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EXHIBIT 10.1
CONSULTING AGREEMENT
This Consulting Agreement ("Agreement") is entered into between
eResource Capital Group, Inc. (formerly known as Xxxxxxxxxx.xxx), a Delaware
Corporation, its affiliates and subsidiaries (collectively, the "Company"), on
the one hand, and Xxxx Xxxxxxxx ("Executive"), on the other hand.
W I T N E S S E T H:
WHEREAS, Executive has been employed by the Company pursuant to an
employment agreement dated May 7, 2000 (the "Employment Agreement");
WHEREAS, the Company and Executive mutually desire Executive to resign
from his position at the Company, effective December 8, 2000 (the "Termination
Date");
WHEREAS, the Company desires Executive to provide it with consulting
services from time to time and Executive is willing to provide such services to
the extent set forth below;
WHEREAS, the Company and Executive have independently negotiated the
terms of this Agreement, and desire to settle fully and finally all potential
claims either party may have against the other party; and
WHEREAS, except as expressly provided herein, the Company and Executive
intend that this Agreement supersedes the Employment Agreement and any
provisions of any other agreements between the Company and Executive;
NOW, THEREFORE, in consideration of the covenants and agreements set
forth herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and Executive agree as
follows as of the date this Agreement is signed by Executive below (the
"Effective Date"):
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1. Consulting Services.
(a) For a period of eight months from the Termination Date (the
"Consulting Term"), Executive will provide consulting services to the Company
from time to time upon the Company's request. Executive shall perform such
services in Atlanta, Georgia and the nature of the services shall be as mutually
agreed by Executive and the Company from time to time. The Company may require
Executive to provide up to two hours of such services in any week during the
Consulting Term, provided the Company has requested such services from Executive
at least two business days in advance and Executive has actual notice of such
request. Any such services shall be conducted at whatever times Executive in his
sole discretion determines to be acceptable. The Company acknowledges and agrees
that Executive may for reasonable periods of time during the Consulting Term be
outside the greater Atlanta metropolitan area to engage in activities for other
business endeavors or for vacation. On such days, Executive shall not be
required to provide any consulting services to the Company. If Executive, in his
sole discretion, performs additional or different consulting services for the
Company or provides services upon less than two business days notice, such
actions by Executive shall not be a waiver of his rights under this Section to
limit the kinds and amounts of consulting services he must provide during the
remainder of the Consulting Term or to refuse to provide such services upon
notice of less than two business days.
(b) The Company shall not be entitled to terminate this Agreement,
stop making the payments under Section 2, or refuse to abide by any of the stock
option provisions in Section 3 based on a contention that it is not using or is
any way dissatisfied with Executive's consulting services.
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(c) Executive's consulting obligations under this Section 1 shall not
in any way prohibit or otherwise restrict him from accepting or performing full
time employment on behalf of himself or any business venture.
2. Payments to Executive.
The Company shall (a) continue to pay Executive his salary for a period
of eight months from the Termination Date at the rate of $160,000 per year,
which continued salary payments shall be made in accordance with the Company's
standard payroll practices and procedures for its salaried employees generally,
but in no event less frequently than twice per month at the rate of $6,666.67
per payment, and (b) pay on Executive's behalf all COBRA premiums necessary to
continue benefits coverage for Executive for eight months from the Termination
Date. The Company shall not withhold any amounts for taxes from the payments
under this Section 2. Executive agrees that he is responsible for any personal
federal and state tax liabilities arising as a result of the payments under this
Section 2 and further agrees to indemnify and hold harmless the Company for any
such taxes and penalties assessed because Executive failed to pay timely the
taxes due on such payments.
3. Stock Options.
(a) In accordance with Section 3(c) of the Employment Agreement,
the Company hereby grants Executive an option (the "Option"), pursuant to the
Option Agreement attached as Exhibit B, to purchase 500,000 shares (the
"Shares") of the Company's common stock, par value $0.04 per share, at an
exercise price of $1.4375 per share. Any and all Shares subject to the Option
not vested as of the Effective Date shall vest as of the Effective Date.
Executive shall have the right to exercise all or any part of the Option at any
time prior to three (3) years after the Effective Date.
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(b) The Company shall file a registration statement on Form S-8
with the Securities Exchange Commission such that all of the Shares subject to
the Option shall be registered shares upon the exercise of the Option. Such
registration statement shall be effective prior to February 15, 2001.
