Consulting Agreement Twincraft, Inc., with Fifth Element, Inc.
Twincraft,
Inc., with Fifth Element, Inc.
Consulting
Agreement
(the
"Agreement"), dated as of January 23, 2007 (the “Commencement Date”), between
Twincraft, Inc., a Vermont corporation (the “Company," which term includes all
subsidiaries of the Company, whether now in existence or hereafter created,
established or acquired), and Fifth Element, Inc. (the "Consultant"), and ▇▇.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (the “Principal”).
W
I T N E S S E T H :
Whereas,
the
parties are entering into this Agreement pursuant to the terms of that certain
stock purchase agreement (the "Purchase Agreement") dated as of November 14,
2006, among ▇▇▇▇▇▇, Inc., a Delaware corporation (the "Purchaser" or the
"Parent"), and the persons, including the Principal (as hereinafter defined),
who, immediately prior to the closing of the Purchase Agreement, are or were
the
stockholders of the Company (such persons, including the Principal, the
"Sellers"), pursuant to which Purchase Agreement the Purchaser will acquire
from
the Sellers (including the Consultant) all the outstanding capital stock of
the
Company;
Whereas,
the
Principal is the principal and controlling stockholder, officer and director
of
the Consultant, prior to closing of the Purchase Agreement, the Principal was
a
stockholder, officer, director and key Consultant of the Company;
Whereas,
the
Company desires to engage the Consultant so that it may have the services of
the
Consultant and the Principal, and to be assured of the Consultant's and
Principal's services on the terms and conditions hereinafter set forth;
and
Whereas,
the
Consultant is willing to accept such engagement on such terms and conditions,
and the Principal is willing to join in and personally guarantee to the
Consultant and
the Company
that the
Principal will make himself available to the Company in accordance with the
requirements and obligations of the Consultant hereunder.
Now,
Therefore,
in
consideration of the mutual covenants and agreements set forth in this
Agreement, the Company, the Consultant and the Principal hereby agree as
follows:
1. Term.
The term
of this Agreement shall commence on the Commencement Date and shall expire
on
the third anniversary of Commencement Date (the “Term”), subject to earlier
termination as provided herein.
2. Duties.
(a)
During the Term of this Agreement, the Consultant shall cause the Principal
to
shall serve as the Vice President of Sales and Marketing of the Company, or
in
such other executive capacity as may be assigned to the Principal, and shall
perform all duties as may be assigned to the Principal by the Chairman of the
Board of Directors or the Chief Executive Officer of the Company or such other
person(s) as may be designated by the Board of Directors of the Company (the
“Company Board”) or the Board of Directors of the Parent (the "Parent Board").
The Consultant shall cause the Principal to devote the Principal's full business
time and energies to the business and affairs of the Company and the Parent,
and
the Consultant shall cause the Principal to use his best efforts, skills and
abilities to promote the interests of the Company and the Parent, and the
Consultant shall cause the Principal to diligently and competently perform
the
duties of the Principal's position.
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(b) The
Consultant shall cause the Principal to report to the Chief Executive Officer
of
the Company or the Parent, or such other person(s) as may be designated by
the
Company Board or Parent Board and shall at all times keep the Parent's Chief
Executive Officer (or such other officer as the Company Chief Executive Officer
or the Company Board or Parent Board may designate from time to time) promptly
and fully informed (in writing if so requested) of the Principal's conduct
and
of the business or affairs of the Company and the Parent for which the Principal
is responsible, and provide such explanations of the Principal's conduct as
may
be required.
3. Compensation,
Bonus, Stock Options, Benefits, etc.
(a) Fees.
During
the Term of this Agreement, the Company shall pay to the Consultant, and the
Consultant shall accept from the Company, as compensation for the performance
of
services under this Agreement and the Consultant's and Principal's observance
and performance of all of the provisions hereof, a consulting fee at the annual
rate of $208,000 (the "Base Consulting Fee"). The Base Consulting Fee shall
be
payable at the same time that the Company pays compensation to its employees.
The Consultant’s performance and the Base Consulting Fee shall be subject to
annual review by the Company, provided that the Base Consulting Fee shall not
be
decreased.
(b) Bonus.
