CONSULTING AGREEMENT
This
Consulting Agreement ("Agreement")
is
made as of September 1, 2006, by and between FP Technology, Inc., a Delaware
corporation ("Client"),
and
Trident Growth Fund, L.P. ("Consultant").
1. Engagement
of the Consultant.
1.1. Client
hereby engages Consultant to study and evaluate Client and its business
prospects, assist in developing marketing materials, advise and assist Client
with regard to possible Transactions and such other services as may be agreed
between Client and Consultant from time to time. For purposes of this Agreement,
"Transaction"
shall
mean, individually and collectively,
(i)
any private placement of any securities of Client (including debt, equity
or any
derivative or convertible securities) (each, a "Private
Placement"),
(ii)
any debt financing of Client from a bank, institutional investor or any other
person or entity (including any term or revolving credit facility, any senior,
mezzanine or subordinated debt and any secured or unsecured loan) (each,
a
"Debt
Financing"),
and
(iii) possible strategic alternatives, including acquisition of entities
or
assets related or complimentary to the Company’s business. A Transaction as
contemplated in this agreement does not include any financing secured prior
to
the involvement of the Consultant.
1.2. Client
understands that no particular result is or can be guaranteed or promised
by
Consultant in rendering services requested by Client for any particular matter.
Consultant undertakes to render the services requested by Client and accepted
by
Consultant competently and with professional skill.
1.3. Client
will provide Consultant with such factual information and materials as
Consultant requires to perform its services. Consultant shall determine the
method, details and means of performing the services.
2. Term;
Termination.
2.1. The
term
of this Agreement shall commence on the date hereof and shall continue for
twelve months (the "Initial
Term").
The
Initial Term will automatically renew for additional six month periods unless
either party provides written notice to the other at least thirty days prior
to
the termination of the Initial Term or any renewal term (the period of time
during the Initial Term and such renewal terms, if any, shall be referred
to
herein as the "Term,"
unless
terminated earlier as hereinafter provided).
2.2. Termination.
Consultant may terminate this Agreement upon written notice to Client, with
or
without cause. Upon termination of the Agreement, any deferred or unpaid
portions of compensation or reimbursement of costs or expenses under
Section 3 shall become or, in the case of delinquent payments, remain due
and payable as described therein. Client's obligation to pay any fees or
other
consideration to Consultant under this Agreement shall survive the termination
of this Agreement. Client may terminate this Agreement with 30 days notice,
with
or without cause.
3. Compensation;
Reimbursement.
3.1. Monthly
Payments.
Client
shall pay Consultant $10,000 upon execution of this Agreement, and $2,000
per
month for the first six months during the Term, payable not later than the
5th
day of the month which shall be deducted from Transaction Fees received by
the
Consultant..
3.2. Options.
Client
shall issue Consultant options to purchase up to 1,000,000 shares of Client’s
Common Stock at an exercise price of $7.00. Such options are subject to the
terms of the form of the Option Agreement attached hereto as Exhibit
A.
3.3. Reimbursement.
Client
shall reimburse Consultant for its reasonable out-of-pocket expenses incurred
from time to time in connection with the services to be provided under this
Agreement (including without limitation, the reasonable fees and expenses
of
Consultant's legal counsel, if any, it being understood that retention of
any
such advisor will be made with the prior approval of Client, payable promptly
and in any case within thirty (30) days of receipt of an invoice thereof.
Any
expense in excess of $1,000 will require prior approval
of the Client.
3.4. Client
acknowledges that this compensation does not exceed prevailing rates for
comparable services by other organizations in Newton,
Massachusetts.
4. Indemnification;
Exculpation.
Recognizing that Consultant, in providing the services contemplated hereby,
will
be acting as representative of and relying on information provided by Client,
Client agrees to the provision of Exhibit
B
hereto.
Client shall use its best efforts to cause any binding agreements with acquirers
or providers of capital or financing to include exculpation and indemnification
provisions in favor of Consultant which are equivalent to the foregoing and
are
binding on such persons. The provisions of Exhibit
B
shall be
binding on the successors and assigns of the parties hereto and of the
Indemnified Persons, specifically including the continuing entity after any
Transaction and any successor thereto whether by subsequent merger,
consolidation or transfer of all or a substantial part of the assets or business
of Client or such continuing entity. Exhibit
B
shall
survive any termination of this Agreement or the services contemplated
hereunder.
