Exhibit 10.27.4
EUROTECH, LTD.
CONSULTING AGREEMENT
This Consulting Agreement (the "Agreement"), dated this 28th day of February,
2002, by and between Eurotech, Ltd., a District of Columbia corporation (the
"Company") and Verdi Consultants, Inc., a Rhode Island corporation (the
"Consultant").
WHEREAS, the Company desires that the Consultant perform certain
consulting services as specified herein; and
WHEREAS, the Consultant wishes to accept to perform such services.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants, terms and conditions as hereinafter set forth, the Company and the
Consultant, intending to be legally bound, hereto agree as follows:
1. APPOINTMENT. The Company hereby engages the Consultant to provide the
Company with consulting services with regard to the business of the
Company on an "as needed" basis. The Consultant hereby accepts the
appointment as consultant on the terms and conditions hereinafter set
forth. In fulfilling its obligations to the Company hereunder, the
Consultant shall exclusively provide the Company with the services of
Xx. Xxxx X. Xxxxx ("Xxxxx"). The Consultant, and in particular Verdi,
shall follow and abide by all policies, rules and regulations
established by the Board of Directors of the Company from time to time
and shall report to the Chief Executive Officer of the Company.
2. TERM. The initial term of this Agreement shall commence on February 1,
2002 (the "Commencement Date") and shall terminate on the earlier of
January 31, 2005 at 11:59 p.m. New York City time or the death or
disability of the Consultant, unless earlier terminated ("Term").
3. COMPENSATION.
(a) FEE. For all services provided by the Consultant under this
Agreement, the Company shall pay the Consultant US$15,000 per
month for the duration of the Term (the "Consulting Fee"). The
Consulting Fee shall be payable by the Company to the
Consultant in semi-monthly installments on the first and
fifteenth day of each month.
(b) OPTIONS. Contemporaneously with the execution of this
Agreement, or as soon thereafter as practicable, the Company
shall issue to the Consultant a non-qualified stock option
grant to purchase One Million (1,000,000) shares of the common
stock of the Company, par value $.00025 per share (the "Common
Stock"), pursuant to the terms and conditions of a stock
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option agreement dated contemporaneously herewith, which, when
signed by the parties hereto, shall be incorporated herein by
reference (the "Grant").
(c) Automobile Allowance. In addition to the foregoing and any
other amounts due to the Consultant hereunder, the Company
shall pay to the Consultant, or to such other party as the
Consultant may direct in writing, $750 per month for the
duration of this Agreement as an automobile allowance.
4. ADDITIONAL CONDITIONS SUBSEQUENT OF ENGAGEMENT. As conditions
subsequent to the Consultant's engagement hereunder, the following
events shall occur. Notwithstanding the provisions of Section 7(e), if
any of the following conditions subsequent do not occur within thirty
days after the date required, the Consultant may terminate this
Agreement and, in such case, shall receive the entire Severance Payment
pursuant to the terms of Section 7(c).
(a) Nomination as Vice Chairman. The Company shall nominate Xxxx
Xxxxx to serve as the Vice Chairman of the Board of Directors
following the Consultant's resignation as Chairman, effective
as of February 1, 2002 or as soon thereafter as practical.
(b) Initial Nomination for Board of Directors. The Company shall
nominate and endorse Xxxx Xxxxx for membership on the
Company's Board of Directors at the annual meeting of the
Shareholders of the Company to be held in March 2002, or any
duly authorized postponement thereof. The Company shall take
all reasonable efforts to effectuate the elections of Xxxx
Xxxxx to the Board of Directors during the Term.
(c) Directors and Officers Insurance. At all times during the Term
and any extensions thereto, the Company shall maintain
directors and officers liability insurance ("D&O Insurance")
for the benefit of the Consultant and other Directors and
Officers of the Company in an aggregate amount not less than
Ten Million dollars ($10,000,000) or such other amount agreed
upon by the Consultant. The Company shall immediately notify
the Consultant of any lapse in the D&O Insurance.
(d) Material Breach. This Agreement shall not be breached
materially by the Company.
(e) Rhode Island Office. The Company shall maintain its current
office in Providence, Rhode Island, or an office in such other
location as reasonably determined necessary by the Consultant,
at which the Consultant may provide services hereunder, in
addition to the other offices of the Company.