In
addition to the Base Consulting Fee described above, the Consultant shall,
in
the sole and absolute discretion of the Compensation Committee of the Parent
Board, be entitled to performance bonuses which may be based upon a variety
of
factors, including the Consultant’s performance and the achievement of goals,
all as determined in the sole and absolute discretion of the Parent Board or
Compensation Committee of the Parent Board. In addition, the Consultant may
be
entitled to participate in such other bonus plans as the Compensation Committee
of the Parent Board may, in its sole and absolute discretion, determine. To
the
extent not inconsistent with the foregoing provisions, the bonuses payable
hereunder shall be determined on a basis consistent with the past practice
of
the Company.
(c) Stock
Options.
The
Company shall issue and grant to Consultant options to purchase 100,000 shares
of the Company’s common stock (“Common Stock”) having an exercise price equal to
the closing price of the Common Stock on the date of grant, of which
(i) 33,333 shall vest on the second anniversary of the Commencement Date;
(ii) 33,333 shall vest on the third anniversary of the Commencement Date;
and (iii) 33,334 shall vest on the fourth anniversary of the Commencement
Date. During the Term of this Agreement the Consultant will not offer for sale,
sell, pledge, assign, hypothecate or otherwise create any interest in or dispose
of (or enter into any transaction or device that is designed to, or could
reasonably be expected to, result in any of the foregoing) any shares of Common
Stock owned by the Consultant on the Commencement Date or any shares of Common
Stock owned or acquired by him after the Commencement Date upon the conversion
or exercise of options or any securities convertible into or exercisable or
exchangeable for Common Stock, without first notifying the Chief Executive
Officer of the Parent in writing to inquire as to whether there exist any facts
or circumstances that would make it inadvisable for the Company or the Parent
if
the Consultant engaged in such transaction. The terms and provisions of such
options shall be set forth in a stock option agreement in a form satisfactory
to
the Company. In addition, the Consultant may be entitled, during the term of
this Agreement, to receive such additional options, at such exercise prices
and
other terms as the Compensation Committee of the Parent Board may, in its sole
and absolute discretion, determine.
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(d) Reimbursement
of Business Expenses.
During
the Term of this Agreement, upon submission of proper invoices, receipts or
other supporting documentation reasonably satisfactory to the Company and in
accordance with and subject to the Company’s expense reimbursement policies, the
Consultant shall be reimbursed by the Company for all reasonable business
expenses actually and necessarily incurred by the Consultant on behalf of the
Company in connection with the performance of services under this Agreement.
In
addition, the Consultant shall receive a non-accountable expense allowance
of
$3,000 per year, payable monthly.
4. Representations
and Agreements of Consultant and Principal.
(a) The
Consultant represents and warrants that neither the Consultant nor the Principal
is party to, or bound by, any agreement or commitment, or subject to any
restriction, including but not limited to agreements related to previous
employment or consultancy containing confidentiality or noncompetition
covenants, which presently has or may in the future have a possibility of
adversely affecting the business of the Company or the performance by the
Consultant or the Principal of the services, obligations and duties of the
Consultant and Principal under this Agreement.
(b) During
the Term and the Severance Period (as defined in Section 7(f)), if any, the
Consultant agrees that the Consultant will not offer for sale, sell, pledge,
assign, hypothecate or otherwise create any interest in or dispose of (or enter
into any transaction or device that is designed to, or could reasonably be
expected to, result in any of the foregoing) any shares of Common Stock owned
by
the Consultant on the Commencement Date or any shares of Common Stock owned
or
acquired by him after the Commencement Date upon the conversion or exercise
of
options or any securities convertible into or exercisable or exchangeable for
Common Stock, without first notifying the Chief Executive Officer of the Parent
in writing to inquire as to whether there exist any facts or circumstances
that
would make it inadvisable for the Company or the Parent if the Consultant
engaged in such transaction. The Consultant shall not transfer any securities
of
the Parent to the Principal unless and until the Principal affirmative
undertakes in writing to the Company and the Parent to be bound by such further
restrictions on the transfer of securities of the Company as may be applicable
to the Consultant.
