Exhibit 10.1
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (the "Agreement"), dated as of November 1,
2004, by and between ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, an individual residing at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (the "Consultant") and Scan-Optics, Inc., with
its principal place of business at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ (the "Company").
WHEREAS, the Consultant is an independent contractor who provides
consulting services; and
WHEREAS, the Company wishes to obtain such services for its benefit.
NOW THEREFORE, in consideration of the mutual covenants set forth
herein, the parties hereto, for good and valuable consideration, the sufficiency
and receipt of which are hereby acknowledged, agree as follows:
1. Services. The Company hereby engages the Consultant to provide to
the Company consulting, advisory and related services to and for the Company as
may be reasonably requested from time to time by the Chief Executive Officer or
Board of Directors (the "Services"). The Consultant shall devote such time to
the performance of such services as may be required to fulfill his obligations
under this Agreement, but, in no event shall the Consultant devote to the
performance of such services less than six (6) hours during any month, excluding
time spent, as a director, in connection with preparing for and attending Board
and committee meetings. Consultant shall provide the Services at times and
places mutually agreed upon by the Company and Consultant.
2. Fees and Expenses.
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(a) Consulting Fees. The Company shall pay to the Consultant consulting
fees of $1,666.67 per month (the "Monthly Consulting Fee"), payable in arrears
on the last day of each month. Payment for any partial month shall be prorated.
(b) Reimbursement of Expenses. The Company shall reimburse the
Consultant for all reasonable and necessary expenses incurred or paid by the
Consultant in connection with, or related to, the performance of his services
under this Agreement. The Consultant shall submit to the Company itemized
monthly statements, in a form satisfactory to the Company, of such expenses
incurred in the previous month. The Company shall pay to the Consultant amounts
shown on each such statement within thirty (30) days after receipt thereof.
(c) All Fees and Expenses shall be paid to the Consultant net of
applicable withholding, sales or similar taxes.
3. Term.
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(a) Subject to paragraph 3(b), the term of this Agreement shall
commence on November 1, 2004 and shall continue until terminated in accordance
with this Agreement.
(b) Either party may terminate this Agreement, for any reason or no
reason, upon thirty (30) business day's prior notice (the "Termination Date") to
the other party.
Upon the termination of this Agreement pursuant to this Section 3(b),
the Company shall reimburse the Consultant for all out-of-pocket expenses
incurred by the Consultant in the performances of Services which have not been
previously reimbursed by the Company. The Monthly Fee shall be deemed fully
earned when paid.
4. Nature of Relationship. The Consultant will act under this Agreement
as independent contractors with duties solely to the Company. Nothing in this
Agreement shall be deemed to create a fiduciary, agency, employment or joint
venture relationship between the Consultant, on one hand, and the Company, on
the other hand. Nothing in this Agreement shall be deemed to confer on any
person or entity other than the Consultant and the Company or their respective
successors and assigns any relationship, rights or remedies under or by reason
of this Agreement or of the Services to be rendered by the Consultant.
5. Use of Materials. The Company acknowledges that all advice (whether
written or oral) given by the Consultant to the Company in connection with the
Services or otherwise under this Agreement is intended solely for the benefit
and use of the Company (limited to its management and its Board). The Company
agrees that, except as required by law, no such advice shall be used for any
other purpose or reproduced, disseminated, quoted or referred to at any time in
any manner, nor shall any public references to the Consultant be made by the
Company, without the Consultant's prior written consent.
