CONSULTING AGREEMENT
Exhibit 10.1
This Consulting Agreement (the “Agreement”) is made and entered into as of November 8, 2006, but
effective as of October 20, 2006, by and between Terremark Management Services, Inc., a Florida
corporation and a wholly owned subsidiary of Terremark Worldwide (the “Company”), and Xxxxxxxxx
Xxxxx (the “Consultant”).
R E C I T A L S
WHEREAS, the Company operates Internet Exchange Point facilities at strategic locations in
various venues and assists users of the Internet and communications networks in communicating with
other users and networks;
WHEREAS, the Company desires to utilize the services of the Consultant, and the Consultant
desires to provide such consulting services, on a non-exclusive basis, to the Company, to assist
the Company in strategic advice and business development services and other matters that may be
required by the Company from time to time, subject to the terms and conditions set forth herein;
WHEREAS, the Consultant has all necessary licenses or approvals from appropriate regulatory
authorities to perform the services contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises and mutual covenants and agreements contained
herein, and for other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:
AGREEMENT
1. Recitals True and Correct; Consulting Services; Representations and Warranties.
1.1 Recitals. The parties agree that the recitals set forth above are true and
correct, and are incorporated as terms to this Agreement.
1.2 Consulting Services. During the Term (as defined below), the Consultant shall provide
consulting services to the Company as directed by the Company’s Chief Executive Officer. The
Consultant shall devote as much time to the Company as is reasonably necessary to fulfill the
duties and obligations hereunder. During the Term, Xxxxxxxxx Xxxxx shall perform the duties of the
Consultant contemplated hereby, and shall not delegate such duties to any third party without the
express prior written approval of Company’s CEO or other Company representative as designated by
the Company in writing. The Consultant shall perform its duties to the best of its ability, and
perform the services in a professional manner consistent with industry standards. The Consultant
may provide consulting services to other entities, provided that the Company shall have first
priority on the Consultant’s time and services. The Consultant shall be available for a monthly
conference call with the CEO, or other Company representative as designated by the Company in
writing, to report on the status of the activities of the Consultant, and will be available if
requested by the Company to meet with Company representatives in person at the Company’s offices in
Miami, Florida, so long as Consultant has been provided with five business days notice of such
meeting.
1.3 Representations and Warranties. The Consultant represents and warrants to the
Company that (a) the Consultant is not party to or bound by any employment, non-compete,
non-solicitation, nondisclosure, non-competition, confidentiality or similar agreement with any
other person that could adversely affect its ability to carry out the duties contemplated under
this Agreement; (b) all aspects of the Consultant’s work product and any Developments (as
hereinafter defined) provided by the
Consultant shall be free of any libelous material or any material which constitutes an
invasion of any right of privacy or publicity and shall not infringe upon any trademark, copyright,
trade secret or other intellectual property right; (c) no use of Company provided materials shall
be made other than as explicitly authorized by the Company; (d) the Consultant has invention/work
product assignment, confidentiality and any other necessary agreements with all individuals who
will be involved in performing services hereunder to perform its obligations hereunder and protect
the Company’s Confidential Information (as hereinafter defined) and proprietary rights in and to
the Consultant’s work product and Developments as required hereunder; and (e) this Agreement, when
executed and delivered, shall constitute the valid and legally binding obligation of the
Consultant, and the Company, enforceable against the Consultant in accordance with its terms.
2. Term. The Term under this Agreement (the “Term”) shall commence on the date of
execution hereof (the “Commencement Date”) and shall terminate upon the earlier of (a) one year
from the Commencement Date (the “Expiration Date”), or (b) the date on which the Agreement is
terminated prior to the Expiration Date pursuant to and in accordance with Section 5 hereof (the
“Termination Date”). Notwithstanding the foregoing, the contract will automatically renew at the
end of each year unless the Term may be renewed on an annual basis at the Company send the
Consultant one hundred and eighty (180) days written notice to Consultant at the end of the then
current term.
