CONSULTING AGREEMENT Exhibit 10.61
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This Consulting Agreement (hereinafter "Agreement") dated as of May 1, 2002,
between XXXXXX XXXXXXXXXX, INC., a corporation organized and existing under the
laws of the State of Delaware (hereinafter "Corporation") and CAMBRIDGE
DEVELOPMENT CORPORATION, 00 Xxxxxxxxxxxx Xxxxxx, Xxxx Xxxxxxxxxx, Xxx Xxxx 00000
(hereinafter "Consultant"), and Xxxxxx X. Xxxxxxxx (hereinafter "Xxxxxxxx"), the
President of Consultant residing at 00 Xxxxxx Xxxx, Xxxx Xxxxxxxxxx, Xxx Xxxx
00000. Collectively hereinafter referred to as "Parties".
WHEREAS, Corporation, Consultant and Xxxxxxxx are parties to a Consulting
Agreement dated November 1, 1999 extending through May 31, 2003, which is hereby
terminated without liability to either party.
WHEREAS, the parties wish to enter into a new Consulting Agreement under revised
terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual understanding set forth herein,
the Parties agree as follows:
1. Consultant's Duties: The Corporation hereby engages the Consultant as its
business and financial consultant. Subject at all times to the control and
direction of the Corporations's Chief Executive Officer, Chief Operating Officer
and Chief Financial Officer (hereinafter Management), the Consultant shall have
the duties as the general advisor and consultant to Management on all matters
pertaining to the business and to render all other services relevant thereto.
The Consultant, by Xxxxxxxx, shall perform all other duties that may be
reasonably assigned to it by Management provided said duties be consistent with
the prestige and responsibility of Xxxxxxxx'x position. The Consultant shall,
through its agents, servants and employees, devote its best efforts at all times
necessary to perform its duties and to advance the Corporation's best interests,
subject to reasonable vacations. The Consultant and the Corporation acknowledge
that the Consultant and its agents, servants and employees have other business
interests and shall not be required to devote its exclusive time and attention
to the performance of its duties hereunder.
2. Term: Unless sooner terminated as provided in Section 7 below, this
Agreement shall be for a term of three (3) years and eleven (11) months
commencing as of May 1, 2002 and ending on March 31, 2006; provided however,
that the term of this Agreement shall be automatically extended on the same
terms and conditions for a one year period and from year to year thereafter
unless either the Corporation or the Consultant shall give written notice of the
termination of this Agreement to the other at least six (6) months prior to the
expiration of said term or extended term.
3. Compensation: For all services rendered by the Consultant under this
Agreement, the Corporation shall pay to Consultant as compensation the sum of
$96,200 per annum payable in equal bi-weekly installments of $3,700.00.
4. Health and Life Insurance: The Corporation shall, at no cost to the
Consultant or Xxxxxxxx, provide Xxxxxxxx with full health insurance, basic,
major medical and dental as well as group life insurance. Said coverage shall be
identical to that afforded the Corporation's Management.
CONSULTING AGREEMENT
Page 2
5. Expenses: Consultant will be reimbursed by the Corporation for all
reasonable business expenses incurred by the Consultant in the performance of
its duties. Said reimbursement shall be made no less frequently than monthly
upon submission by the Consultant of a written request for same.
6. Stock Options (Warrants): Xxxxxxxx shall be granted non qualified stock
options (warrants) to purchase 30,000 shares of Corporation's common stock at an
exercise price of $1.86 per share being the closing price of the shares of
common stock on April 30, 2002. The options (warrants) shall be exercisable at
the rate of 10,000 on March 31, 2004, 10,000 on March 31, 2005 and 10,000 on
March 31, 2006. Each option (warrant) shall be exercised within a period of ten
(10) years after the date of the grant unless earlier terminated in accordance
with its terms or those of this Agreement. The rights of Xxxxxxxx with respect
to any stock option (warrant) granted to Xxxxxxxx shall be determined
exclusively by the plans and agreements relating to the options (warrants) and
this Agreement shall not affect, in any way, the rights and obligations of the
plans and agreements.