6. Confidentiality. For purposes of this Agreement, "Confidential
Information" shall mean any and all information disclosed by the Company to the
Consultant relating to its business or technology that Company designates as
being "non-public" or "confidential" or which, under the circumstances
surrounding disclosure, the Consultant reasonably should recognize should be
treated as confidential. Confidential Information includes, for example and
without limitation, Company's confidential business or technical information,
such as financial information or data, marketing techniques and material,
business plans and strategies, business operation and systems, pricing policies,
information concerning employees, customers, and/or vendors, trade secrets,
discoveries, inventions, improvements, research, development, know-how, designs,
products, compositions, prototypes, or physical materials and manufacturing
processes. The Consultant may use the Confidential Information only to provide
the Services, and shall hold any Confidential Information confidential in
accordance with its customary policies relating to any non-public or proprietary
information at least as broad in scope as the Consultant's obligations
hereunder. The Consultant may only disseminate Confidential Information to those
employees, members, attorneys, consultants or associates of the Consultant who
have: (i) a demonstrable need to know; (ii) been informed of the Consultant's
obligations hereunder; and (iii) are bound by an obligation of confidentiality
to the Consultant. A breach of such agreement shall be considered a material
breach hereunder. Except as expressly provided in the preceding two sentences,
the Consultant shall not: (i) publish, disseminate or otherwise disclose or make
available Confidential Information received hereunder to any person, Consultant
or corporation without prior written consent of the Company; or (ii) use
Confidential Information for any purpose including, without limitation, selling,
leasing, renting, licensing, marketing or otherwise distributing any
Confidential Information or products or services embodying or derived from same.
The Consultant agrees to use the same degree of care that it uses to protect its
confidential information of similar importance, to prevent any unauthorized
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disclosure of Confidential Information, but in no event less than a reasonable
degree of care. The Consultant shall not publicize or disclose beyond those
persons to whom Confidential Information may be disclosed hereunder the
existence and the terms of this Agreement or the discussions that arise in
connection with this Agreement and all such information shall be deemed
Confidential Information for all purposes hereof. The Consultant shall have no
obligation under this Agreement to maintain in confidence any information: (i)
is in the public domain at the time of disclosure; (ii) though originally
Confidential Information, subsequently becomes part of the public knowledge
through no fault of the Consultant, as of the date of its becoming part of the
public knowledge; (iii) though originally Confidential Information, subsequently
is rightfully received by the Consultant without obligations of confidence from
a third party who is free to disclose the information, as of the date of such
third-party disclosure; or (iv) is independently developed by the Consultant
without the use of any Confidential Information, as of the date of such
independent development. The Consultant shall be entitled to disclose
Confidential Information in response to a court order or as otherwise required
by law; provided however, that the Consultant notifies the Company prior to such
disclosure, in order to give the Company reasonable time to contest such order.
Without limiting the foregoing, the Consultant shall not (i) contact, on behalf
of the Company, any third party or (ii) disclose to any third party that it has
been engaged by the Company pursuant to this Agreement or otherwise, without the
prior consent of the Company.
7. Communications. The Company acknowledges that various communications
systems and networks do not necessarily represent a secure environment in which
to conduct communications. These systems include certain telephone systems,
computer networks and the Internet. Nevertheless, the Company authorizes the
Consultant (including the Consultants) to use such systems (including sending
and receiving electronic mail) for communication of sensitive information about
the Company.
8. Indemnification. The Company shall defend, indemnify and hold
harmless the Consultant, its members, managers, employees, the Consultants, and
their respective heirs, successors, assigns and affiliates (each an "Indemnified
Party") from and against any and all losses, deficiencies, claims, actions,
liabilities, damages, assessments, judgments, costs and expenses, including
reasonable attorneys' fees and expenses, both those incurred in connection with
the defense or prosecution of the indemnifiable claim and those incurred in
connection with the enforcement of this provision (collectively, the "Damages"),
caused by, based upon, resulting from or arising out of this Agreement and/or
the provision of the Services to the Company by the Consultant or the
Consultants, except if and to the extent Damages result directly from the
Indemnified Party's gross negligence or willful misconduct or material breach of
this Agreement.
9. Survival. The provisions of Sections 2, 4, 5, 6, 7, 9, 10 and this
Section 9 shall survive the termination of this Agreement.
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10. Governing Law; Jurisdiction.
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(a) This Agreement shall be governed by and construed in accordance
with the laws of the State of Connecticut with respect to contracts made and to
be performed entirely therein and without regard to choice of law principles
thereof. Any controversy arising out of or relating to this Agreement shall be
settled by arbitration before an arbitrator in Hartford, Connecticut, in
accordance with the then-effective American Arbitration Association's rules for
resolution of commercial disputes as modified by the provisions of this
Agreement.