(c) The
representations, warranties and covenants of this Section 4 shall survive
termination of the Consultant’s engagement hereunder and the expiration of the
Term hereof.
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(d) The
Consultant hereby joins in and personally guarantees to the Consultant and
the
Company that the Principal will make himself available to the Company in
accordance with the requirements and obligations of the Consultant
hereunder.
(e) The
Consultant understands and agrees that neither the Consultant nor the Principal
shall be entitled to participate in or benefit from the Company's medical
insurance and other fringe benefit plans or policies as the Company may make
available to, or have in effect for, its senior executive officers or other
personnel from time to time. The Principal shall receive only such benefits,
if
any, as agreed between the Consultant and the Principal, from the Consultant,
at
the sole expense of the Consultant. The Consultant warrants and represents
that
the Principal is entitled to no more than three weeks' vacation in each calendar
year, and sick leave not in excess of the sick leave as set forth in
Exhibit
___
attached
hereto. The Consultant agrees that if the Company amends its sick leave policies
for executives employed by the Company, the Consultant will amend its sick
leave
policies applicable to the Principal to conform to the Company's sick leave
policies.
5. Confidentiality,
Noncompetition, Nonsolicitation and Non-Disparagement.
For
purposes of this Section 5, all references to the Company shall be deemed to
include the Parent and all its subsidiaries, including the Company all its
subsidiaries, whether now existing or hereafter established or acquired. In
consideration for the compensation provided to the Consultant pursuant to this
Agreement, the Consultant and the Principal each agrees to the provisions of
this Section 5.
(a) Confidential
Information.
(i) The
Consultant and Principal each acknowledges that as a result of the Consultant's
engagement, the Consultant and Principal each has and will continue to have
knowledge of, and access to, proprietary and confidential information of the
Company, including, without limitation, research and development plans and
results, software, databases, technology, inventions, trade secrets, technical
information, know-how, plans, specifications, methods of operations, product
and
service information, product and service availability, pricing information
(including pricing strategies), financial, business and marketing information
and plans, and the identity of customers, clients and suppliers (collectively,
the “Confidential Information”), and that the Confidential Information, even
though it may be contributed, developed or acquired by the Consultant and/or
the
Principal, constitutes valuable, special and unique assets of the Company
developed at great expense which is the exclusive property of the Company.
Accordingly, the Consultant and/or Principal shall not, at any time, either
during or subsequent to the Term of this Agreement, use, reveal, report,
publish, transfer or otherwise disclose to any person, corporation or other
entity, any of the Confidential Information without the prior written consent
of
the Company, except to responsible officers and Consultants of the Company
and
other responsible persons who are in a contractual or fiduciary relationship
with the Company and who have a need for such Confidential Information for
purposes in the best interests of the Company, and except for such Confidential
Information which is or becomes of general public knowledge from authorized
sources other than the Consultant.
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(ii) The
Consultant and Principal each acknowledges that the Company would not enter
into
this Agreement without the assurance that all the Confidential Information
will
be used for the exclusive benefit of the Company.
(b) Return
of Confidential Information.
Upon
the termination of this Agreement or upon the request of the Company, the
Consultant and Principal each shall promptly return to the Company all
Confidential Information in their possession or control, including but not
limited to all drawings, manuals, computer printouts, computer databases, disks,
data, files, lists, memoranda, letters, notes, notebooks, reports and other
writings and copies thereof and all other materials relating to the Company’s
business, including without limitation any materials incorporating Confidential
Information.
(c) Inventions,
etc.
During
the Term and for a period of one year thereafter, the Consultant and the
Principal will promptly disclose to the Company all designs, processes,
inventions, improvements, developments, discoveries, processes, techniques,
and
other information related to the business of the Company conceived, developed,
acquired, or reduced to practice by the Consultant or Principal alone or with
others during the Term of this Agreement, whether or not conceived during
regular working hours, through the use of Company time, material or facilities
or otherwise (“Inventions”).