(f) Legal Fees of the Consultant. In addition to any expenses
incurred by the Consultant in accordance with Section 5 hereof
and in addition to any other indemnification to which the
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Consultant might otherwise be entitled, the Company shall pay
for personal legal services of the Consultant up to an
aggregate of $5,000 related to the review by Consultant's
counsel of the terms and conditions of this Agreement and all
matters related thereto. The payment shall be made to the
Consultant (or its counsel) upon execution of this Agreement.
5. EXPENSES. In addition to the Consulting Fee, the Consultant shall be
reimbursed for any reasonable business expenses incurred by the
Consultant in connection with the services provided pursuant to this
Agreement. The Company shall reimburse the Consultant for all such
approved expenses within thirty (30) days of the presentation by the
Consultant of an itemized account of such expenditures.
6. BEST EFFORTS OF THE CONSULTANT. The Consultant shall ensure that Verdi
devotes such time as the Consultant may deem reasonably necessary to
fulfill the duties and responsibilities herein. The Company and the
Consultant acknowledge that the Consultant and Verdi are engaged in
other business and consulting endeavors and, as a result, the time
commitment of the Consultant and Verdi is limited and requires
flexibility. The Consultant, and in particular Verdi, shall not engage
in any activities that involve a conflict of interest with the business
of the Company during the Term and any extensions thereto. The
Consultant shall ensure that Verdi, at all times, faithfully with
diligence and to the best of its ability, experience and talents,
perform all duties required of and from it pursuant to the terms
hereof, to the reasonable satisfaction of the Company and its Board of
Directors.
7. TERMINATION.
(a) By action of its Board of Directors, the Company may terminate
this Agreement for cause at any time upon delivery by hand,
overnight courier or certified, return-receipt U.S. Mail of
sixty (60) days written notice to the Consultant of the
termination and the reasons therefor. Such notice having been
given, this Agreement shall terminate in accordance herewith.
For the purpose of this Section 10, "cause" shall be defined
as (i) the Consultant's continued failure to perform its
duties and responsibilities in good faith to the best of its
abilities after thirty (30) days prior written notice of
non-performance from the Company; (ii) conviction of a felony
by the Consultant; (iii) fraudulent misconduct by the
Consultant; (iv) embezzlement, misappropriation or theft by
the Consultant; (v) material breach of confidentiality
agreements by the Consultant; (vi) gross misconduct by the
Consultant; (vii) any willful or grossly negligent act by the
Consultant that has a material detrimental effect on the
Company's reputation or business; or (viii) any material
violation of the terms and conditions of this Agreement by the
Consultant.
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Within ten (10) days after the date of delivery of notice of
such termination for cause, the Consultant may respond in
writing to the notice of termination for cause, setting forth
any basis for its objection to the termination. The Board of
Directors or the Chairman of the Company shall, within ten
(10) days after the receipt of such written response, evaluate
the response of the Consultant and determine to either rescind
or affirm the termination notice. The Consultant shall be
notified in writing by hand delivery, overnight courier or
certified, return-receipt U.S. Mail, of such determination of
the Company, upon which delivery, such determination shall be
final. In the event that the termination for cause is
affirmed, this Agreement and the engagement of the Consultant
shall terminate immediately. Except as set forth in Section
7(b), if the Consultant is terminated for cause, the
Consultant shall not be eligible for any severance payment.
(b) If this Agreement is terminated by the Company with "cause",
the Consultant or its successor in interest, as the case may
be, shall be paid by the Company, in full satisfaction of all
of its fee obligations under this Agreement, an amount equal
to the Consulting Fee due to the Consultant to which it was
entitled on the last day of its engagement.
(c) In addition to any payments due the Consultant under this
Section 7, if this Agreement is terminated by the Company
without "cause", the Consultant shall be paid an additional
sum equal to $180,000 (the "Severance Payment"). The Severance
Payment shall be paid to the Consultant within ten (10) days
from the last day of the engagement. If the Severance Payment
is not paid within such ten-day period, the Company shall
reimburse the Consultant for any costs or expenses incurred by
it for the collection of the Severance Payment, including,
without limitation, any attorneys fees incurred by the
Consultant, including the deposit of a reasonable retainer to
the Consultant's legal counsel, which attorneys fees shall be
paid as they are incurred.