(c) If Executive seeks to acquire by exercise of the Option all or
part of the registered Shares and the Company declines to allow him to acquire
such Shares, whether because the Company has not obtained shareholder approval
for the Option or otherwise, the Company shall pay Executive, within ten days
after his attempt to acquire such Shares, (i) an amount equal to the difference
between the number of Shares Executive sought to acquire multiplied by the
closing price for a share of the Company's common stock as of the date Executive
sought to acquire such shares, on the one hand, and $1.4375 per share multiplied
by the number of shares Executive sought to acquire, on the other hand, and (ii)
an additional payment sufficient for Executive to pay any federal, state and
local income tax and social security or other employment tax on the amount paid
under this Section 3(c), as well as any additional federal, state and local
income tax and social security or other employment tax on any such payment,
determined using the top marginal rates of federal, state and local income taxes
and social security or other employment taxes applicable to the Executive's
taxable income in effect for the year of payment.
(d) At any time prior to the date eighteen (18) months after the
Effective Date, the Company may require Executive to exercise and sell up to
100,000 of the Shares (the "Company Exercise Shares") subject to the Option by
delivering a written notice to Executive; provided, however, that the Company
may do so only if (i) the share price reported on the American Stock Exchange
for the Company's common stock on the date of such notice exceeds $2.50, and
(ii) Executive has not previously exercised and sold the Company Exercise Shares
pursuant to
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Section 3(e). Within five (5) days after his receipt of such written notice,
Executive shall promptly exercise and sell the number of Company Exercise Shares
set forth in the written notice by (i) sending notice and payment as required
under Section 9 of the Option Agreement and (ii) copying the Company on written
instructions to Executive's broker that it shall sell the number of Company
Exercise Shares set forth in the written notice no later than immediately on
receipt and distribute directly to the Company a check equal to (x) the gross
proceeds from the sale of such shares less (y) $2.50 multiplied by the number of
Company Exercise Shares set forth in the written notice.
(e) At any time prior to the date eighteen (18) months after the
Effective Date, Executive may exercise the Company Exercise Shares even if the
Company has not provided him written notice to do so under Section 3(d) if the
share price reported on the American Stock Exchange for the Company's common
stock on the date of such exercise exceeds $3.25. Executive may exercise the
Company Exercise Shares by (i) sending notice and payment as required under
Section 9 of the Option Agreement and (ii) copying the Company on written
instructions to Executive's broker that it shall sell the Company Exercise
Shares no later than immediately on receipt and distribute directly to the
Company a check equal to (x) the gross proceeds from the sale of such shares
less (y) $250,000.
(f) The Company recognizes that the exercise and corresponding
sale back to the Company contemplated under Sections 3(d) and (e) is a single
transaction and will report only the net amount Executive realizes from the
total transaction as ordinary income, i.e., the amount of ordinary income
reported will not exceed $1.07 per share ($2.50 sale price less $1.43 exercise
price).
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(g) Except as set forth in Section 3(d) or 3(e), Executive
covenants and agrees that he shall not exercise the Company Exercise Shares for
eighteen (18) months after the Effective Date. At 5:00 p.m. on the date eighteen
(18) months after the Effective Date, the Company's rights in the Company
Exercise Shares shall expire if Executive has not as of that date and time
received notice under Section 3(d) or exercised such Shares under Section 3(e),
and Executive shall thereafter have the right to exercise such Shares in his
sole discretion at any time prior to three years after the Effective Date, and
the Company shall have no right to any proceeds of the sale of any such Shares.
(h) The Company's interest in the Company Exercise Shares shall
not in any way limit Executive's right in his sole discretion to exercise up to
400,000 Shares at any time prior to three years after the Effective Date, and
the Company shall have no right to any of the proceeds of the sale of any such
Shares, even if exercised within the first eighteen months after the Effective
Date.
(i) Except when selling the Company Exercise Shares, Consultant
shall not on a single trading day sell any Shares in excess of the number of
Shares equal to 25% of the average daily trading volume of the Company's common
stock over the five trading days immediately preceding such sale.
(j) The Company hereby agrees and covenants that it will not take
any action, or omit to take any action, that could have the effect of canceling
or terminating the Option, including without limitation pursuant to any term,
provision or condition of the option plan pursuant to which the Option is
granted (including without limitation Section 8.3 of the XxxxxxXxxxx.Xxx 2000
Stock Option Plan), except as set forth in Section 4(c), Section 6(b) or Section
10(d) of this Agreement.
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4. General Release and Covenant Not to Xxx by Executive and the Company.
(a) Both parties acknowledge and agree that by carrying out the
terms of this Agreement, neither admits that any liability exists vis-a-vis the
other and both expressly deny same.