The
Consultant and Principal each agrees that all copyrights created in conjunction
with the Consultant's service to the Company and other Inventions, are “works
made for hire” (as that term is defined under the Copyright Act of 1976, as
amended). All such copyrights, trademarks, and other Inventions shall be the
sole and exclusive property of the Company, and the Company shall be the sole
owner of all patents, copyrights, trademarks, trade secrets, and other rights
and protection in connection therewith. To the extent any such copyright and
other Inventions may not be works for hire, the Consultant and Principal each
hereby assigns to the Company any and all rights the Consultant and Principal
now has or may hereafter acquire in such copyrights and any other Inventions.
Upon request the Consultant and Principal shall deliver to the Company all
drawings, models and other data and records relating to such copyrights,
trademarks and Inventions. The Consultant and Principal each further agrees,
as
to all such Inventions, to assist the Company in every proper way (but at the
Company’s expense) to obtain, register, and from time to time enforce patents,
copyrights, trademarks, trade secrets, and other rights and protection relating
to said Inventions in and all countries, and to that end the Consultant and
Principal each shall execute all documents for use in applying for and obtaining
such patents, copyrights, trademarks, trade secrets and other rights and
protection on and enforcing such Inventions, as the Company may desire, together
with any assignments thereof to the Company or persons designated by it. Such
obligation to assist the Company shall continue beyond the termination of the
Consultant’s service to the Company, but the Company shall compensate the
Consultant at a reasonable rate after termination of service for time actually
spent by the Consultant at the Company’s request for such assistance. In the
event the Company is unable, after reasonable effort, to secure the Consultant’s
signature on any document or documents needed to apply for or prosecute any
patent, copyright, trademark, trade secret, or other right or protection
relating to an Invention, whether because of the Consultant’s dissolution and/or
the Principal’s physical or mental incapacity or for any other reason
whatsoever, the Consultant and Principal each hereby irrevocably designates
and
appoints the Company and its duly authorized officers and agents as the
Consultant's and Principal’s agent coupled with an interest and
attorney-in-fact, to act for and in the Consultant's and Principal’s behalf and
stead to execute and file any such application or applications and to do all
other lawfully permitted acts to further the prosecution and issuance of
patents, copyrights, trademarks, trade secrets, or similar rights or protection
thereon with the same legal force and effect as if executed by the Consultant.
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(d) Non-competition.
The
Consultant and Principal each agrees that it/he will not utilize the
Consultant's or Principal’s special knowledge of the business operations of the
Company or its customers, suppliers and others to compete with the Company.
During the Term of this Agreement and (i) for a period of (A) one year
after the termination of this Agreement pursuant to Sections 7(a), 7(b) or
7(e)
hereof, as applicable; or (B) in the event of termination pursuant to
Section 7(c), the duration of the Severance Period (as defined in Section 7(f));
or (ii) in the event the Agreement is not renewed, the Severance Period, if
any; neither the Principal nor the Consultant shall engage, directly or
indirectly, or have an interest, directly or indirectly, anywhere in the United
States of America or any other geographic area where the Company does business
or in which its products or services are marketed, alone or in association
with
others, as principal, officer, agent, consultant, director, partner or
stockholder (except with respect to the Consultant's engagement by the Company),
or through the investment of capital, lending of money or property, rendering
of
services or otherwise, in any business competitive with or substantially similar
to that engaged in by the Company during the Term of this Agreement (it being
understood hereby, that the ownership by the Consultant or Principal,
collectively, of five percent (5%) or less of the stock of any company listed
on
a national securities exchange shall not be deemed a violation of this Section
5).
(e) Non-solicitation.
During
the Term of this Agreement and (i) for a period of (A) one year after
the termination of this Agreement pursuant to Sections 7(a), 7(b) or 7(e)
hereof, as applicable; or (B) in the event of termination pursuant to
Section 7(c), the duration of the Severance Period (as defined in Section 7(f));
or (ii) in the event the Agreement is not renewed, the Severance Period, if
any, the Consultant and Principal each agrees that it/he shall not, and shall
not permit any of the Consultant's employees, agents or others under the
Consultant's or Principal’s control to, directly or indirectly, on behalf of the
Consultant, the Principal or any other person, (i) call upon, accept
competitive business from, or solicit the competitive business of any individual
or entity who is, or who had been at any time during the preceding two years,
a
customer of the Company or any successor to the business of the Company, or
otherwise divert or attempt to divert any business from the Company or any
such
successor, or (ii) directly or indirectly recruit or otherwise solicit or
induce any person who is an employee of, or otherwise engaged by, the Company
or
any successor to the business of the Company to terminate such person's
employment or other relationship with the Company or such successor, or hire
or
enter into any business with any person who is employed by, or who has left
the
employ of, the Company or any such successor during the preceding two years.