(d) Any payment made by the Company pursuant to Section 7(b) or
any Severance Payment made by the Company pursuant to Section
7(c) above (i) will be subject to offset for any advances,
amount receivable, and loans, including accrued interest,
outstanding on the date of the termination of this Agreement;
but (ii) will not be subject to any offset on account of any
remuneration paid or payable to the Consultant for any
subsequent engagement the Consultant may obtain, whether
during or after the period during which the payment is made,
and the Consultant shall have no obligation whatever to seek
any subsequent engagement.
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(e) The Consultant may terminate this Agreement with or without
cause by providing sixty (60) days written notice to the
Company. In such event, the Consultant shall receive all fees
due to the Consultant up to the date of termination. In the
event of such voluntary termination, or in the event that
Consultant terminates as a result of the death or disability
of Consultant, no fees will be provided for the period after
the date of termination, except as provided in Section 4
above.
(f) If this Agreement is terminated either by the Company or by
the Consultant, either with or without cause, the Consultant
shall participate in an exit interview conducted by the
Company's representative for the purposes of finalizing any
remaining matters, returning all relevant property and
information to the Company, and assuring a proper transition
of duties.
(g) Except as provided otherwise in this Section 7, the Company
and the Consultant shall not have any further right or remedy
against one another in the event this Agreement is terminated.
After termination of this Agreement pursuant to Sections 4 or
7(a), (b) or (e), or upon the expiration of the Term any
extension thereof, the provisions of Sections 9 (Disclosure of
Information), 10 (Inventions or Discoveries), 12 (Covenants
Not to Compete), and 13 (Injunctive Relief) hereof shall
remain in full force and effect.
8. RELATIONSHIP BETWEEN THE PARTIES. The Consultant is retained by the
Company only for the purpose and to the extent set forth in this
Agreement, and the Consultant's relationship to the Company during the
term of this Agreement shall be that of an independent contractor.
Neither the Consultant, nor any of its agents or affiliates shall have
employee status with the Company, be entitled to participate in any
medical, disability, pension or any other plan or benefit provided by
the Company to its employees or be covered by the Company in any
Unemployment Insurance or Workmen's Compensation Act of any state.
Nothing herein contained shall be construed to regard the parties as
being partners or joint venturers, or to constitute an arrangement
herein provided for as a partnership or joint venture. The Consultant
acknowledges that it is solely responsible for the payment of all
taxes, income or other, due and payable by reason of its engagement as
an independent contractor by the Company.
9. DISCLOSURE OF INFORMATION. In the course of providing consulting
services pursuant to this Agreement, the Consultant, and in particular
Verdi, shall work with and be exposed to the business and operations of
the Company. The Consultant recognizes and acknowledges that the
Company's trade secrets, confidential information, proprietary
information and processes, including but not limited to actual or
potential products or services and the business model associated
therewith, are valuable, special and unique assets of the Company's
business, access to and knowledge of which are essential to the
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performance of the Consultant's duties hereunder. The Consultant will
not, and will ensure that Verdi will not, during or after the Term, in
whole or in part, disclose such secrets, information or processes to
any person, firm, corporation, association or other entity for any
reason or purpose whatsoever, nor shall the Consultant or Verdi make
use of any such property for its own purposes or for the benefit of any
person, firm, corporation or other entity (except the Company) under
any circumstances during or after the Term and any extensions thereto,
provided that after the Term and any extensions thereto these
restrictions shall not apply to such secrets, information and processes
which are then in the public domain (provided that the Consultant was
not responsible, directly or indirectly, for such secrets, information
or processes entering the public domain without the Company's consent).
The Consultant shall consider and treat as the Company's property, all
computer disks, memoranda, books, papers, lab reports, notes, letters,
formulas, schematics, reports, customer lists, financial statements and
budgets and all other data, and all copies thereof and therefrom, in
any way relating to the Company's business and affairs, whether created
by it or otherwise coming into its possession, and on termination of
its appointment, or on demand of the Company, at any time, to deliver
all embodiments of the confidential information (whether written, typed
or computer files) of the same to the Company.