3. Compensation.
3.1 Compensation. In consideration for the consulting services to be provided to the
Company by the Consultant, while this Agreement is in effect, the Consultant shall be paid a
monthly consultant fee of twenty thousand dollars ($20,000) on the first business day of each month
(the “Fee”). Company acknowledges the Fee for October and November 2006 is due as of the execution
hereof. The Consultant shall be solely responsible for payment of all taxes or other charges
imposed on its compensation hereunder. In the event that this Agreement is terminated or expires
before the end of a particular month, monthly compensation shall be prorated for such end period.
3.2 Office Use and Support Staff. The Company will provide Consultant with an office
and support staff similar in all material respects to the office and support enjoyed currently by
Consultant. Such support shall include, but not be limited to use of Company owned laptop and
desktop computers, mobile phones and PDA’s, as well as office space and administrative staff as
necessary.
3.3 Travel/Evacuation Assistance. The Company shall make all reasonable efforts to
assist Consultant in the event of an emergency affecting Consultant’s health or well being while
traveling on Company business including but not limited to emergency evacuation back to the United
States.
The foregoing constitutes the all compensation to be paid to the Consultant hereunder, and
the Consultant acknowledges and agrees that the Consultant is and shall not be an employee of
Company, shall not be entitled to any insurance, or vacation, provided by the Company to its
employees. Notwithstanding the foregoing the company, at its option, may grant the Consultant
additional compensation for outstanding performance.
4. Independent Contractor Status; Expense Reimbursement.
4.1 Independent Contractor Status; No Agency. The Consultant is an independent
contractor. Nothing herein shall be deemed to create any form of partnership, principal-agent
relationship, employer-employee relationship, or joint venture between the Company and the
Consultant. It is
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expressly understood by the parties that the Consultant shall not have the authority to bind
the Company, without the express written consent of the Company’s CEO.
4.2. Reimbursement of Expenses. The Consultant must obtain the prior written consent
of the CEO of the Company or his delegate in order to receive reimbursement for expenses over
$10,000 for which the Consultant wishes to be reimbursed. The Consultant shall account to the
Company in writing for all expenses for which reimbursement is sought and shall supply to the
Company copies of all relevant invoices, receipts or other evidence reasonably requested by the
Company. None of the above expenses shall reduce the compensation payable to Consultant.
5. Termination
5.1 Reasons for Termination. This Agreement shall terminate upon the earliest to
occur of the following: (i) on the date of death of Consultant; or (ii) written notice by either
party to the other party with one hundred and eighty (180) days advance notice.
5.2
Payment and Effect of Termination. In the event this Agreement is terminated prior
to the Expiration Date, the Company shall have no further liability or obligation hereunder, except
reimbursement of expenses incurred prior to the Termination Date, subject to the requirements of
Section 4.2 hereof.
5.2.2 No Further Obligations. Upon the payments by the Company described
herein, the Company shall have no further liability or obligation to compensate the
Consultant, including, but not limited to, any payment of future compensation.
5.3 Miscellaneous. Upon any termination of this Agreement, regardless of the
cause therefor, Consultant shall not be required to return any Compensation paid to him
prior to the date of termination.
6. Restrictive Covenants.
6.1 Confidential Information. The Consultant shall not at any time divulge,
communicate, use to the detriment of the Company or for the benefit of any other person or persons,
or misuse in any way, any Confidential Information pertaining to the Company’s business. Any
Confidential Information or data now or hereafter acquired by the Consultant with respect to the
Company’s business (which shall include, but not be limited to, information concerning the
Company’s financial condition, prospects, technology, customers, suppliers, sources of leads and
methods of doing business) shall be deemed a valuable, special and unique asset of the Company that
is received by the Consultant in confidence and as a fiduciary, and Consultant shall remain a
fiduciary to the Company with respect to all of such information. For purposes of this Agreement,
“Confidential Information” means all trade secrets and information disclosed to the Consultant or
known by the Consultant as a consequence of or through the unique position of its engagement with
the Company prior to or after the date hereof, and not generally known to telecommunications
industry (other than as a result of unauthorized disclosure by the Consultant), with respect to the
Company or the Company’s business, and including proprietary or confidential information received
by the Company from third parties subject to an obligation on the Company’s part to maintain the
confidentiality of the information. Notwithstanding the foregoing, nothing herein shall be deemed
to restrict the Consultant from disclosing Confidential Information to promote the best interests
of the Company.