The
Consultant and Principal each agrees that it/he shall not at any time, directly
or indirectly, use or purport to authorize any person to use any name, ▇▇▇▇,
logo, trade dress or other identifying words or images which are the same as
or
similar to those used at any time by the Company in connection with any product
or service, whether or not such use would be in a business competitive with
that
of the Company. Any breach or violation by the Consultant or Principal of the
provisions of this Section 5 shall toll the running of any time periods set
forth in this Section 5 for the duration of any such breach or violation.
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(f) Non-Disparagement. The
Consultant and Principal each shall not at any time, directly or indirectly,
take any action (whether orally or in writing or otherwise) which has or may
be
expected to have the effect of disparaging the Company or any of its
subsidiaries or affiliates or their directors, officers or executives or their
respective reputations, including, but not limited to, their business models,
practices, relationships, internal workings, financial condition or operations,
in any manner whatsoever at any time.
6. Remedies.
The
restrictions set forth in Section 5 are considered by the parties to be fair
and
reasonable. The Consultant acknowledges that the restrictions contained in
Section 5 will not prevent them from earning a livelihood. The Consultant and
Principal each further acknowledges that the Company would be irreparably harmed
and that monetary damages would not provide an adequate remedy in the event
of a
breach of the provisions of Section 5. Accordingly, the Consultant and Principal
each agrees that, in addition to any other remedies available to the Company,
the Company shall be entitled to injunctive and other equitable relief to secure
the enforcement of these provisions, and shall be entitled to receive
reimbursement from the Consultant and the Principal for all reasonable
attorneys' fees and expenses incurred by the Company in enforcing these
provisions. In connection with seeking any such equitable remedy, including,
but
not limited to, an injunction or specific performance, the Company shall not
be
required to post a bond as a condition to obtaining such remedy. If any
provisions of Sections 5 or 6 relating to the time period, scope of activities
or geographic area of restrictions is declared by a court of competent
jurisdiction to exceed the maximum permissible time period, scope of activities
or geographic area, the maximum time period, scope of activities or geographic
area, as the case may be, shall be reduced to the maximum which such court
deems
enforceable. If any provisions of Sections 5 or 6 other than those described
in
the preceding sentence are adjudicated to be invalid or unenforceable, the
invalid or unenforceable provisions shall be deemed amended (with respect only
to the jurisdiction in which such adjudication is made) in such manner as to
render them enforceable and to effectuate as nearly as possible the original
intentions and agreement of the parties. For purposes of this Section 6, all
references to the Company shall be deemed to include the Company's affiliates
and subsidiaries, whether now existing or hereafter established or
acquired.
7. Termination;
Non-renewal.
This
Agreement may be terminated prior to the expiration of the Term set forth in
Section 1 upon the occurrence of any of the events set forth in, and subject
to
the terms of, this Section 7.
(a) Death
or Permanent Disability.
If
the
Consultant dies or becomes permanently disabled, this Agreement shall terminate
effective at the end of the calendar month during which the Consultant's death
occurs or when the Consultant's disability is deemed to have become permanent.
If the Consultant is unable to perform the Consultant's normal duties for the
Company because of illness or incapacity (whether physical or mental) for 45
consecutive days during the Term of this Agreement, or for 60 days (whether
or
not consecutive) out of any calendar year during the Term of this Agreement,
the
Consultant's disability shall be deemed to have become permanent. If this
Agreement is terminated on account of the death or permanent disability of
the
Consultant, then the Consultant or the Consultant's estate shall be entitled
to
receive accrued Base Consulting Fee through the date of such termination and
the
Consultant and the Consultant’s estate shall have no further entitlement to Base
Consulting Fee, bonus, or benefits from the Company following the effective
date
of such termination.
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(b) Cause.