7. Early Termination: The Corporation may terminate the Consultant's
relationship under this Agreement prior to the expiration of the term set forth
in Section 2 above only under the following circumstances:
i. Death. Upon the death of Xxxxxxxx.
ii. Disability. If, as a result of Xxxxxxxx'x incapacity due to physical
or mental illness, Xxxxxxxx having been unable to perform his duties
under this Agreement for period of six consecutive calendar months,
then thirty (30) days after written notice of termination is given to
Consultant (which may only be given after the end of the six
consecutive calendar month period) provided that Xxxxxxxx has not
returned to his duties under this Agreement.
iii. For Cause. The Corporation shall have "Cause" to terminate this
Agreement upon
(a) the willful and continued failure by Consultant to substantially
perform its duties under this Agreement (other than any failure
resulting from Xxxxxxxx'x incapacity due to physical or mental
illness) for thirty (30) days after written demand for
substantial performance is delivered by the Corporation
specifically identifying the manner in which the Corporation
believes Consultant has not substantially performed its duties,
or (b) the willful engaging by Consultant or Xxxxxxxx in
misconduct (including embezzlement and criminal fraud) which is
materially injurious to the Corporation, or (c) the conviction of
Xxxxxxxx of a felony. For purposes of this paragraph, no act, or
failure to act, by the Consultant shall be considered "willful"
unless done or omitted to be done, by Consultant not in good
faith and without reasonable belief that its action or omission
was in the interest of the Corporation. Consultant shall not be
deemed to have been terminated for Cause unless and until there
shall have been delivered to Consultant a copy of a resolution,
duly adopted by the affirmative vote of a majority of the entire
membership of the Board of Directors (Board) at a meeting of the
Board called and held for such purpose (after a reasonable notice
to the Consultant and an opportunity for Consultant, together
with its counsel, to be heard before the Board), finding that in
the good faith opinion of the Board, Consultant was guilty of
conduct set forth above and specifying the particulars of the
conduct in detail.
CONSULTING AGREEMENT
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iv. Termination by Consultant or Xxxxxxxx. Consultant or Xxxxxxxx may
terminate this Agreement (a) for Good Reason (as defined below) or (b)
Xxxxxxxx'x health should become impaired to any extent that makes the
performance of his duties under this Agreement hazardous to his
physical or mental health or his life, provided that Xxxxxxxx shall
have furnished the Corporation with a written statement from a
qualified doctor to that effect and provided further that at the
Corporation's request and expense Xxxxxxxx shall submit to an
examination by a doctor selected by the Corporation, and the doctor
shall have concurred in the conclusion of Xxxxxxxx'x doctor.
Consultant shall give the Corporation thirty (30) days prior written
notice of its intent to terminate this agreement.
"Good Reason" means the Corporation has had a Change in Control. For
purposes of this Agreement, a Change in Control means the occurrence
of an event or series of events (whether or not approved by the Board)
by which any person or other entity or group of persons or other
entities acting in concert as determined in accordance with Section
12(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), whether or not applicable, together with its or their
affiliates or associates shall, as a result of a tender offer or
exchange offer, open market purchases, privately negotiated purchases,
merger or otherwise (including pursuant to receipt of revocable
proxies) (a) be or become directly or indirectly the beneficial owner
(within the meaning of Rule 13d-3 and Rule 13d-5 under the Exchange
Act, whether or not applicable, except that a person shall be deemed
to have beneficial ownership of all securities that such person has
the right to acquire whether such right is exercisable immediately or
only after the passage of time) of more than thirty (30) percent of
the combined voting power of the then outstanding common stock of the
Corporation or (b) otherwise have the ability to elect, directly or
indirectly, a majority of the Board.
v. Notice of Termination. Any termination of this Agreement shall be
communicated by written Notice of Termination to the other party of
this Agreement. "Notice of Termination" means a notice which indicates
the specific termination provision in this Agreement relied upon and
shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for the termination of the Consultant's
retention under the provision so indicated.
vi. Date of Termination. Date of termination means
(a) if the Agreement is terminated by Xxxxxxxx'x death, the date of
his death, (b) if the Consultant's retention is terminated pursuant to
subsection 7(iii)(a) above, thirty (30) days after Notice of
Termination is given provided that Xxxxxxxx shall not have returned to
the performance of his duties during the thirty (30) day period, (c)
if the Consultant's retention is terminated pursuant to subsection
7(iii)(c) above, the date specified in the Notice of Termination
after the expiration of any cure periods, and (d) if the Consultant's
retention is terminated for any other reason, the date on which Notice
of Termination is given.
CONSULTING AGREEMENT
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8. Compensation Upon Termination or During Disability:
i. Upon Xxxxxxxx'x death, the Corporation shall pay to the person
designated by Consultant in a notice filed with the Corporation or, if
no person is designated, to Xxxxxxxx'x estate as a lump sum death
benefit, Consultant's full compensation for a period of six (6) months
after the date of Xxxxxxxx'x death. Upon full payment of amounts
required to be paid under this subsection, the Corporation shall have
no further obligation under this Agreement.
ii. During any period that Xxxxxxxx fails to perform his duties under this
Agreement as a result of incapacity due to physical or mental illness,
Consultant shall continue to receive its full compensation until the
Consultant's relationship is terminated pursuant to Section 7(ii) of
this Agreement, or until Consultant shall receive a lump sum of six
months' compensation.