(b) Executive hereby releases, discharges, and covenants not to
xxx the Company, its predecessors, successors, parents, subsidiaries,
affiliates, divisions, assigns, employees, officers, directors, shareholders,
representatives, attorneys, and agents, collectively, separately, and severally
(the "Company and its Representatives"), from or for any and all state, local or
federal claims, causes of action, liabilities, debts, contracts, agreements,
damages, losses, costs, expenses, and judgments of every type and description
whatsoever, known and unknown (including, but not limited to, claims arising
under the Civil Rights Act of 1964, as amended; 42 U.S.C. ss. 1981; the
Rehabilitation Act of 1973, as amended; the Employee Retirement Income Security
Act of 1974, as amended; the Fair Labor Standards Act of 1938, as amended; and
the Americans with Disabilities Act; and claims of breach of contract, breach of
covenant of good faith and fair dealing and wrongful termination of employment;
and claims for bonus, benefits, reinstatement or attorneys' fees;)
(collectively, "Claims") which he, his heirs, administrators, executors,
personal representatives, beneficiaries, agents, and assigns, collectively,
separately or severally ("Executive and his Representatives"), has had, now has
or may have or claim to have against the Company and its Representatives.
Executive represents and warrants that neither he nor any of his Representatives
has filed any complaint or commenced any action against the Company or its
Representatives or assigned any Claims to any other individual or entity.
(c) If a court has reached a final determination that Executive or
his Representatives have breached this Agreement by filing a lawsuit, action or
claim against the Company or its
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Representatives asserting any of the Claims released herein, (i) Executive will
hold the Company harmless and reimburse the Company for the full amount of any
and all expenses, including any costs and attorneys' fees, associated with
defending such action, and (ii) the Company shall be entitled to stop paying
Executive under Section 2, recoup from Executive all amounts paid under Section
2, and cancel any unexercised potion of the Option.
(d) The Company and its Representatives hereby release, discharge,
and covenant not to xxx Executive and his Representatives from or for any and
all Claims which the Company and its Representatives has had, now has or may
have or claim to have against Executive and his Representatives. The Company
represents and warrants that neither it nor any of its Representatives has filed
any complaint or commenced any action against Executive or his Representatives
or assigned any Claims to any other individual or entity.
(e) If a court has reached a final determination that the Company
or its Representatives have breached this Agreement by filing a lawsuit, action
or claim against Executive or his Representatives asserting any of the Claims
released herein, the Company will hold Executive harmless and reimburse
Executive for the full amount of any and all expenses, including any costs and
attorneys' fees, associated with defending such action.
5. Survival of Executive's Indemnification Rights.
Executive's rights to indemnification by the Company under the
Company's bylaws and Section 8 of the Employment Agreement are not released by
this Agreement and shall remain in full force and effect.
6. Survival of Certain of the Company's Rights under the Employment
Agreement.
(a) Executive hereby agrees that the Trade Secrets, Trade Name,
Confidential Information, Nonsolicitation of Customers and Vendors,
Nonsolicitation of Employees and
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Reasonable and Necessary Restrictions provisions contained in Section 7 of the
Employment Agreement shall remain in full force and effect in accordance with
their terms. Solely for the purpose of determining the "Nonsolicitation Period"
applicable to the Nonsolicitation of Customers and Vendors, and Nonsolicitation
of Employees provisions contained in Section 7 of the Employment Agreement,
Executive shall be deemed to have terminated his employment for any reason other
than for "Good Reason" (as defined in the Employment Agreement), and thus, the
Nonsolicitation Period shall continue for two years following the Termination
Date. For the purpose of interpreting the provisions of Section 7 of the
Employment Agreement, the definition of "Business" shall include the acquisition
of or substantial investment in technology or internet companies for the purpose
of enhancing the value of such companies.
(b) If a court has reached a final determination that Executive
has breached the Trade Secrets, Trade Name, Confidential Information,
Nonsolicitation of Customers and Vendors, or Nonsolicitation of Employees
provisions contained in Section 7 of the Employment Agreement, the Company shall
be entitled to stop paying Executive under Section 2 and cancel any unexercised
potion of the Option.
7. Termination of Remainder of Employment Agreement.
The Company and Executive agree that, except as otherwise set forth in
Sections 5 and 6 of this Agreement, the Employment Agreement and any amendments
thereto are hereby terminated and of no further force and effect.