This
Agreement may be terminated at the Company’s option, immediately upon written
notice to the Consultant, upon: (i) the Consultant’s commission of a
misdemeanor or felony that, in the Company Board or Parent Board’s reasonable
judgment, adversely affects the Company’s or any of the Company’s affiliates’
reputation, business or interests, or the ability of the Consultant to perform
the Consultant's duties as an Consultant of the Company; (ii) the
Consultant’s act of fraud or dishonest act upon, or misappropriation of funds
of, the Company or any of the Company’s affiliates; (c) the Consultant’s
gross negligence, willful or intentional act or omission in the performance
of
the Consultant's duties under this Agreement as determined by the Company Board
or Parent Board; (d) the Consultant’s disregard of a lawful direction of
the Company Board or Parent Board or the executive officer to whom the
Consultant reports; (e) the Consultant’s appropriation for himself of a
Company corporate opportunity without the express prior written consent of
the
Company Board or Parent Board; (f) the Consultant’s material breach of any
of the Consultant's obligations under this Agreement (other than Section 5
of
this Agreement) that continues unremedied for 14 days following the Consultant’s
receipt of written notice from the Company Board or Parent Board thereof;
(g) the Consultant’s breach of any of the Consultant's obligations of any
of the provisions of Section 5 of this Agreement; or (h) the Consultant is
convicted of a felony. If this Agreement is terminated by the Company for cause,
then the Consultant shall be entitled to receive accrued Base Consulting Fee
through the date of such termination.
(c) Without
Cause.
This
Agreement may be terminated by the Company, at any time after the first
anniversary of the Commencement Date, without cause immediately upon giving
written notice to the Consultant of such termination In such event, the Company
shall continue to pay to the Consultant the Base Consulting Fee in accordance
with the terms hereof for a period of (i) twelve months commencing with the
effective date of any termination pursuant to this Section 7(c), or
(ii) such lesser period commencing with the effective date of any
termination pursuant to this Section 7(c) and ending on the third anniversary
of
the Commencement Date; provided,
however,
that
Consultant’s right to receive any such payment shall be subject to the
Consultant’s complying with the terms of this Agreement. Additionally, the
Company shall have the right, at its election if made on or before the time
of
termination, to continue to pay the Consultant the Base Consulting Fee for
an
additional period of up to six months, and if the Company so elects, the
Consultant and Principal shall be bound by the provisions of Sections 5(d)
and
5(e) of this Agreement for such additional period. Notwithstanding the
foregoing, no amount shall be payable to the Consultant pursuant to this
Paragraph 7(c) unless (y) such Consultant’s termination is a separation
from service (within the meaning of Section 409A of the Internal Revenue Code
and the regulations thereunder), and (z) the amount payable to the
Consultant pursuant to this Paragraph 7(c) shall not exceed two times the lesser
of (A) the sum of the Consultant’s compensation (as defined in Treasury
Regulation Section 1.415-1(d)(2)) for services provided to the Company as an
Consultant for the calendar year preceding the calendar year in which the
Consultant has a separation from service, or (B) the maximum amount that may
be
taken into account under a qualified plan pursuant to Section 401(a)(17) of
the
Internal Revenue Code for such year.
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(d) Non-renewal.
In the
event the Company declines to renew or extend the Term, the Company shall have
the right, at its election, to continue to pay the Consultant the Base
Consulting Fee for an additional period of up to one year after the expiration
of the Term, and if the Company so elects, the Consultant and Principal shall
be
bound by the provisions of Sections 5(d) and 5(e) of this Agreement for such
additional period, provided, however, Consultant’s right to receive any such
payment shall be subject to the Consultant and Principal complying with the
terms of this Agreement. Any such election shall be made in writing at least
90
days prior to the expiration of the Term and shall specify the length of such
additional period.
(e) By
Consultant.
The
Consultant may terminate the Agreement upon providing the Company with ninety
(90) days' prior written notice. If this Agreement is terminated by the
Consultant pursuant to this Section 7(e), then the Consultant shall be entitled
to receive the Consultant's accrued Base Consulting Fee through the effective
date of such termination, and neither the Principal nor the Consultant shall
have any further entitlement to the Base Consulting Fee or bonus or other
compensation or benefits from the Company following the effective date of such
termination.