iii. If the Consultant's retention is terminated for Cause as defined in
subsection 7(iii), the Corporation shall pay the Consultant its
compensation through the date of termination at the rate in effect at
the time Notice of Termination is delivered and the Corporation shall
have no further obligation to Consultant under this Agreement.
iv. If (a) in breach of this Agreement, the Corporation shall terminate
the Consulting relationship other than pursuant to Sections 7(iii)(b)
or 7(iii)(c) (it being understood that a purported termination
pursuant to Sections 7(iii)(b) or 7(iii)(c) which is disputed and
finally determined not to have been proper shall be a termination by
the Corporation in breach of this Agreement), or (b) the Consultant
shall terminate the relationship for Good Reason, then
(1) The Corporation shall pay the Consultant its full compensation
through the date of termination at the rate then in effect at the time
Notice of Termination is given through the end of the Term;
(2) In the event of a Change in Control as defined in Section 7(iv),
the Corporation shall pay Consultant, in a lump sum, an amount equal
to the greater of (a) twice the amount then due through the end of the
Term; or (b) two times the annual compensation paid to Consultant.
(3) In the event of a Change in Control of the Corporation as defined
in Section 7(iv) above, the total number of outstanding unexercised
options (warrants) granted to Consultant under this Agreement as well
as any previous employment, consultant or other agreements, shall be
doubled in quantity while retaining the original exercise price.
(4) The Corporation shall pay all reasonable legal fees and expenses
incurred by Consultant in contesting or disputing any such termination
or in seeking to obtain or enforce any right or benefit in this
Agreement.
CONSULTING AGREEMENT
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v. Unless the Consultant is terminated for Cause, the Corporation shall
maintain in full force and effect, for the continued benefit of
Consultant for the greater of the remaining term of this Agreement or
eighteen (18) months after termination of this Agreement, all health
and hospitalization plans and programs in which Consultant was
entitled to participate in immediately prior to the Date of
Termination as defined in Section 4 of this Agreement, provided that
Consultant's continued participation is possible under the general
terms and provisions of the plans and programs. If Consultant's
participation in any plan or program is barred, the Corporation shall
arrange to provide the Consultant with benefits substantially similar
to those which Consultant would otherwise have been entitled to
receive under the plan and program from which his continued
participation is barred.
9. Savings Clause: The determination that any provision of this Agreement is
unenforceable shall not terminate this Agreement or otherwise affect the other
provisions of this Agreement, it being the intention of the parties hereto that
this Agreement shall be construed to permit the equitable reformation of such
provision to permit the enforcement thereof, if possible, and otherwise to
permit the enforcement of the remaining provisions of this Agreement as if such
unenforceable provision were not included herein.
10. Equitable Relief: The parties hereto agree and declare that legal remedies
may be inadequate to enforce the provisions of this Agreement and that equitable
relief, including specific performance and injunctive relief, may be used to
enforce the provisions of this Agreement.
11. Notices: Any notice required or permitted to be given under this Agreement
shall be in writing and shall be deemed to have been given and received on the
date when personally delivered or deposited in the United States Mail,
registered postage prepaid, addressed:
a. if to the Corporation to: Xx. Xxxx Xxxxxx Xxxxxx Xxxxxxxxxx, Inc. 0000
X.X. 00xx Xxxxxx Xxxx Xxxxxxxxxx, XX 00000
b. if to the Consultant or Xxxxxxxx to: Xx. Xxxxxx Xxxxxxxx 00 Xxxxxx Xxxx
Xxxx Xxxxxxxxxx, XX 00000
or to such other address as the Corporation or the Consultant may designate in
writing.
12. Amendments: This Agreement may be amended or modified only by a writing.
13. Governing Law: This Agreement shall be governed and construed under the laws
of the State of Florida.
14. Entire Agreement: This Agreement constitutes the entire Agreement between
the Consultant, Xxxxxxxx and the Corporation, with respect to its subject
matter, and all prior and other agreements between them, oral or written
concerning the same subject matter are merged into this Agreement and thus
extinguished.
CONSULTING AGREEMENT
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15. Survival of Covenants: Any of the provisions in this Agreement which would
by their terms continue after the termination of this Agreement shall be deemed
to survive such termination.
16. Assignability and Binding Effect: This Agreement shall be binding upon and
inure to the benefit of the Corporation and its successors and assigns. This
Agreement may not be assigned by either party without the written consent of the
other party hereto.
IN WITNESS WHEREOF, the parties have hereunto set their hands and seals as of
the date first written above.
XXXXXX XXXXXXXXXX, INC.
By: /s/ Xxxx Xxxxxx
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Xxxx Xxxxxx, Chief Executive Officer
Consultant:
CAMBRIDGE DEVELOPMENT CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx, President
and Xxxxxx X. Xxxxxxxx
Individually