8. Return of Materials.
Within ten days after the Effective Date, Executive shall return to the
Company (a) all documents (and copies thereof), including but not limited to
notes and recordings, in his possession pertaining to the Company's, its
subsidiaries' or affiliates' Trade Secrets or
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Confidential Information, as those terms are defined in the Employment Agreement
and (b) all other property furnished to him by the Company, including but not
limited to office equipment (including his laptop computer), corporate credit
cards, business cards, keys, software, and computer disks.
9. Press Release.
The Company shall issue a press release in the form attached to this
Agreement as Exhibit A (the "Press Release") within five days after the
Effective Date.
10. Mutual Non-Disparagement; Company Reference.
(a) Except as otherwise required by law as set forth below,
Executive, on behalf of himself and his Representatives, hereby agrees and
covenants (i) that he and his Representatives shall not make any material
statement, written or verbal, in the media or otherwise (including but not
limited to such statements to the Company's outside directors, employees,
investors or shareholders, the American Stock Exchange, or the Securities and
Exchange Commission), or encourage such statements by any other person, in
disparagement of the Company or its Representatives, including but not limited
to negative references to the Company's products, services, corporate policy or
management, or statements concerning areas about which he disagrees with recent
management decisions or risks assumed by the Company, and (ii) not to provide
assistance to individuals or entities, other than the Company, in pursuing
claims, causes of action or other matters adverse to the Company and its
Representatives. In addition, Executive represents and warrants that since the
Termination Date he has not made any material statement to anyone outside the
Company, written or verbal, in the media or otherwise, and has not encouraged
such statements by any other person, in disparagement of the Company or its
Representatives.
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If Executive has a good faith belief (upon advice of counsel) that
providing information or assistance otherwise in violation of this Section 10(a)
is required by law, Executive shall notify the Company in writing of such
request by certified mail within five days after receiving a request for such
information or assistance, unless Executive has a good faith belief (upon advice
of counsel) that such notice is prohibited by law. Executive shall make
reasonable efforts to delay providing such information or assistance until after
he has notified the Company in writing of the request and has given the Company
at least seven days to raise its objections with the individual, entity or
tribunal making such request of Executive. Nothing in this Section 10(a) shall
be interpreted to require Executive at any time to disobey a subpoena or court
or agency order.
(b) Except as otherwise required by law as set forth below, the
Company, on behalf of itself and its Representatives, hereby agrees and
covenants (i) that the Company and its directors, officers and managers shall
not make any material statement, written or verbal, in the media or otherwise,
or encourage such statements by any other person, in disparagement of Executive,
including but not limited to negative references to Executive's job performance,
abilities, qualifications or character, and (ii) not to provide assistance to
individuals or entities in pursuing claims, causes of action or other matters
adverse to the Executive and his Representatives. In addition, the Company
represents and warrants that since the Termination Date it has not made any
material statement to anyone outside the Company, written or verbal, in the
media or otherwise, and has not encouraged such statements by any other person,
in disparagement of Executive.
If the Company has a good faith belief (upon advice of counsel) that
providing information or assistance otherwise in violation of this Section 10(b)
is required by law, the
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Company shall notify Executive in writing of such request by certified mail
within five days after receiving a request for such information or assistance,
unless the Company has a good faith belief (upon advice of counsel) that such
notice is prohibited by law. The Company shall make reasonable efforts to delay
providing such information or assistance until after it has notified Executive
in writing of the request and has given Executive at least seven days to raise
his objections with the individual, entity or tribunal making such request of
the Company. Nothing in this Section 10(b) shall be interpreted to require the
Company at any time to disobey a subpoena or court or agency order.
(c) If contacted for an employment reference regarding Executive,
the Company shall provide the prospective employer with a copy of the Press
Release in addition to confirming Executive's dates of employment, positions,
and compensation information.
(d) If a court has reached a final determination that Executive or
his Representatives violated Section 10(a) and that such violation has caused
identifiable monetary damage to the Company, the Company shall be entitled to
stop paying Executive under Section 2, recoup from Executive all amounts paid
under Section 2, and cancel any unexercised portion of the Option.
11. Future Cooperation.
For a period of two years after the Effective Date, Executive shall
provide reasonable assistance to the Company in any pending or future litigation
in which the Company is a party by providing the Company with factual
information known to Executive that is relevant to the litigation, and by
agreeing to appear for deposition on behalf of the Company without the necessity
of a subpoena; provided, however, that Executive shall not be required to
provide any such assistance if, upon advice of counsel, he has a good faith
belief that his own interests may be adverse to the Company's interests in such
litigation. Executive shall be obligated to provide
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such assistance or testimony (absent a subpoena) only on dates and at times and
places acceptable to him in his reasonable discretion. The Company shall
reimburse Executive for all reasonable travel and incidental expenses incurred
in providing such assistance and approved by the Company in advance in writing;
provided, however, that Executive shall not be entitled to reimbursement or
compensation for his time.
