination Date.
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7. REPRESENTATIONS AND WARRANTIES BY CONSULTANT
Consultant hereby represents and warrants to the Company, the same being
part of the essence of this Agreement, that as of the Commencement Date, he is
not a party to any agreement, contract or understanding, and that no facts or
circumstances exist which would in any way restrict or prohibit him in any
material way from undertaking or performing any of his obligations under this
Agreement. The foregoing representation and warranty shall remain in effect
throughout the Initial Term and any Additional Term.
8. CONFIDENTIAL INFORMATION AND PROPRIETARY INTERESTS
8.1 Acknowledgment of Confidentiality. Consultant understands and
acknowledges that he may obtain Confidential Information during the course of
his retention hereunder by the Company. Consultant further acknowledges that the
services to be rendered by him are of a special, unique and extraordinary
character and that, in connection with such services, he will have access to
Confidential Information vital to the Company's and Affiliates' business.
Accordingly, Consultant agrees that he shall not, either during the Initial Term
or any Additional Term or at any time within one year after the Termination
Date, (i) use or disclose any such Confidential Information outside the Company
and Affiliates; or (ii), except as required in the proper performance of its
services hereunder, remove or aid in the removal from the premises of the
Company or any Affiliate, of any Confidential Information or any property or
material relating thereto.
The foregoing confidentiality provisions shall cease to be applicable to
any Confidential Information which becomes generally available to the public
(except by reason of or as a consequence of a breach by Consultant of his
obligations under this Section 8).
In the event Consultant is required by law or a court order to disclose
any such Confidential Information, he shall promptly notify the Company of such
requirement and provide the Company with a copy of any court order or of any law
which in his opinion requires such
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disclosure and, if the Company so elects, permit the Company an adequate
opportunity, at its own expense, to contest such law or court order.
8.2 Delivery of Material. Consultant shall promptly, and without charge,
deliver to the Company on the termination of his retention hereunder, or at any
other time the Company may so request, all memoranda, notes, records, reports,
manuals, computer disks, videotapes, drawings, blueprints and other documents
(and all copies thereof) relating to the Business of the Company and the
Affiliates, and all property associated therewith, which he may then possess or
have under his control.
8.3 Vendor Lists. Consultant acknowledges that (i) all lists of customers
and vendors of the Company or of its Affiliates developed during the course of
Consultant's retention and/or by the Company are and shall be the sole property
of the Company and its Affiliates, as the case may be, and Consultant further
acknowledges and agrees that he neither has nor shall have any personal right,
title or interest therein; (ii) such lists are and must continue to be
confidential; and (iii) such lists are not readily accessible to competitors of
the Company or its Affiliates.
8.4 Ideas, Programs, Etc. If, during the Initial Term or any Additional
Term, Consultant invents or develops any ideas, vendor lists or the like,
relating to or useful in connection with the Business of the Company as a result
of his retention hereunder, the same are and shall remain the property of the
Company, and he will promptly deliver all copies of the same to the Company,
assign his interest therein to the Company and execute such documents as
Company's counsel may request to convey title thereto to the Company. Consultant
shall not be entitled to any compensation, other than as provided in this
Agreement, for carrying out his obligations to the Company under Subsection 8.4
or any other Subsection of this Section 8.
8.5 Extension of Section 8. All of the provisions of Section 8 shall be
deemed to be applicable to all Confidential Information, and to all ideas,
programs, etc., as referred to in Subsection 8.4, to which Consultant may have
obtained access or which he may have invented or developed during his retention
by the Company.
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8.6 Noncompetition. During the Initial Term and any Additional Term(s),
Consultant shall not, either directly or indirectly, (a) solicit, service,
obtain, or accept orders for services competitive with those of the Company from
any of the Company's actual or prospective customers; (b) commence, engage in,
or participate in any business competitive with that of the Company within the
geographic area in which the Company does business; or, (c) solicit, divert,
take away, interfere with, or attempt to induce any employee or agent of the
Company to leave his employ with the Company in order to participate in any
business competitive with the Company.
9. DISPUTES AND REMEDIES
9.1 WAIVER OF JURY TRIAL. CONSULTANT AND THE COMPANY HEREBY WAIVE THE
RIGHT TO A TRIAL BY JURY IN THE EVENT OF ANY DISPUTE WHICH ARISES UNDER THIS
AGREEMENT.
9.2 Injunctive Relief. If Consultant commits a breach, or threatens to
commit a breach, of any of the provisions of Section 8, the Company shall have
the following rights and remedies (each of which shall be independent of the
other, and shall be severally enforceable, and all of which shall be in addition
to, and not in lieu of, any other rights and remedies available to the Company
at law or in equity):
(i) the right and remedy to have the provisions of this Agreement
specifically enforced by any court having equity jurisdiction, it being
acknowledged by Consultant that any such breach or threatened breach will or may
cause irreparable injury to the Company and that money damages will or may not
provide an adequate remedy to the Company; and
(ii) the right and remedy to require Consultant to account for and
pay over to the Company all compensation, profits, monies, increments, things of
value or other benefits, derived or received by Consultant as the result of any
acts or transactions constituting a breach of any of the provisions of Section 8
of this Agreement, and Consultant hereby agrees to account for
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and pay over all such compensation, profits, monies, increments, things of value
or other benefits to the Company.
9.3 Partial Enforceability. If any provision contained in Section 8, or
any part thereof, is construed to be invalid or unenforceable, the same shall
not affect the remainder of Consultant's agreements, covenants and undertakings,
or the other restrictions which he has accepted, in Section 8, and the remaining
such agreements, covenants, undertakings and restrictions shall be given the
fullest possible effect, without regard to the invalid parts.