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6.2 Rights in Contemplated Future Work Product. The parties contemplate the
possibility that the Consultant may under this Agreement in the future undertake to create work
product for the Company as an independent contractor. In the event that the Consultant undertakes
any such work product for the Company, it shall be governed by the provisions of this Agreement.
6.2.1 Warranty against Infringement. The Consultant will not incorporate or allow to
be incorporated into any work product for the Company any material which is subject to the
copyrights or any other intellectual property rights of any third party, unless the Consultant has
the right to copy and incorporate such material. The Consultant agrees to indemnify the Company
against any proven case brought against the Company by any third party arising from any work
product the Consultant undertakes for the Company.
6.2.2 Work for Hire. All work product and “Developments” created by the Consultant in
the course of any work produced for the Company shall be deemed works made for hire for the
Company, with all rights, title and interest in all such work product owned by the Company.
“Developments” includes any idea, invention, process, design of a useful article (whether the
design is ornamental or otherwise), computer program, documentation, literary work, audio-visual
work, and any other work of authorship or inventorship, hereafter expressed, made or conceived
solely or jointly by the Consultant or the Consultant’s employees during the course of, or as a
result of, any future work produced for the Company, whether or not subject to patent, copyright,
or other forms of protection.
6.2.3 Assignment of Work Product and Developments. In the event that any such work
product or any Developments created for the Company are deemed not to be a work made for hire for
the Company, the Consultant hereby irrevocably assigns to the Company the Consultant’s entire
right, title and interest in all such work product and Developments.
6.3 Injunction. It is recognized and hereby acknowledged by the parties hereto that a
breach by the Consultant of any of the covenants contained in this Section 6 of this Agreement will
cause irreparable harm and damage to the Company, the monetary amount of which may be virtually
impossible to ascertain. As a result, the Consultant recognizes and hereby acknowledges that the
Company shall be entitled to an injunction from any court of competent jurisdiction enjoining and
restraining any violation of any or all of the covenants contained in this Section 6 of this
Agreement by the Consultant or any of its affiliates, associates, partners or agents, either
directly or indirectly, and that such right to injunction shall be cumulative and in addition to
whatever other remedies the Company may possess or be entitled to at law or in equity under this
Agreement.
6.4 Reasonableness of Restrictions. The Consultant has carefully read and considered
the provisions of Section 6 hereof and, having done so, agrees that the covenants set forth in this
Section 6 are fair and reasonable and are reasonably required to protect the legitimate business
interests of the Company. The Consultant agrees that the covenants set forth in this Section 6
hereof do not unreasonably impair the ability of the Consultant to conduct any unrelated business
or to find gainful work in the Consultant’s field. The parties hereto agree that if a court of
competent jurisdiction holds any of the covenants set forth in Section 6 unenforceable, the court
shall substitute an enforceable covenant that preserves, to the maximum lawful extent, the scope,
duration and all other aspects of the covenants deemed unenforceable, and that the covenant
substituted by the court shall be immediately enforceable against the Consultant. The foregoing
shall not be deemed to affect the right of the parties hereto to appeal any decision by a court
concerning this Agreement.
6.5. Survival. This Section 6 shall survive the termination of this Agreement and the
Consultant’s engagement hereunder.
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7. Arbitration.
