Tatum, LLC Full-Time Permanent Engagement Resources Agreement
Exhibit 10.1
January 1, 2007
Xponential, Inc.
0000 Xxxxxxxx Xxxx., Xxxxx 000
Xxxxxxxx, XX 00000
0000 Xxxxxxxx Xxxx., Xxxxx 000
Xxxxxxxx, XX 00000
Dear Xx. Xxxxxx:
Xxxxx, LLC (“Xxxxx”) understands that each of Xponential, Inc. (“Xponential”) and American
IronHorse Motorcycle Company, Inc. (“American Ironhorse”) (collectively, the “Company”) desire to
hire Xxxxxx Xxxxxxxxx, one of our partners, as an employee of the Company (the “Employee”). The
Company acknowledges that the Employee is and will remain a partner in our firm so that he will
have access to our firm’s resources for use in his employment with the Company. This Full-Time
Permanent Engagement Resources Agreement (the “Resources Agreement”) sets forth the rights of the
Company, through the Employee, to use such resources for the benefit of the Company and for the
payment for such services and for making the Employee available for service to the Company.
Since the Employee will be under the control and direct management of the Company, and not Xxxxx,
Xxxxx’x obligations to the Company are exclusively those set forth in this Resources Agreement.
This document will serve as the entire agreement between the Company and Xxxxx.
Compensation
Xponential, on behalf of the Company, will pay directly to Xxxxx, as compensation for resources
provided, (i) $ 50,000, payable on the date of signing this Resources Agreement (the “Signing Fee”)
and (ii) $1,000 per month during the term of this Resources Agreement, including any months with
respect to which any severance payment is made, payable at the same time the Employee is paid. In
addition, Xponential will pay to Xxxxx twenty five percent (25%) of Employee’s cash bonuses earned
as an employee of Xponential during the year ended December 31, 2007 payable on the date Employee
receives payment of the bonus and American IronHorse will pay to Xxxxx twenty five percent (25%) of
Employee’s cash bonuses earned as an employee of American IronHorse during the year ended December
31, 2007 payable on the date Employee receives payment of the bonus. For example, with respect to
the cash bonuses, if Employee is entitled to a $100,000 bonus from Xponential, Xponential will pay
Xxxxx $25,000 and Employee $75,000.
In addition, the Company acknowledges that the Employee will share with Xxxxx 15% of any cash
proceeds realized from any Equity Bonus that the Employee may be granted.
For purposes hereof, “Equity Bonus” means any stock, option, warrant, or similar right (i.e., not
yet realized in cash) that is granted, in each case in connection with services rendered by the
Employee and “Salary” means all compensation paid to Employee, except bonuses and benefits
(including medical benefits subsidy paid to Employee). Xxxxx shall look only to Employee with
respect to payment of any portion of an Equity Bonus. All compensation payable or deliverable to
Xxxxx is referred to herein as the “Resource Fee.”
Payment of the Signing Fee will be made concurrently with the signing of this Resources Agreement.
All other payments to Xxxxx should be made by direct deposit through the Company’s payroll, or by
an automated clearing house (“ACH”) payment at the same time as payments are made to the Employee.
If
such payment method is not available and payments are made by check, Xxxxx will issue invoices to
the Company, and the Company agrees to pay such invoices no later than ten (10) days after receipt
of invoices.
Termination
This Resources Agreement will terminate immediately upon the effective date of termination or
expiration of the Employee’s employment with Xponential and American IronHorse or upon the Employee
ceasing to be a partner of Xxxxx.
In the event that either party commits a breach of this Resources Agreement and fails to cure the
same within seven (7) days following delivery by the non-breaching party of written notice
specifying the nature of the breach, the non-breaching party will have the right to terminate this
Resources Agreement immediately effective upon written notice of such termination.