5. Confidentiality.
Client
agrees that any advice, written or oral, provided by Consultant pursuant
to this
Agreement will be treated by Client as confidential, will be solely for the
information and assistance of Client in connection with its consideration
of a
Transaction and will not be used, circulated, quoted or otherwise referred
to
for any other purpose, nor will it be filed with, included in or referred
to, in
whole or in part, in any registration statement, proxy statement or any other
communication, whether written or oral, prepared, issued or transmitted by
Client or any affiliate, director, officer, employee, agent or representative
of
any thereof, without, in each instance, Consultant's prior written consent.
Further, in connection with this engagement of Consultant, it is contemplated
that Client may supply to Consultant certain non-public or proprietary
information concerning Client ("Confidential
Information").
Client agrees to use its best efforts to appropriately xxxx all such information
which is delivered in written form. Consultant shall disclose Confidential
Information solely for the purposes of rendering services pursuant to and
in
accordance with this engagement; provided, however, that the foregoing shall
not
apply to any information which becomes publicly available other than as a
result
of the breach of Consultant's undertakings hereunder, or that which Consultant
is required to disclose by judicial or administrative process in connection
with
any action, suit, proceeding or claim.
6. Information
Furnished by Client.
Client
will furnish Consultant with all financial and other information and data
as
Consultant believes appropriate in connection with its activities on Client's
behalf, and shall provide Consultant full access to its officers, directors,
employees and professional advisors. Client agrees that it and its counsel
will
be solely responsible for ensuring that the Transaction complies in all respects
with the applicable law. Client represents and warrants that any material
delivered to Consultant at all times through the closing will not contain
any
untrue statement of material fact or omit to state any material fact required
to
be stated therein or necessary to make the statements contained therein,
in
light of the circumstances under which they were made, not misleading. Client
will promptly notify Consultant if it learns of any material inaccuracy or
misstatement in, or material omission from, any information theretofore
delivered to Consultant. Client recognizes and confirms that Consultant,
in
connection with performing its services hereunder, (i) will be relying
without investigation upon all information that is available from public
sources
or supplied to it by or on behalf of Client or its advisors, (ii) will not
in any respect be responsible for the accuracy or completeness of, or have
any
obligation to verify, the same, and (iii) will not conduct any appraisal of
any assets of Client. Client will also cause to be furnished to Consultant
at
the closing copies of such agreements, opinions, certificates and other
documents delivered at the closing as Consultant may reasonably request.
7. Conflicts.
Client
acknowledges that Consultant and its affiliates have and will continue to
have
other relationships with parties other than Client pursuant to which Consultant
may acquire information of interest to Client. Consultant shall have no
obligation to disclose such information to Client, or to use such information
in
connection with any contemplated transaction. Client recognizes that Consultant
is being engaged hereunder to provide the services described above only to
Client and to all other parties if any, who execute this Agreement in specified
other capacities and is not acting as an agent or a fiduciary of, and shall
have
no duties or liability to, the equity holders of Client or any third party
in
connection with its engagement hereunder, all of which are hereby expressly
waived. No one other than Client (and such other parties in such capacities,
if
any) is authorized to rely upon the engagement of Consultant hereunder or
any
statements, advice, opinions or conduct by Consultant.
8. Miscellaneous.
8.1. Notices.
All
notices or other communications required or permitted hereunder shall be
in
writing and shall be deemed given or delivered (a) when delivered
personally against written receipt, (b) if sent by registered or certified
mail, return receipt requested, postage prepaid, when received, (c) when
received by facsimile transmission if confirmed by the other means described
in
clause (a) or (b), and (d) when delivered by a nationally recognized
overnight courier service, prepaid, and shall be addressed as
follow:
If
to
Consultant:
Trident
Growth Fund, L.P.
000
Xxxxxx
Xxxxx
000
Xxxxxxx,
XX 00000
Facsimile:
000 000 0000
Attn:
Xxxxx St. Xxxxxx
If
to
Client:
000
Xxxxx
Xxxxxx
Xxxxxx,
XX 00000
Facsimile:
000 000 0000
Attn:
CEO
or
to
such other address as such party may indicate by a written notice delivered
to
the other party hereto.