(b) If a dispute arises with respect to this Agreement, the parties
shall in good faith attempt to resolve such dispute. A demand for arbitration
may be filed only if the parties in good faith fail to agree on a mutually
satisfactory resolution of the dispute after 30 days. The parties shall attempt
for two weeks to agree on a single arbitrator. If they are unable to agree, the
parties shall request that the American Arbitration Association in Hartford,
Connecticut choose an arbitrator for them. The decision of the arbitrator shall
be final, binding and non-appealable.
(c) The parties (A) consent to the exclusive jurisdiction of the state
and federal courts located in the Hartford, Connecticut for all purposes in
connection with arbitration, including the entry of judgment on any award; (B)
waive any objection to laying venue in any such court; (C) waive any objection
that any such court is an inconvenient forum or does not have jurisdiction over
any party; and (D) consent that any process, notice of motion or other
application to such courts, and any papers in connection with arbitration, may
be served by registered or certified mail, return receipt requested, by personal
service, or in such other manner as may be permissible under the rules of the
applicable court or arbitration tribunal, provided a reasonable time for
appearance is allowed.
(d) The arbitrator shall have no power to alter or modify any express
provision of this Agreement or to render an award, which has the effect of
altering or modifying any express provision of this Agreement. The arbitrator
shall be prohibited from issuing any award providing for multiple or punitive
damages. The parties shall pay their own costs and attorneys' fees associated
with the arbitration.
(e) Nothing in this Agreement shall preclude either party from seeking
injunctive or other equitable relief (without the necessity of posting a bond)
from any state or federal court of competent jurisdiction located in Hartford,
Connecticut in order to avoid irreparable harm pending arbitration and/or to
avoid rendering any arbitration award on the merits from becoming ineffectual or
unenforceable.
11. Miscellaneous.
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(a) If any one or more of the provisions of this Agreement shall for
any reason be held to be invalid, illegal or unenforceable, the remaining
provisions of this Agreement shall be unimpaired and the invalid, illegal or
unenforceable provision shall be replaced by a mutually acceptable provision,
which, being valid, legal and enforceable, comes closest to the intention of the
parties underlying the invalid, illegal or unenforceable provision.
(b) This Agreement contains the entire understanding of the parties
relating to the subject matter of this Agreement and supersedes all prior
agreements and understandings with respect to such subject matter, whether oral
or written. No modification to any provision of this Agreement shall be binding
unless in writing and signed by both the Company and the Consultant. No waiver
of any rights under this Agreement will be effective unless in writing,
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signed by the party against whom enforcement of such waiver is sought. The
waiver of a default shall not constitute a waiver of any other default, and the
failure of either party to enforce any right or remedy for any one default shall
not be deemed a waiver of such right or remedy if the offending party persists
in such default or commits another default, nor shall such failure in any way
affect the validity of the Agreement or any provision of this Agreement.
(c) All notices under this Agreement shall be sufficient if delivered
by registered or certified mail, overnight mail or personal service. Any notice
shall be deemed to be given only upon actual receipt or refusal of receipt to
the address of the Company or the Consultant, as the case may be, set forth
above or such other address as such party shall have specified in writing to the
other party in accordance with this Section 11(c).
(d) This Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original as against any party whose signature
appears on such counterpart, but all of which together shall constitute but one
and the same instrument.
(e) This Agreement, and any right or obligation under this Agreement,
may not be assigned, transferred or delegated by either party without the
express prior written consent of the other party. Subject to the foregoing, this
Agreement and the obligations hereunder shall be binding on the representatives,
assigns, and successors of the party in question and shall inure to the benefit
of the assigns and successors of such party.
IN WITNESS HEREOF, the undersigned have hereunto set their hands,
intending thereby to be legally bound as of the date set forth above.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
SCAN-OPTICS, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇.
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇.
Title: Acting Chief Executive Officer
and President
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