CONSULTING AGREEMENT
EXHIBIT
10.1
THIS
CONSULTING AGREEMENT (“Agreement”) is entered into as of April 1, 2007
(“Effective Date”), by and between Xxxxxxx Xxxxxx, an individual having an
address at Xxxxx Xxxxxxxx 00, Xxxxxxxxxx, Xxxxxxxxxx, 00000 Xxxxx, Xxxxxxx
(“Xxxxxx”), and Composite Technology Corporation, a Nevada corporation, having a
principal place of business at 0000 XxXxx Xxxxxx, Xxxxxx, Xxxxxxxxxx 00000
(the
“Company”).
Recitals
A. WHEREAS,
the Company is in the business of (a) developing technology for wind power
and
wind turbine applications and for electrical conductor applications, and
(b) manufacturing, marketing and selling wind turbines and related items
and composite reinforced materials for electrical conductor applications (the
“Business”);
B. WHEREAS,
prior to the Effective Date of this Agreement, Xxxxxx has served the Company
and
many of its Affiliates in one or more capacities of employee, director,
president and significant shareholder, and whereas Xxxxxx and the Company are
parties to an Executive Employment Agreement under date of July 3, 2006
(“Employment Agreement”);
C. WHEREAS,
Xxxxxx wishes to resign from all of his positions held with Company and its
Affiliates prior to the Effective Date of this Agreement; and whereas Xxxxxx
and
Company wish to terminate the Employment Agreement; and whereas, Company desires
to retain Xxxxxx, and Xxxxxx is desirous of serving Company, to render
consulting services on the terms and conditions set forth herein;
Agreement
Now,
therefore, in consideration of the mutual premises and covenants set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Resignation
and Termination.
Xxxxxx
and Company hereby terminate the Employment Agreement. Xxxxxx hereby resigns
from all positions he held with Company and any and all of its direct and
indirect subsidiaries and affiliates immediately prior to the Effective Date
of
this Agreement, including without limitation all employee, director and officer
positions, and Company hereby accepts such resignations. Xxxxxx agrees to
cooperate with Company and its subsidiaries and affiliates with regard to any
formal actions to be taken to acknowledge these actions. The actions taken
by
virtue of this Section 1 are irrevocable, and shall survive the Term and any
termination of this Agreement by either Party for any reason.
2. Consultancy
and Term.
On the
terms and subject to the conditions set forth herein, the Company agrees to
retain Xxxxxx, and Xxxxxx agrees to serve as a Consultant to Company, for a
term
commencing on the date hereof and ending on March 31, 2008 (“Term”). This term
may be extended upon mutual agreement of the parties. The Company and Xxxxxx
desire to enter into an independent contractor relationship as set forth in
this
Agreement. It is the intent and purpose of this Agreement that Xxxxxx shall
at
all times be an independent contractor of the Company and nothing contained
herein shall be construed to create or establish the relationship of employer
and employee, joint venturer, or partner between the Company and Xxxxxx. Both
parties acknowledge that Xxxxxx is not an employee of Company for state or
federal tax purposes.
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EXHIBIT
10.1
3. Xxxxxx’x
Representations and Warrantees.
Xxxxxx
acknowledges and agrees that as an independent, separate business, Xxxxxx is
responsible for whatever profit or loss Xxxxxx may incur through performance
of
this Agreement. Xxxxxx represents that he has the qualifications and ability
to
perform the Services in a professional manner, without the advice, control,
or
supervision of Company. Xxxxxx shall be solely responsible for the professional
performance of the services as set forth in Sections 4 and 5 below. Xxxxxx
further acknowledges and agrees that he shall have no authority to bind the
Company contractually or otherwise in any manner. In executing this Agreement,
Xxxxxx specifically acknowledges that he has consulted or had a reasonable
opportunity to consult with counsel of his own choice and that he has executed
this Agreement after independent investigation and without fraud, duress,
coercion or undue influence.
4. Services.
Xxxxxx
shall provide management and business advisory services to the Company in
accordance with his capabilities and at the request and the discretion of the
Company’s CEO (the “Services”). Xxxxxx will report directly to the CEO, and will
work with such other employees of Company and its subsidiaries, affiliates,
suppliers, customers, prospective customers, consultants and the like as
requested by the CEO.
5. Scope.
The
Company acknowledges that the time required for Xxxxxx to perform the Services
will depend upon the level of activity requested by the CEO. Xxxxxx shall devote
such time and effort to the performance of these services as is reasonably
necessary to fulfill his obligations hereunder. Any work or task of Xxxxxx
provided for herein which requires the Company to provide information or
assistance to Xxxxxx shall be excused (without effect upon any obligation of
the
Company) until such time as the Company has fully provided all information
and
assistance necessary for Xxxxxx to complete the work or task. Xxxxxx cannot
guarantee results on behalf of the Company, but shall use commercially
reasonable efforts in providing the Services.