(f) Severance
Payment.
The
period of time during which the Company continues to pay (or would continue
to
pay, but for any breach by the Consultant or Principal of this Agreement) the
Consultant following the termination or expiration of this Agreement pursuant
to
Sections 7(c) or 7(d) shall be referred to as the “Severance Period”, and the
amounts due thereunder shall be referred to as the “Severance Payment.” The
Severance Payment shall be payable in accordance with the terms hereof for
payment of the Base Consulting Fee.
8. Miscellaneous.
(a) Survival.
The
provisions of Sections 5, 6, 7, and 8 shall survive the termination of this
Agreement.
(b) Entire
Agreement.
This
Agreement sets forth the entire understanding of the parties and, except as
specifically set forth herein, merges and supersedes any prior or
contemporaneous agreements between the parties pertaining to the subject matter
hereof.
(c) Modification.
This
Agreement may not be modified or terminated orally, and no modification,
termination or attempted waiver of any of the provisions hereof shall be binding
unless in writing and signed by the party against whom the same is sought to
be
enforced.
(d) Waiver.
Failure
of a party to enforce one or more of the provisions of this Agreement or to
require at any time performance of any of the obligations hereof shall not
be
construed to be a waiver of such provisions by such party nor to in any way
affect the validity of this Agreement or such party’s right thereafter to
enforce any provision of this Agreement, nor to preclude such party from taking
any other action at any time which it would legally be entitled to
take.
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(e) Successors
and Assigns.
Neither
party shall have the right to assign this Agreement, or any rights or
obligations hereunder, without the consent of the other party; provided,
however,
that
upon the sale of all or substantially all of the assets, business and good-will
of the Company to another company, or upon the merger or consolidation of the
Company with another company, this Agreement shall inure to the benefit of,
and
be binding upon, both Consultant and the company purchasing such assets,
business and goodwill, or surviving such merger or consolidation, as the case
may be, in the same manner and to the same extent as though such other company
were the Company; and provided,
further,
that the
Company shall have the right to assign this Agreement to any affiliate or
subsidiary of the Company. Subject to the foregoing, this Agreement shall inure
to the benefit of, and be binding upon, the parties hereto and their legal
representatives, heirs, successors and assigns.
(f) Communications.
All
notices, requests, demands and other communications under this Agreement shall
be in writing and shall be deemed to have been given at the time personally
delivered or when mailed in any United States post office enclosed in a
registered or certified postage prepaid envelope and addressed to the addresses
set forth below, or to such other address as any party may specify by notice
to
the other party; provided,
however,
that any
notice of change of address shall be effective only upon receipt.
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If
to the Company:
▇▇▇▇▇▇,
Inc.
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
Attention:
Chief Executive Officer
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With
a copy to:
▇▇▇▇
▇▇▇▇▇▇▇, P.C.
▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
Attention:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
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|
If
to the Consultant or Principal, to:
Fifth
Element, Inc.
____________________________________
____________________________________
Facsimile:
Attn:
▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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With
a copy to:
▇▇▇▇▇▇
▇▇▇▇▇▇▇ & Leckerling P.C.
▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile:
802-864-3629
Attention:
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(g) Severability.
If any
provision of this Agreement is held to be invalid or unenforceable by a court
of
competent jurisdiction, such invalidity or unenforceability shall not affect
the
validity and enforceability of the other provisions of this Agreement and the
provisions held to be invalid or unenforceable shall be enforced as nearly
as
possible according to its original terms and intent to eliminate such invalidity
or unenforceability.
(h) Jurisdiction;
Venue.
This
Agreement shall be subject to the jurisdiction of the courts of New York County,
New York, and the courts of ▇▇▇▇▇▇▇▇▇▇ County, State of Vermont, and the parties
irrevocably and expressly agree to submit to the jurisdiction of such courts
for
actions or proceedings involving any breach of this Agreement other than claims
or causes of action that relate to or arise under the Purchase Agreement. Claims
hereunder involving any causes of action that relate to or arise under the
Purchase Agreement shall be brought exclusively in the courts of New York
County, New York, and the parties irrevocably and expressly agree to submit
to
the exclusive jurisdiction of the courts of New York County, New York for the
purpose of resolving disputes among them relating to this Agreement or the
transactions contemplated by this Agreement, and waive any objections on the
grounds of forum non
conveniens
or
otherwise. The parties hereto agree to service of process by certified or
registered United States mail, postage prepaid, addressed to the party in
question.