8.2. Arbitration.
Any
dispute arising under, or relating to, this Agreement shall be resolved by
binding arbitration by one arbitrator pursuant to the Commercial Rules of
the
American Arbitration Association. Each party shall choose one arbitrator,
and
such two arbitrators shall select a third arbitrator, which third arbitrator
shall be the sole arbitrator of the dispute. The parties shall bear the costs
of
the arbitrator equally. The arbitration shall be held in Los Angeles County,
California under the then-prevailing rules of the Association.
8.3. Attorneys'
Fees.
If any
party to this Agreement brings an action or proceeding directly or indirectly
based upon this Agreement or the matters contemplated hereby against another
party, the prevailing party shall be entitled to recover, in addition to
any
other appropriate amounts, its reasonable costs and expenses in connection
with
such action or proceeding, including, but not limited to, reasonable attorneys'
fees and court costs.
8.4. Governing
Law.
It is
the intention of the parties that this Agreement shall be subject to and
shall
be governed by and construed in accordance with the internal laws of the
State
of Massachusetts without reference to its choice of law provisions.
8.5. Entire
Agreement.
This
Agreement and the exhibits attached hereto contain the entire agreement between
these parties with respect to the subject matter hereof and there are no
promises, covenants, or representations, which are not contained herein.
This
agreement supersedes and cancels all other prior agreements between the parties.
8.6. Amendment
and Modification.
No
change, waiver or modification of any of the terms of this Agreement shall
be
effective unless confirmed in writing and signed by Consultant. Consultant
has
not made any representations or promises to Client except as set forth in
this
Agreement. This Agreement may not be amended or modified except by a writing
executed by both of the parties hereto.
8.7. Binding
Effect.
This
Agreement, and any amendment thereto, shall be binding upon and shall inure
to
the benefit of the successors and assignees of the parties hereto and to
all
other persons with notice or knowledge hereof.
8.8. Relationship.
Nothing
in this Agreement shall be interpreted to provide that Consultant and Client
are
partners, joint venturers, agents or assignees of the other. Consultant is
and
shall remain an independent contractor providing services to Client, and
is not
an agent of Client, and neither party shall be entitled to bind the other
party
in any way.
8.9. Headings.
The
section headings herein are intended for reference and shall not by themselves
determine the construction or interpretation of this Agreement.
8.10. Severability.
Should a
court or other body of competent jurisdiction determine that any provision
in
this Agreement is invalid or unenforceable, the remaining provisions in this
Agreement nevertheless shall be deemed valid and enforceable, and continue
in
full force and effect without being impaired or invalidated in any
way.
8.11. Counterparts.
This
Agreement may be executed in one or more counterparts, all of which taken
together shall constitute one and the same Agreement.
8.12. Further
Assurances.
The
parties shall execute, acknowledge and deliver any further documents,
instruments, or other assurances and shall take any other action consistent
with
the terms of this Agreement that may be reasonably requested by any other
party
or its counsel for the purpose of confirming or effectuating any of the actions
contemplated by this Agreement.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement on the day
and
year first set forth above.
|
Consultant
Trident
Growth Fund, L.P..
By:
/s/ Xxxxx St. Xxxxxx
Its:
Principal
|
|
|
Client
By:/s/
Xxxxxxx Xxxxx
Its:
CFO
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EXHIBIT
B
INDEMNIFICATION
This
Exhibit B is a part of and is incorporated into the Agreement. Client agrees
to
indemnify and hold harmless Consultant and its affiliates and their respective
directors, officers, managers, attorneys, finders, agents, representatives,
advisors, stockholders, members, control persons and employees (each such
person
and entity being referred to as an "Indemnified
Person"),
to
the full extent lawful, from and against any losses, claims, damages, expenses
or liabilities or actions (including without limitation shareholder actions)
related to or arising out of this engagement or Consultant's role in connection
herewith, and will pay (or, if paid by an Indemnified Person, reimburse such
Indemnified Person) for all fees and expenses (including without limitation
counsel fees and charges for the time of Consultant professional employees
at
their then current hourly rates) incurred by such Indemnified Person in
connection with investigating, preparing or defending any such action or
claim,
whether or not in connection with pending or threatened litigation in which
any
Indemnified Person is a party.