6.
Xxxxxx’x
Compensation.
(a) Annual
Compensation.
Xxxxxx
shall be compensated in an amount of $400,000 per year, payable monthly in
arrears.
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(b) During
the Term, Xxxxxx and Xxxxxx’x spouse shall be eligible to participate in and
shall be covered by the Company medical plan, as such plan may change from
time
to time. Notwithstanding the foregoing, if the medical insurance benefits cannot
be arranged for Xxxxxx and his spouse by the Company, then the Company agrees
to
reimburse Xxxxxx up to $1,000 per month for comparable medical
insurance.
7. Expenses.
The
Company shall reimburse Xxxxxx for all direct out-of-pocket costs reasonably
incurred by Xxxxxx in the performance of Services; provided, however, that
any
expense in excess of $1,000 for any item must be approved in advance by the
Company and that all expenses shall be reasonable and in compliance with Company
policies. The Company shall reimburse expenses promptly upon receipt of a
statement therefore from Xxxxxx accompanied by sufficient supporting
documentation.
8. Cooperation
by Company.
The
Company shall provide for Xxxxxx access to the Company’s premises and shall make
available to Xxxxxx all information and personnel reasonably requested by Xxxxxx
in connection with the performance the services. In addition, the Company shall
ensure that its employees and other independent consultants co-operate fully
with Xxxxxx in relation to the provision of services and shall keep Xxxxxx
informed on a reasonably current basis of developments in the Company’s
technology and business so that Xxxxxx shall have a reasonable basis upon which
to advise the Company as contemplated hereby.
9. Confidentiality
and Intellectual Property Assignment.
Xxxxxx
agrees that he shall continue to be bound by the terms set forth in Company’s
Employee Confidential Information and Invention Assignment Agreement which
are
incorporated herein by reference, and Xxxxxx agrees to formally execute such
Agreement upon presentation by Company.
10. Standard
of Care.
Xxxxxx
shall perform all Services in a commercially reasonable manner and to the best
of his ability. However, Xxxxxx shall have no liability to the Company for
any
loss, liability, cost or expense suffered or incurred by the Company as a result
of any act or omission by Xxxxxx except such as arise from the gross negligence
or willful misconduct of Xxxxxx.
11. Indemnification.
Each
party hereto shall indemnify and hold harmless the other party, its affiliates,
and each of their respective members, officers, directors, agents, employees
and
controlling persons (each of the foregoing, an “Indemnified Person”) from and
against any and all losses, claims, damages, expenses, actions, proceedings,
arbitrations or investigations whether formal or informal, or threats thereof
(all of the foregoing, “Liabilities”), based upon, relating to or arising out of
the other party’s activities hereunder or any breach of its representations and
warranties; provided, however, that neither party shall be liable under this
paragraph to the extent that the Liabilities for which indemnification is sought
resulted from the wilful misconduct or gross negligence of the Indemnified
Person seeking indemnification.
12. Termination.
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(a) Breach.
If
either party fails to perform its obligations hereunder in any material respect,
and if such failure is not cured within 30 days after written notice of breach
from the other party, the other party may terminate this Agreement by written
notice of termination to the breaching party. If Xxxxxx is the breaching party,
Company shall have no further obligations to Xxxxxx as of the effective date
of
termination. All
other
rights Xxxxxx has under any benefit or stock option plans and programs shall
be
determined in accordance with the terms and conditions of such plans and
programs.
(b) Death.
This
Agreement shall terminate upon the death of Xxxxxx and the obligations of Xxxxxx
and Company under this Agreement shall immediately cease except as hereafter
set
forth. In the event of a termination under this section, Xxxxxx shall be
entitled to receive any amounts accrued but unpaid pursuant to Section 6 of
this
Agreement. All other rights Xxxxxx has under any benefit or stock option plans
and programs shall be determined in accordance with the terms and conditions
of
such plans and programs.
(c) Disability.
Company
reserves the right to terminate this Agreement upon 10 days written notice
if,
for a consecutive period of 30 days, Xxxxxx is prevented from discharging his
duties under this Agreement due to any physical or mental disability. Upon
such
termination the obligations of Xxxxxx and Company under this Agreement shall
immediately cease. In the event of a termination pursuant to this section except
as hereafter set forth, Xxxxxx shall be entitled to receive any accrued and
unpaid amounts earned pursuant to section 6. All other rights Executive has
under any benefit or stock option plans and programs shall be determined in
accordance with the terms and conditions of such plans and
programs.