10
(i) Governing
Law; Officer Indemnification.
This
Agreement is made and executed and shall be governed by the laws of the State
of
New York, without regard to the conflicts of law principles thereof.
Notwithstanding the foregoing, the Principal shall have the right to any
indemnification to the extent provided for the Principal in the Company's
certificate of incorporation, bylaws, and the provisions of Delaware
law.
(j) Counterparts.
This
Agreement may be executed in any number of counterparts, but all counterparts
will together constitute but one agreement.
(k) Code
Section 409A.
The
parties to this Agreement intend that the Agreement be exempt from (or, if
not
so exempt, comply with) Section 409A of the U.S. Internal Revenue Code (the
"Code"), where applicable, and this Agreement shall be interpreted in a manner
consistent with that intention. To the extent required by Section 409A of
the Code, no payment or other distribution required to be made to the Consultant
hereunder (including any payment of cash, any transfer of property and any
provision of taxable benefits) as a result of the Consultant's termination
of
the Consultant's relationship with the Company shall be made earlier than the
date that is six (6) months and one day following the date on which the
Consultant separates from service with the Company and its affiliates (within
the meaning of Section 409A of the Code).
(l) Independent
Contractor; Indemnification for Payroll Taxes.
The
Consultant’s relationship with the Company is that of an independent contractor,
and the activities of the Consultant and Principal hereunder shall not
constitute the Consultant an employee, agent, partner or joint venturer of
or
with the Company, and at all times the relationship of the Consultant to the
Company shall be that of an independent contractor. The Consultant also
acknowledges and agrees that the Company shall treat the Consultant as an
independent contractor for taxation purposes and that the Consultant shall
be
solely responsible for the payment of any and all taxes relating to the
Consultant's compensation hereunder. Neither the Consultant nor the Principal
shall be entitled to any employee benefits from the Company or any affiliate
of
the Company. Neither the Consultant nor the Principal will have any authority
to, make any representation, contract, or commitment on behalf of the Company
or
otherwise bind the Company in any respect except as the Company Board, the
Chief
Executive Officer, or the bylaws of the Company provide with respect to the
Principal's acts and duties as an officer of the Company. The Consultant and
Principal each will comply with, and each hereby accepts, exclusive liability
for noncompliance with, all applicable state and federal laws, rules, and
regulations, including, but not limited to, the payment of all taxes, social
security, disability, and other contributions based upon fees paid to the
Consultant pursuant to this Agreement. The Consultant hereby indemnifies and
holds harmless the Company against any and all such liability, taxes, or
contributions, including, but not limited to, penalties and
interest.
11
(m) Conversion
to Employment Agreement.
The
Company may convert this Agreement to an employment agreement between the
Principal and the Company if the Company determines that it is in the best
interests of the Company to treat the Agreement as an employment agreement
rather than a consulting agreement. In the event of such conversion,
(i) the obligations of the Consultant under Section 5 and the provisions of
Section 6 as they apply to the Consultant shall survive such conversion and
remain in full force and effect against the Consultant, and (ii) all the
obligations of the Principal hereunder shall survive the conversion and be
merged into the employment agreement, and (iii) payments made to the
Consultant shall be credited against payments owed to the Principal as an
employee of the Company.
This
Agreement is for the sole and exclusive benefit of the parties hereto and shall
not be deemed for the benefit of any other person or entity.
[Signature
Page Follows:]
12
In
Witness Whereof,
each of
the parties hereto has duly executed this Consulting Agreement as of the date
set forth above.
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Twincraft,
Inc.,
a
Vermont corporation
By:
/s/
W. ▇▇▇▇ ▇▇▇▇▇▇▇
Name:
W. ▇▇▇▇ ▇▇▇▇▇▇▇
Title:
Executive Chairman
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Fifth
Element, Inc.
By: /s/
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇▇,
Title:
President
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|
/s/
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇▇,
individually
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