9.4 Intention of Parties. It is therefore the specific intention of the
parties, any general considerations of public policy to the contrary
notwithstanding, that the provisions of Section 8 of this Agreement shall be
enforced as written and to the fullest extent possible.
9.5 Adjustment of Restrictions. Despite the prior provisions of this
Section 9, if any covenant or agreement contained in Section 8, or any part
thereof, is held by any court of competent jurisdiction to be unenforceable
because of the duration of such provision, the court making such determination
shall have the power to reduce the duration of such provision and, in its
reduced form, such provision shall be enforceable.
9.6 Attorneys Fees and Expenses. In the event that any action, suit or
other proceeding at law or in equity is brought to enforce the provisions of
this Agreement, or to obtain money damages for the breach thereof, and such
action results in the award of a judgment for money damages or in the granting
of any injunction in favor of the Company, then all reasonable expenses,
including, but not limited to, reasonable attorneys' fees and disbursements
(including those incurred on appeal) of the Company in such action, suit or
other proceeding shall (on demand of the Company) forthwith be paid by
Consultant. If such action results in a judgment in favor of Consultant, then
all reasonable expenses, including but not limited to, reasonable attorney's
fees and disbursements (including those incurred on appeal) of Consultant in
such action, suit or other proceeding shall (on demand of Consultant) forthwith
be paid by the Company.
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10. SURVIVAL
The provisions of Sections 8 and 9 and this Section 10 shall survive
termination of this Agreement and remain enforceable according to their terms.
11. SEVERABILITY
The invalidity or unenforceability of any provision of this Agreement
shall in no way affect the validity or enforceability of any other provisions
hereof.
12. NOTICES
All notices, demands and requests required or permitted to be given under
the provisions of this Agreement shall be deemed duly given if made in writing
and delivered personally or mailed by postage prepaid certified or registered
mail, return receipt requested, accompanied by a second copy sent by ordinary
mail, which notices shall be addressed as follows:
If to the Company:
Stratus Services Group, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
with a copy to:
Crummy, Del Deo, Dolan, Griffinger & ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇., Esq.
If to Consultant:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
By notifying the other parties in writing, given as aforesaid, any party
may from time-to-time change its address or the name of any person to whose
attention notice is to be given, or
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may add another person, to whose attention notice is to be given, in connection
with notice to any party.
13. ASSIGNMENT AND SUCCESSORS
Neither this Agreement nor any of his rights or duties hereunder may be
assigned or delegated by Consultant. This Agreement is not assignable by the
Company except to any successor in interest which takes over all or
substantially all of the business of the Company, as it is conducted at the time
of such assignment. Any corporation into or with which the Company is merged or
consolidated or which takes over all or substantially all of the business of the
Company shall be deemed to be a successor of the Company for purposes hereof.
This Agreement shall be binding upon and, except as aforesaid, shall inure to
the benefit of the parties and their respective successors and permitted
assigns.
14. ENTIRE AGREEMENT AND WAIVER
14.1 Integration. This Agreement contains the entire agreement of the
parties hereto on its subject matter and supersedes all previous agreements
between the parties hereto, written or oral, express or implied, covering the
subject matter hereof. No representations, inducements, promises or agreements,
oral or otherwise, not embodied herein, shall be of any force or effect.
14.2 No Waiver. No waiver or modification of any of the provisions of this
Agreement shall be valid unless in writing and signed by or on behalf of the
party granting such waiver or modification. No waiver by any party of any breach
or default hereunder shall be deemed a waiver of any repetition of such breach
or default or shall be deemed a waiver of any other breach or default, nor shall
it in any way affect any of the other terms or conditions of this Agreement or
the enforceability thereof. No failure of the Company to exercise any power
given it hereunder or to insist upon strict compliance by Consultant with any
obligation hereunder, and no custom or practice at variance with the terms
hereof, shall constitute a waiver of the right of the Company to demand strict
compliance with the terms hereof.
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Consultant shall not have the right to sign any waiver or modification of
any provisions of this Agreement on behalf of the Company, nor shall any action
taken by Consultant reduce his obligations under this Agreement.
This Agreement may not be supplemented or rescinded except by instrument
in writing signed by all of the parties hereto after the Commencement Date.
Neither this Agreement nor any of the rights of any of the parties hereunder may
be terminated except as provided herein.
15. GOVERNING LAW
This Agreement shall be governed by and construed, and the rights and
obligations of the parties hereto enforced, in accordance with the laws of the
State of New Jersey without reference to the conflict of laws principles
thereof.
16. HEADINGS
The Section and Subsection headings contained herein are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.
17. EMPLOYMENT, PARTNERSHIP, ETC. STATUS
The Company and Consultant agree that Consultant is not an employee of the
Company and this Agreement does not constitute a partnership or joint venture
between the Company and Consultant. Consultant is an independent contractor with
respect to the Company.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above, which shall be deemed to be the Commencement Date.
STRATUS SERVICES GROUP, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Name:
Title: President
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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EXHIBIT A
Responsibilities: Consultant will supervise the collection of accounts
receivable for Royalpar Industries, Inc., ▇▇▇▇▇
Technical Design, Inc., LPL Technical Service, Inc.,
and Mainstream Engineering Co., Inc. ("RII") and will
use all of his efforts to maintain all existing
relationships with each of RII's clients in order to
effect a smooth and orderly transition from RII to
the Company. In addition, Consultant will assist in
due diligence of acquisitions of similar companies by
the Company.