12. Attorneys' Fees, Costs and Expenses.
If any action at law or in equity is necessary to enforce or interpret
the terms of this Agreement, the prevailing party will be entitled to reasonable
attorneys' fees, costs and necessary disbursements in addition to any other
relief to which such party may be entitled.
13. No Coercion, Understanding, Consultation with Attorney.
Executive acknowledges, represents and warrants that (a) he has been
advised to and has had an opportunity to consult with an attorney prior to
deciding whether to enter into this Agreement, and (b) he is entering into this
Agreement knowingly and voluntarily with full understanding of the nature and
effect of this Agreement and not as a result of duress or influence by the
Company or any other person or mistake of law or fact. The Company acknowledges,
represents and warrants that (a) it has been advised to and has had an
opportunity to consult with an attorney prior to deciding whether to enter into
this Agreement, and (b) it is entering into this Agreement knowingly and
voluntarily with full understanding of the nature and effect of this Agreement
and not as a result of duress or influence by Executive or any other person or
mistake of law or fact.
14. Notices.
Any notice under this Agreement shall not be effective unless provided
to the other party and its counsel in writing and sent via certified mail,
overnight courier service (with proof of
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delivery), or facsimile (with confirmation of receipt) and addressed to the
appropriate party and its counsel at the addresses set forth below, or sent to
the facsimile numbers of the appropriate party and its counsel set forth below,
or at such other addresses, or facsimile numbers, as the party shall designate
from time to time in a like written notice. Notice shall be effective three (3)
days after it is sent by certified mail, on the date actually received if sent
by overnight courier service, which date shall be determined by such courier
service's confirmation of receipt, or upon receipt if sent by facsimile, which
date shall be determined by the facsimile confirmation. The addresses and
facsimile numbers for each party and its counsel, if any, are:
if to Executive: if to Company:
C. Xxxx Xxxxxxxx eResource Capital Group, Inc.
000 Xxxx Xxxxxxxxxxx Xxxxx Attention: Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000 0000 Xxxxxxxx Xxxx
Facsimile: 000-000-0000 Xxxxx 000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Facsimile: (000) 000-0000
with copies to his counsel: with copies to its counsel
King & Spalding Xxxxxx & Xxxxxx
Attn: Xxxxx X. Xxxxx and Attn: Xxxxx Xxxxxxxxx
Xxxxxxx X. Xxxxx Suite 2700 International Tower
000 Xxxxxxxxx Xxxxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000 000 Xxxxxxxxx Xxxxxx, X.X.
Facsimile: (000) 000-0000 Xxxxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
15. Applicable Law.
This Agreement has been entered into in and shall be governed by and
construed under the laws of the State of Georgia without reference to the choice
of law principles thereof.
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16. Modification; Severability.
If fulfillment of any provision of this Agreement or the provisions of
other agreements expressly incorporated herein, at the time such fulfillment
shall be due, shall transcend the limit of validity prescribed by law, then the
obligation to be fulfilled shall be reduced or modified to the limit of such
validity; and if any clause or provision contained in this Agreement operates or
would operate to invalidate any portion thereof in whole or in part, then such
clause or provision only shall be held ineffective as though not herein
contained, and the remainder of the Agreement shall remain in full force and
effect.
17. Entire Agreement; Miscellaneous.
Executive and the Company acknowledge and agree that they are not
relying on any representations, oral or written, other than those expressly
contained in this Agreement. This Agreement and the provisions of other
agreements expressly incorporated herein supersede all prior agreements,
proposals, negotiations, conversations, discussions and course of dealing
between the parties with respect to the subject matter hereof. Section headings
are for convenience of reference only and are not intended to create substantive
rights or obligations. This Agreement may be executed in counterparts (whether
by facsimile or otherwise), each of which shall be deemed an original, and
together shall constitute one and the same Agreement.
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18. No Exclusive Remedies.
The remedies provided under this Agreement are not exclusive but are in
addition to any and all other remedies at law, in equity or otherwise.
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Xxxx Xxxxxxxx, Executive Date
Sworn to and subscribed before me this ___________ day of ___, 2000.
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Notary Public
My Commission Expires:
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eResource Capital Group, Inc.
By:
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Xxxxxxx Xxxxxx, Date
Chief Executive Officer
Sworn to and subscribed before me this ___________ day of ___, 2000.
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Notary Public
My Commission Expires:
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