Client
will not, however, be responsible for any claims, liabilities, losses, damages
or expenses which result from any compromise or settlement not approved by
Client or which are determined by a final judgment of a court or arbitrator
of
competent jurisdiction to have resulted solely from the fraud, willful
misconduct or gross negligence of any Indemnified Person. Client also agrees
that no Indemnified Person shall have any liability to Client for or in
connection with this engagement, except for any such liability for losses,
claims, damages, liabilities or expenses incurred by Client, which are
determined to have resulted from the fraud, willful misconduct or gross
negligence of the Indemnified Person. The foregoing agreement shall be in
addition to any rights that any Indemnified Person may have at common law
or
otherwise, including without limitation any right to contribution.
Client's
agreement to indemnify Consultant and other Indemnified Persons pursuant
to this
Exhibit
B
shall
not be disclosed publicly or made available to third parties by either party
hereto without the other party's prior written consent. If any action or
proceeding is brought against any Indemnified Person in respect of which
indemnity may be sought against Client pursuant hereto, or if any Indemnified
Person receives notice from any potential litigant of a claim which such
person
reasonably believes will result in the commencement of any such action,
proceeding, or claim, such Indemnified Person shall promptly notify Client
in
writing of the commencement of such action or proceeding, or of the existence
of
any such claim, but the failure so to notify Client of any such action or
proceeding shall not relieve Client from any other obligation or liability
which
it may have to any Indemnified Person otherwise than under this Agreement
or
with respect to any other action or proceeding. In case any such action or
proceeding shall be brought against any Indemnified Person with respect to
which
such Indemnified Person gives notice of its intention to seek indemnification
hereunder, Client shall be entitled to participate in such action or proceeding
and, to the extent that Client may determine, to assume the defense thereof,
with counsel of Client's choice (in which case Client shall not thereafter
be
responsible for the fees and expenses of any separate counsel retained by
such
Indemnified Person), or compromise or settle such action or proceeding, at
its
expense; provided, however, that such counsel shall be satisfactory to the
Indemnified Person in the exercise of its reasonable judgment. Notwithstanding
Client's election to assume the defense of such action or proceeding, such
Indemnified Person shall have the right to employ separate counsel and to
participate in the defense of such action or proceeding, and Client shall
bear
the reasonable fees, costs and expenses of such separate counsel (and shall
pay
such fees, costs and expenses at least quarterly), if (a) the use of
counsel chosen by Client to represent such Indemnified Person would, in the
reasonable judgment of the Indemnified Person, present such counsel with
a
conflict of interest; (b) the defendants in, or targets of, any such action
or proceeding include both an Indemnified Person and Client, and such
Indemnified Person shall have reasonably concluded that there may be legal
defenses available to it or to other Indemnified Persons which are different
from or additional to those available to Client (in which case Client shall
not
have the right to direct the defense of such action or proceeding on behalf
of
the Indemnified Person); (c) Client shall not have employed counsel
reasonably satisfactory to such Indemnified Person in the exercise of the
Indemnified Person's reasonable judgment to represent such Indemnified Person
within a reasonable time after notice of the institution of such action or
proceeding; or (d) Client shall authorize such Indemnified Person to employ
separate counsel at Client's expense.
In
order
to provide for the just and equitable contribution, if a claim for
indemnification hereunder is found unenforceable in a final judgment by a
court
of competent jurisdiction (not subject to further appeal), even though the
express provisions hereof provide for indemnification in such case, then
Client
and Consultant shall contribute to the losses, claims, damages, judgments,
liability, expenses or costs to which the Indemnified Person may be subject
in
accordance with the relative benefits received by, and the relative fault
of,
each in connection with the statements, acts or omissions which resulted
in such
losses, claims, damages, judgments, liabilities, or costs. No person found
liable for a fraudulent misrepresentation or omission shall be entitled to
contribution from any person who is not also found liable for such fraudulent
misrepresentation or omission. Notwithstanding the foregoing, Consultant
shall
not be obligated to contribute any amount hereunder that exceeds the amount
of
fees previously received by Consultant for its services to Client.
These
indemnification provisions shall (i) remain operative and in full force and
effect regardless of any termination or completion of the engagement of
Consultant; (ii) inure to the benefit of any successors, assigns, heirs or
personal representative of any Indemnified Person; and (iii) be in addition
to any other rights that any Indemnified Person may
have.