7.1 Exclusive Remedy. The parties recognize that litigation in federal or state courts or
before federal or state administrative agencies of disputes arising out of the Consultant’s
engagement by the Company or out of this Agreement, or the termination of this Agreement, may not
be in the best interests of either the Consultant or the Company, and may result in unnecessary
costs, delays, complexities, and uncertainty. The parties agree that any dispute between the
parties arising out of or relating to the Consultant’s engagement hereunder, or to the negotiation,
execution, performance or termination of this Agreement, whether that dispute arises during or
after termination of this Agreement, shall be resolved by arbitration in Miami-Dade County, Florida
in accordance with the commercial arbitration rules of the American Arbitration Association (the
“AAA”), as modified by the provisions of this Section 7 (the “Rules”, by one (1) arbitrator which
Company and Consultant shall agree upon from a list provided by the AAA in accordance with the
Rules. In the event of failure of the parties hereto to agree to the appointment of an arbitrator
within ten (10) days after the commencement of the arbitration proceeding, such arbitrator shall be
appointed by the AAA in accordance with the Rules. Except as set forth below with respect to
Section 7 of this Agreement, the parties each further agree that the arbitration provisions of this
Agreement shall provide each party with its exclusive remedy, and each party expressly waives any
right it might have to seek redress in any other forum. Notwithstanding anything in this Agreement
to the contrary, the provisions of this Section 7 shall not apply to any injunctions that may be
sought with respect to disputes arising out of or relating to Section 7 of this Agreement. The
parties acknowledge and agree that their obligations under this arbitration agreement survive the
expiration or termination of this Agreement and continue after the termination of the relationship
between the Consultant and the Company. By election of arbitration as the means for final
settlement of all claims, the parties hereby waive their respective rights to, and agree not to,
xxx each other in any action in a federal, state or local court with respect to such claims, but
may seek to enforce in court an arbitration award rendered pursuant to this Agreement. The parties
specifically agree to waive their respective rights to a trial by jury, and further agree that no
demand, request or motion will be made for trial by jury.
7.2 Arbitration Procedure and Arbitrator’s Authority. In the arbitration proceeding,
each party shall be entitled to engage in any type of discovery permitted by the Federal Rules of
Civil Procedure, to retain their own counsel, to present evidence and cross-examine witnesses, to
purchase a stenographic record of the proceedings, and to submit post-hearing briefs. In reaching
his/her decision, the arbitrator shall have no authority to add to, detract from, or otherwise
modify any provision of this Agreement. The arbitrator shall submit with the award a written
opinion which shall include findings of fact and conclusions of law. Judgment upon the award
rendered by the arbitrator may be entered in any court having competent jurisdiction. The award or
decision shall be rendered by one arbitrator who shall be appointed by mutual agreement of the
parties hereto. In the event of failure of the parties to agree within thirty (30) days after the
commencement of the arbitration proceeding upon the appointment of the arbitrator, the arbitrator
shall be appointed by the AAA in accordance with its Rules.
7.3 Effect of Arbitrators’ Decision: Arbitrator’s Fees. The decision of the
arbitrator shall be final and binding between the parties as to all claims which were or could have
been raised in connection with the dispute, to the full extent permitted by law. In all cases in
which applicable federal law precludes a waiver of judicial remedies, the parties agree that the
decision of the arbitrator shall be a condition precedent to the institution or maintenance of any
legal, equitable, administrative, or other formal proceeding by the Consultant in connection with
the dispute, and that the decision and opinion of
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the arbitrator may be presented in any other forum on the merits of the dispute except as
provided in Section 6.3. The arbitrator’s fees and expenses and all administrative fees and
expenses associated with the filing of the arbitration shall be borne by the non-prevailing party.
8. OFAC Compliance. Neither the Consultant, his employees, or businesses under his
control (i) is a person whose property or interest in property is blocked or subject to blocking
pursuant to Section 1 of Executive Order 13224 of September 23, 2001 Blocking Property and
Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed.