Hiring Employee Outside of Resources Agreement
During the twelve (12)-month period following termination or expiration of this Resources Agreement
other than (i) as a result of Xxxxx’x termination of Employee’s membership interest in Xxxxx
without good cause as determined by Xxxxx in its sole good faith discretion or (ii) other than in
connection with another Xxxxx agreement, the Company will not employ the Employee, or engage the
Employee as an independent contractor, to render services of substantially the same nature as those
for which Xxxxx is making the Employee available pursuant to this Resources Agreement. The parties
recognize and agree that a breach by the Company of this provision would result in the loss to
Xxxxx of the Employee’s valuable expertise and revenue potential and that such injury will be
impossible or very difficult to ascertain. Therefore, in the event this provision is breached,
Xxxxx will be entitled to receive as liquidated damages an amount equal to forty-five percent (45%)
of the Employee’s Annualized Compensation (as defined below), which amount the parties agree is
reasonably proportionate to the probable loss to Xxxxx and is not intended as a penalty. If,
however, a court or arbitrator, as applicable, determines that liquidated damages are not
appropriate for such breach, Xxxxx will have the right to seek actual damages. The amount will be
due and payable to Xxxxx upon written demand to the Company. For this
purpose, “Annualized
Compensation’’ will mean the Employee’s most recent annual Salary and the maximum amount of any
bonus for which the Employee was eligible with respect to the then current bonus year.
Insurance
The Company will provide Xxxxx or the Employee with written evidence that the Company maintains
directors’ and officers’ insurance in an amount reasonably acceptable to the Employee at no
additional cost to the Employee, and the Company will maintain such insurance at all times while
this agreement remains in effect.
Furthermore, the Company will maintain such insurance coverage with respect to occurrences arising
during the term of this agreement for at least three years following the termination or expiration
of this agreement or will purchase a directors’ and officers’ extended reporting period, or “tail,”
policy to cover the Employee.
Disclaimers, Limitations of Liability & Indemnity
It is understood that Xxxxx does not have a contractual obligation to the Company other than to
make its resources available to the Employee (by virtue of the Employee being a partner in Xxxxx)
for the benefit of the Company under the terms and conditions of this Resources Agreement. The
Resource Fee will be for the resources provided and for making the Employee available for service
to the Company. Xxxxx
assumes no responsibility or liability under this Resources Agreement other than to render the
services called for hereunder and will not be responsible for any action taken by the Company in
following or declining to follow any of Xxxxx’x advice or recommendations.
Xxxxx represents to the Company that Xxxxx has conducted its standard screening and investigation
procedures with respect to the Employee becoming a partner in Xxxxx, and the results of the same
were satisfactory to Xxxxx. Xxxxx disclaims all other warranties, either express or implied.
Without limiting the foregoing, Xxxxx makes no representation or warranty as to the accuracy or
reliability of reports, projections, forecasts, or any other information derived from use of
Xxxxx’x resources, and Xxxxx will not be liable for any claims of reliance on such reports,
projections, forecasts, or information. Xxxxx will not be liable for any non-compliance of
reports, projections, forecasts, or information or services with federal, state, or local laws or
regulations. Such reports, projections, forecasts, or information or services are for the sole
benefit of the Company and not any unnamed third parties.
In the event that any partner of Xxxxx (including without limitation the Employee to the extent not
otherwise entitled in his or her capacity as an officer of the Company) is subpoenaed or otherwise
required to appear as a witness or Xxxxx or such partner is required to provide evidence, in either
case in connection with any action, suit, or other proceeding initiated by a third party against
the Company or by the Company against a third party, then the Company shall reimburse Xxxxx for the
costs and expenses (including reasonable attorneys’ fees) actually incurred by Xxxxx or such
partner and provide Xxxxx with compensation at Xxxxx’x customary rate for the time incurred.
The Company agrees that, with respect to any claims the Company may assert against Xxxxx in
connection with this Resources Agreement or the relationship arising hereunder, Xxxxx’x total
liability will not exceed two (2) months of the then current monthly Resource Fee.
As a condition for recovery of any liability, the Company must assert any claim against Xxxxx
within three (3) months after discovery or sixty (60) days after the termination or expiration of
this Resources Agreement, whichever is earlier.
Xxxxx will not be liable in any event for incidental, consequential, punitive, or special damages,
including without limitation, any interruption of business or loss of business, profit, or
goodwill.
Arbitration
If the parties are unable to resolve any dispute arising out of or in connection with this
Resources Agreement, either party may refer the dispute to arbitration by a single arbitrator
selected by the parties according to the rules of the American Arbitration Association (“AAA”), and
the decision of the arbitrator will be final and binding on both parties. Such arbitration will be
conducted by the Atlanta, Georgia office of the AAA. In the event that the parties fail to agree
on the selection of the arbitrator within thirty (30) days after either party’s request for
arbitration under this paragraph, the arbitrator will be chosen by AAA. The arbitrator may in his
discretion order documentary discovery but shall not allow depositions without a showing of
compelling need. The arbitrator will render his decision within ninety (90) days after the call
for arbitration. The arbitrator will have no authority to award punitive damages. Judgment on the
award of the arbitrator may be entered in and enforced by any court of competent jurisdiction. The
arbitrator will have no authority to award damages in excess or in contravention of this Resources
Agreement and may not amend or disregard any provision herein. Notwithstanding the foregoing, no
issue related to the ownership of intellectual property will be subject to arbitration but will
instead be subject to determination by a court of competent jurisdiction, and either party may seek
injunctive relief in any court of competent jurisdiction.