13. Securities
Law Compliance.
Xxxxxx
acknowledges and agrees that, with respect to any shares previously issued
to
him in connection with the Employment Agreement or in his capacity as an
executive officer of the Company of its Affiliates (the “Shares”), his ability
to sell, convey, transfer or otherwise dispose of the Shares shall be restricted
by the Company’s governing policies and the rules and regulations promulgated by
the Securities and Exchange Commission applicable to executive officers and
insiders of reporting companies and the Company’s xxxxxxx xxxxxxx policies
applicable to executive officers and/or directors. In the event Xxxxxx seeks
to
sell the Shares in a private block sale, Xxxxxx must obtain the Company’s
written consent prior to consummating any such sale. Any unauthorized sale,
transfer, conveyance or other disposition of the Shares would constitute a
breach of the Agreement and permit immediate termination of the Company’s
obligations under the Agreement pursuant to Section 12(a) above. Xxxxxx also
agrees to comply with all reporting obligations under the Securities Exchange
Act of 1934, including without limitation, filing Form 4 under Section 16 of
the
Exchange Act whenever making acquisitions or dispositions of the
Shares.
14. Nature
of Agreement.
This
Agreement constitutes the entire contract between the Parties and it supersedes
all prior and contemporaneous agreements, arrangements, negotiations and
understandings between the Parties relating to the subject matter hereof,
including, but not limited to the Employment Agreement, but excluding Xxxxxx’x
obligations pursuant to the Company’s
Employee Confidential Information and Invention Assignment Agreement
as set
forth in Section 9. By entering into this Agreement, Porters acknowledges and
agrees that he is releasing any claims, causes of action or rights to any
recovery related to or arising out of the Employment Agreement. There are no
other understandings, statements, promises or inducements among the parties,
oral or otherwise, contrary to the terms of this Agreement. No representations,
warranties, covenants or conditions, express or implied, whether by statute
or
otherwise, other than as set forth herein, have been made by any party hereto
regarding the subject matter hereof.
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15. Notices.
All
notices given under this Agreement shall be in writing. Any notice may be
transmitted by any means selected by the sender. A notice that is mailed to
a
party at its address given below, registered or certified mail, return receipt
requested, with all postage prepaid, will be deemed to have been given and
received on the earlier of the date reflected on the return receipt or the
third
business day after it is posted. Any notice sent by facsimile transmission
to a
party at its facsimile number given below shall be deemed to have been given
and
received upon confirmation of transmission by the sender’s facsimile machine.
Any notice transmitted by recognized overnight courier service to a party at
its
address given below shall be deemed given and received on the first business
day
after it is delivered to the courier. Any notice given by any other means shall
be deemed given and received only upon actual receipt. The addresses and
facsimile numbers of the parties for notice purposes are as follows:
If
to
Xxxxxx:
Xxxxxxx
Xxxxxx
Calle
Escorial 00
Xxxxxxxxxx
Xxxxxxxxxx
00000
Xxxxx
Xxxxxxx
Phone:
x00 000 000000
Fax:
x00
000 000000
If
to the
Company:
Xxxxxx
X.
Xxxxxxxx, CEO
Composite
Technology Corporation
0000
XxXxx Xxxxxx
Xxxxxx,
XX 00000
Facsimile
No.: (000) 000-0000
Any
party
may change its address or facsimile number for notice purposes, or add
additional persons to whom copies of any notice should be sent, by written
notice to the other party.
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16. Miscellaneous.
This
Agreement shall be governed in all respects by the laws of the State of
California. This Agreement contains the entire understanding of the parties
with
respect to the subject matter hereof and neither party has relied upon any
representation, warranty or promise not contained herein. No failure by either
party to insist upon the strict performance of any term or provision of this
Agreement shall constitute a waiver thereof on that or any subsequent occasion.
This Agreement may be amended, and any term or provision hereof may be waived,
only in a writing signed by the party charged with such amendment or waiver.
In
the event of any litigation between the parties with respect to this Agreement
or the performance of either party hereunder, the prevailing party shall be
entitled to recover, in addition to any other relief awarded by the court,
its
reasonable attorneys’ fees and other costs of preparing for and participating in
the litigation.
IN
WITNESS WHEREOF, the Company and Xxxxxx have executed this Agreement as of
the
day and year first above written.
| /s/ Xxxxxxx Xxxxxx | ||||
|
Xxxxxxx Xxxxxx |
||||
| Composite Technology Corporation | ||||
| By: | /s/ Xxxxxx X Xxxxxxxx | |||
|
Xxxxxx
X Xxxxxxxx, CEO
|
||||
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