10. INVENTIONS OR DISCOVERIES. The Consultant acknowledges that, while
performing consulting services for the Company, any and all inventions,
improvements, discoveries, processes, programs or systems relating to
the business of the Company developed or discovered by the Consultant
shall be fully disclosed by it to the Company and shall be the sole and
absolute property of the Company. For the purpose of this Section 10,
the meaning of the phrase "inventions, improvements, discoveries,
processes, programs or systems relating to the business of the Company"
shall be limited to inventions, improvements, discoveries, processes,
programs or systems which result in modifications or enhancements of,
or can be used in connection with or in lieu of, services or products
then offered commercially by the Company, or which are the subject of
patents held or applied for by the Company, or which are under active
funded development by the Company during the Term and any extensions
thereto or at the date of the expiration or termination of this
Agreement. For the purpose of this Section 10, the meaning of the
phrase "under active funded development of the Company" shall be
limited to services or products which the Company has developed or is
in the process of developing and for which the Company has accounted
for the expenses of such development in accordance with generally
accepted accounting principles. The Consultant acknowledges that upon
the request of the Company, the Consultant shall execute, acknowledge
and deliver, and shall cause Verdi to execute, acknowledge and deliver,
such assignments, certificates or other documents as the Company may
consider necessary or appropriate to properly vest all right, title and
interest to any such invention or discovery in the Company. Any such
invention or discovery by the Consultant within three years of the
termination or expiration of this Agreement shall fall within the
provisions of this Section unless proved conclusively by the Consultant
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to have been first invented or discovered by it following such
termination or expiration. The provisions of this Section shall survive
the expiration of this Agreement or its termination by either the
Company or the Consultant and shall remain in full force and effect.
11. COVENANT NOT TO COMPETE. For the term of this Agreement, and for a
period of one year after the expiration of this Agreement or its
termination by the Company or the Consultant, the Consultant shall not,
and the Consultant shall ensure that Verdi does not, either directly or
indirectly, own, manage, operate, control, be employed by, participate
in, assist in the recruitment of employees for, or be connected in any
manner with the ownership, management, operation or control of any
business entity involving technology, processes, programs or systems
which are being sold or marketed, or are under active funded
development, by the Company during the term of this Agreement or at the
time of the expiration or termination of this Agreement within the
states of New York, New Jersey or Connecticut or in any other state or
territory in which the Company shall operate.
12. INJUNCTIVE RELIEF. In the event of an actual or threatened breach by
the Consultant of the provisions of this Section or Sections 9, 10 or
11, the Company shall be entitled to an injunction restraining the
Consultant's and Verdi's actions. Nothing herein shall be construed as
prohibiting the Company from pursuing any other remedy available to the
Company for such breach or threatened breach including, but not limited
to, the recovery of damages from the Consultant. The Consultant
acknowledges the necessity for and reasonableness of these provisions.
13. NOTICES. Unless provided otherwise herein, all notices, demands,
elections, opinions or requests (however characterized or described)
required or authorized by this Agreement shall be deemed sufficiently
given if in writing and sent by registered or certified mail, return
receipt requested and postage prepaid, or by tested telex, telegram or
cable to, in the case of the Company:
Eurotech, Ltd.
00000 Xxxxx Xxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
with a copy to:
Xxxxxx X. Xxxxxxx, Esq.
Solomon Xxxxx Xxxx Xxxxxxx & Xxxxx LLP
00 Xxxx Xxxxxx-00xx Xxxxx
Xxx Xxxx, X.X. 00000
and in the case of the Consultant:
Verdi Consultants, Inc.
000 Xxxxxxxx Xxxxx
Xxxx Xxxxxxxxx, Xxxxx Xxxxxx 00000
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14. ASSIGNMENT OF AGREEMENT. No party to this Agreement may assign
or otherwise transfer this Agreement or any of its rights or
obligations hereunder without the prior written consent to
such assignment or transfer by the other party hereto. Any
attempted assignment without written consent by the
non-assigning party shall be void and without force or effect
at the option of the latter. All the provisions of this
Agreement shall be binding upon the respective employees,
delegatees, successors, heirs and permitted assignees of the
parties.
15. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. This Agreement
and the representations, warranties, covenants and other agreements
(however characterized or described) by both parties hereto and
contained herein or made pursuant to the provisions hereof shall
survive the execution and delivery of this Agreement and any inspection
or investigation made at any time with respect to any aspect thereof
until any and all monies, payments, obligations and liabilities which
either party hereto shall have made, incurred or become liable for
pursuant to the terms of this Agreement shall have been paid in full.