Miscellaneous
Xxxxx will be entitled to receive all reasonable costs and expenses incidental to the collection of
overdue amounts under this Resources Agreement, including but not limited to reasonable attorneys’
fees actually incurred.
The Company agrees to allow Xxxxx to use the Company’s logo and name on Xxxxx’x website and other
marketing materials for the sole purpose of identifying the Company as a client of Xxxxx. Xxxxx
will not use the Company’s logo or name in any press release or general circulation advertisement
without the Company’s prior written consent.
Neither the Company nor Xxxxx will be deemed to have waived any rights or remedies accruing under
this Resources Agreement unless such waiver is in writing and signed by the party electing to waive
the right or remedy. This Resources Agreement binds and benefits the successors of Xxxxx and the
Company.
Neither party will be liable for any delay or failure to perform under this Resources Agreement
(other than with respect to payment obligations) to the extent such delay or failure is a result of
an act of God, war, earthquake, civil disobedience, court order, labor dispute, or other cause
beyond such party’s reasonable control.
The terms of this Resources Agreement are severable and may not be amended except in a writing
signed by Xxxxx and the Company. If any portion of this Resources Agreement is found to be
unenforceable, the rest of the Resources Agreement will be enforceable except to the extent that
the severed provision deprives either party of a substantial portion of its bargain.
The provisions in this Resources Agreement concerning payment of compensation and reimbursement of
costs and expenses, limitation of liability, directors’ and officers’ insurance, and arbitration
will survive any termination or expiration of this Resources Agreement.
This Resources Agreement will be governed by and construed in all respects in accordance with the
laws of the State of Georgia, without giving effect to conflicts-of-laws principles.
Nothing in this Resources Agreement shall confer any rights upon any person or entity other than
the parties hereto and their respective successors and permitted assigns and the Employee.
Each person signing below is authorized to sign on behalf of the party indicated, and in each case
such signature is the only one necessary.
Anything herein to the contrary notwithstanding, this Resources Agreement supersedes all prior
agreements between Xxxxx and the Company relating to Employee effective as of January 1, 2007.
Bank Lockbox Mailing Address for Deposit and Resource Fee only:
Xxxxx, LLC
X.X. Xxx 000000
Xxxxxxx, XX 00000-0000
X.X. Xxx 000000
Xxxxxxx, XX 00000-0000
Electronic Payment Instructions for Deposit and Resource Fee:
Bank Name: Bank of America |
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Branch: Atlanta |
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Routing Number:
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For ACH Payments: XXXXXXX | |
| For Wires: XXXXXX | ||
Account Name: Xxxxx, LLC |
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Account Number: XXXXXXX |
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| Please reference Xponential in the body of the wire. | ||
Although Xponential and American IronHorse are both parties to this Resources Agreement and
collectively defined as the “Company,” the obligations of each of Xponential and American IronHorse
hereunder relate only to the employment of Xxxxxx Xxxxxxxxx by such entity. Neither Xponential nor
American IronHorse are assuming the obligations of the other party or otherwise guaranteeing the
performance of any obligations of the other party hereunder.
Please sign below and return a signed copy of this letter to indicate the Company’s agreement with
its terms and conditions.
We look forward to serving you.
Sincerely yours,
| XXXXX, LLC | ||
By:
|
/s/ Xxxxxxx X. Xxxxx | |
| Area Managing Partner for XXXXX, LLC | ||
Date:
|
May 23, 2007 | |
Acknowledged and agreed by:
| Xponential, Inc. | ||||
| By: | /s/ Xxxxxx X. Xxxxxx | |||
| Title: | Chief Executive Officer | |||
| Date: | May 21, 2007 | |||
| American IronHorse Motorcycle Company, Inc. | ||||
| By: | /s/ Xxxxxx X. Xxxxxx | |||
| Title: | Chairman | |||
| Date: | May 21, 2007 | |||