Reg. 49079 (2001)) as amended, (ii) engages in any dealings or transactions prohibited by Section 2
of such executive order, or is otherwise associated with any such person in any manner violative of
Section 2, or (iii) is a person on the list of Specially Designated Nationals and Blocked Persons
or subject to the limitations or prohibitions under any other U.S. Department of Treasury’s Office
of Foreign Assets Control regulation or executive order.
9. Patriot Act; Foreign Corrupt Practices Act. The Company and the Consultant and
employees or businesses under Consultant’s direct control are in compliance, in all material
respects, with the Uniting and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, as amended. No part of the
proceeds of the payments associated with this Agreement will be used, directly or indirectly, for
any payments to any governmental official or employee, political party, official of a political
party, candidate for political office, or anyone else acting in an official capacity, in order to
obtain, retain or direct business or obtain any improper advantage, in violation of the United
States Foreign Corrupt Practices Act of 1977, as amended.
10. Damages; Attorneys’ Fees. Nothing contained herein shall be construed to prevent
the Company or the Consultant from seeking and recovering from the other damages sustained by
either or both of them as a result of its or breach of any term or provision of this Agreement. In
the event that either party hereto seeks to collect any damages resulting from, or the injunction
of any action constituting, a breach of any of the terms or provisions of this Agreement, then the
party found to be at fault shall pay all reasonable costs and attorneys’ fees of the other.
11. Assignment. The Company shall have the right to assign this Agreement and its
rights and obligations hereunder to any parent, wholly-owned subsidiary or to an affiliate, as well
as to any corporation or other entity with or into which the Company may hereafter merge or
consolidate or to which the Company may transfer all or substantially all of its assets, if in any
such case said corporation or other entity shall by operation of law or expressly in writing assume
all obligations of the Company hereunder as fully as if it had been originally made a party hereto,
but may not otherwise assign this Agreement or its rights and obligations hereunder without the
prior written consent of the Consultant. The Consultant may not assign or transfer this Agreement
or any rights or obligations hereunder without the express written consent of the Company which
consent shall not be unreasonably withheld.
12. Governing Law. This Agreement shall be governed by and construed and enforced in
accordance with the internal laws of the State of Florida, without regard to principles of conflict
of laws.
13. Entire Agreement. This Agreement constitutes the entire agreement among the
parties hereto with respect to the subject matter hereof and, upon their effectiveness, shall
supersede all prior agreements, understandings and arrangements, both oral and written, between the
Consultant and the Company (or any of its affiliates) with respect to such subject matter.
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14. Notices: All notices required or permitted to be given hereunder shall be in
writing and shall be personally delivered by courier, sent by registered or certified mail, return
receipt requested or sent by confirmed facsimile transmission addressed as set forth herein.
Notices personally delivered, sent by facsimile or sent by overnight courier shall be deemed given
on the date of delivery and notices mailed in accordance with the foregoing shall be deemed given
upon the earlier of receipt by the addressee, as evidenced by the return receipt thereof, or three
(3) days after deposit in the U.S. mail. Notice shall be sent as follows:
If to the Company:
|
Terremark Management Services, Inc. 0000 Xxxxx Xxxxxxxx Xxxxx Xxxxx, Xxxxxxx 00000 Attention: Chief Legal Officer Fax: 000-000-0000 |
|
If to the Consultant:
|
Xxxxxxxxx Xxxxx 0000 Xxx Xxxxx Xxxx. Xxxxx Xxxxxx, XX 00000 |
15. Benefits; Binding Effect. This Agreement shall be for the benefit of and binding
upon the parties hereto and their respective heirs, personal representatives, legal
representatives, successors and, where permitted and applicable, assigns, including, without
limitation, any successor to the Company, whether by merger, consolidation, sale of stock, sale of
assets or otherwise.