The confidentiality, inventions and non-compete provisions contained in
Sections 5, 7(c), 9, 10 and 11 shall remain in full force and effect
regardless of any termination or cancellation of this Agreement for a
period of not less than one year from the date of any termination or
cancellation of this Agreement.
16. FURTHER INSTRUMENTS. The parties hereto shall execute and deliver any
and all other instruments and shall take any and all other actions as
may be reasonably necessary to carry the intent of this Agreement into
full force and effect.
17. SEVERABILITY. If any provision of this Agreement shall be held,
declared or pronounced void, voidable, invalid, unenforceable or
inoperative for any reason by any court of competent jurisdiction,
government authority or otherwise, such holding, declaration or
pronouncement shall not effect adversely any other provisions of this
Agreement, which shall otherwise remain in full force and effect and be
enforced in accordance with its terms and the effect of such holding,
declaration or pronouncement shall be limited to the territory or
jurisdiction in which made.
18. WAIVER. All the rights and remedies of either party under this
Agreement are cumulative and not exclusive of any other rights and
remedies provided by law. No delay or failure on the part of either
party in the exercise of any right or remedy arising from a breach of
this Agreement shall operate as a waiver of any subsequent right or
remedy arising from a subsequent breach of this Agreement. The consent
of any party where required hereunder to any act or occurrence shall
not be deemed to be a consent to any other act or occurrence.
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19. GENERAL PROVISIONS. This Agreement shall be construed and enforced in
accordance with, and governed by, the laws of the State of New York.
This Agreement embodies the entire agreement and understanding between
the parties and supersedes all prior agreements and understandings
relating to this subject matter, including any and all prior employment
or consulting agreements entered into between the Consultant and the
Company, which are, as of the date hereof, deemed terminated and
released. This Agreement may not be modified or amended or any term or
provision hereof waived or discharged except in writing signed by the
party against whom such amendment, modification, waiver or discharge is
sought to be enforced. The headings of this Agreement are for
convenience in reference only and shall not limit or otherwise affect
the meaning thereof. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original but all of
which taken together shall constitute one and the same instrument.
20. ARBITRATION. Any and all disputes arising out of this Agreement will be
determined by submission to binding arbitration before a three-member
arbitral panel, which arbitration shall be conducted in New York, New
York, or Providence, Rhode Island, pursuant to the Rules of Arbitration
of the American Arbitration Association, the jurisdiction to which all
parties hereto, as well as their successors, assigns and transferees,
hereby consent. The Company shall pay all costs and fees relating to
such arbitration, including the reasonable attorneys fees and costs of
the Consultant, including the deposit of a reasonable retainer to the
Consultant's legal counsel, which attorney fees shall be paid by the
Company when they are incurred, unless an award is made in favor of the
Company, in which case the Consultant shall immediately reimburse the
Company for all costs and fees paid by the Company on the Consultant's
behalf, including, without limitation, the attorneys fees and costs of
the Consulatant, one-half of the cost of commencing the arbitration,
and one-half of the costs and fees of the three-member arbitral panel.
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CONSULTANT ACKNOWLEDGES THAT, BEFORE SIGNING THIS AGREEMENT, IT WAS GIVEN AN
OPPORTUNITY TO READ IT, EVALUATE IT AND WAS ENCOURAGED BY THE COMPANY TO DISCUSS
IT WITH ITS ADVISORS AND ATTORNEYS AND WITH REPRESENTATIVES OF THE COMPANY.
CONSULTANT ACKNOWLEDGES THAT IT FULLY UNDERSTANDS ALL TERMS, CONDITIONS AND
IMPLICATIONS OF THIS AGREEMENT. IN LIGHT OF THE FOREGOING ACKNOWLEDGEMENT, IT IS
FURTHER UNDERSTOOD THAT TO THE EXTENT THAT THERE MAY BE ANY AMBIGUITIES IN ANY
PROVISION HEREIN THAT MIGHT HAVE TWO OR MORE PLAUSABLE CONSTRUCTIONS, THE
LANGUAGE OF THE AGREEMENT SHALL NOT BE CONSTRUED AGAINST EITHER PARTY HERETO.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
Eurotech, Ltd.
By: /S/ XXX X. XXXXXXXXX
--------------------
Xxx X. Xxxxxxxxx
President and Chief Executive Officer
Verdi Consultants, Inc.
/S/ XXXX X. XXXXX
-----------------
By: Xxxx X. Xxxxx
Its: _________________
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