16. Right to Consult with Counsel; No Drafting Party. The Consultant acknowledges
having read and considered all of the provisions of this Agreement carefully, and having had the
opportunity to consult with counsel of the Consultant’s own choosing. The Consultant acknowledges
that he has had an opportunity to negotiate any and all of these provisions and no rule of
construction shall be used that would interpret any provision in favor of or against a party on the
basis of who drafted the Agreement.
17. Severability. The invalidity of any one or more of the words, phrases, sentences,
clauses, provisions, sections or articles contained in this Agreement shall not affect the
enforceability of the remaining portions of this Agreement or any part thereof, all of which are
inserted conditionally on their being valid in law, and, in the event that any one or more of the
words, phrases, sentences, clauses, provisions, sections or articles contained in this Agreement
shall be declared invalid, this Agreement shall be construed as if such invalid word or words,
phrase or phrases, sentence or sentences, clause or clauses, provisions or provisions, section or
sections or article or articles had not been inserted. If such invalidity is caused by length of
time or size of area, or both, the otherwise invalid provision will be considered to be reduced to
a period or area which would cure such invalidity.
18. Waivers. The waiver by either party hereto of a breach or violation of any term
or provision of this Agreement shall not operate nor be construed as a waiver of any subsequent
breach or violation.
19. Section Headings. The article, section and paragraph headings contained in this
Agreement are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
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20. No Third Party Beneficiary. Nothing expressed or implied in this Agreement is
intended, or shall be construed, to confer upon or give any person other than the Company, the
parties hereto and their respective heirs, personal representatives, legal representatives,
successors and permitted assigns, any rights or remedies under or by reason of this Agreement.
21. Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original but all of which together shall constitute one and the same
instrument and agreement.
22. Indemnification.
22.1 The Company hereby agrees to hold harmless, defend and indemnify the Consultant from
and against any and all costs and expenses (including trial, appellate and other reasonable
attorneys’ fees), judgments, fines, actions, liabilities, claims, penalties and amounts paid in
settlement (collectively, “Indemnified Losses”) to which the Consultant may become subject or
liable or which may be incurred by or assessed against the Consultant relating to or arising out
of: (i) gross negligence or willful misconduct by the Company; (ii) failure of the Company’s to
comply with material obligations from this Agreement; or (iii) the performance of services by the
Consultant for the Company in strict accordance with the terms of this Agreement, unless the
Indemnified Losses were directly or proximately caused by the Consultant’s breach of this
Agreement, misrepresentation, fraud, gross negligence or willful misconduct.
22.2 The Consultant hereby agrees to hold harmless, defend and indemnify the Company, its
officer, directors, agents and assigns (each, a “Company Indemnitee”) from and against any and all
Indemnified Losses to which any Company Indemnitee may become subject or liable or which may be
incurred by or assessed against any Company Indemnitee relating to or arising out of: (i) any
liabilities, improper actions or omissions of the Consultant; (ii) the breach by the Consultant of
its covenants, representations or warranties hereunder; (iii) Indemnified Losses that were directly
or proximately caused by the Consultant’s breach of this Agreement, misrepresentation, fraud, gross
negligence or willful misconduct.
23. Survival. The provisions of this Agreement that are intended to survive the
termination hereof (including Articles 5.2, 5.4, 6 and 22) shall survive the expiration or
termination of the Term hereunder.
24. Further Assurances. Each party hereto shall execute and deliver all reasonably
required documents and perform all other acts which may be reasonably requested by the other party
hereto to implement and carry out the terms and conditions of the transactions contemplated herein.
Neither party shall take any action or fail to take any action which could reasonably be expected
to frustrate the intent and purposes of this Agreement.
[SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above
written.
| COMPANY: TERREMARK MANAGEMENT SERVICES , INC. |
||||
| By: | /s/ Xxxx Xxxxxxx | |||
| Name: | Xxxx Xxxxxxx | |||
| Title: | Chief Financial Officer | |||
| CONSULTANT: |
||||
| /s/ Xxxxxxxxx Xxxxx | ||||
| Xxxxxxxxx Xxxxx | ||||
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