Tatum, LLC Full-Time Permanent Engagement Resources Agreement
Exhibit 10.18
Xxxxx, LLC
Full-Time Permanent Engagement Resources Agreement
Full-Time Permanent Engagement Resources Agreement
July 12, 2007
Dear Xx. Xxxxxx:
Xxxxx, LLC (“Xxxxx”) understands that NitroSecurity, Inc. (the “Company”) desires to hire Xxxx
Xxxxxxx, 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 (this “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. Xxxxx acknowledges that the Company and the Employee have also entered into an
employment agreement, dated on or about the date of this Resources Agreement (the “Employment
Agreement”).
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 with respect to the
subject matter herein, and supersedes that certain Project Work Agreement, dated March 26, 2007,
between the Company and Xxxxx with respect to work to be performed by the Employee.
Compensation
The Company will pay to Xxxxx in lieu of the Employee, as compensation for the resources Xxxxx is
providing, a portion of the Employee’s Salary (as defined in the Employment Agreement) and any Cash
Bonus (as defined in the Employment Agreement) as follows:
Salary: (i) $6,095, which is equal to approximately 16.7% of the Salary, during the first and
second 12 months of the term of this Resources Agreement, (ii) $3,905, which is equal to
approximately 10.7% of the Salary, during the third 12 months, and (iii) $1,000 per month during
the fourth 12 months and each 12-month period thereafter.
Cash Bonus: 15% of any Cash Bonus paid to the Employee during the term of this Resources Agreement.
In addition, the Company acknowledges that the Employee will share with Xxxxx 15% of any cash
proceeds realized from any Equity (as defined in the Employment Agreement) that the Employee may be
granted, provided that Xxxxx expressly agrees that it is the Employee’s sole duty to pay any
proceeds realized from Equity to Xxxxx and that Xxxxx will not seek to recover any such proceeds
from the Company.
Salary, Cash Bonus and Equity are collectively referred to herein as the “Resource Fee.”
Payments to Xxxxx should be made by direct deposit through the Company’s payroll, or by an
automated clearing house payment, at the same time as payments are made to the Employee in
accordance with
1
written instructions provided by Xxxxx. 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. To the extent permitted
by applicable law, the Company and Xxxxx agree that any payments made to Xxxxx will reduce the
Employee’s compensation for purposes of determining taxable income and should not be reflected as
compensation in the Employee’s W-2 report.
Deposit
Xxxxx acknowledges that it received a security deposit of $15,000 (the “Security Deposit”) from the
Company pursuant to the Project Work Agreement, dated March 26, 2007, between Xxxxx and the
Company. Xxxxx shall retain the Security Deposit to secure the Company’s future payment
obligations to Xxxxx under this Resources Agreement. If the Company breaches this Resources
Agreement and fails to cure such breach as provided herein, Xxxxx will be entitled to apply the
Security Deposit to its damages resulting from such breach. Upon termination of this Resources
Agreement, Xxxxx will return to the Company the balance of the Security Deposit remaining after
application of any amounts to unfulfilled payment obligations of the Company due Xxxxx as provided
for in this Resources Agreement.
Insurance
The Company shall provide Xxxxx with written evidence that the Company maintains directors’ and
officers’ insurance to cover the Employee at no additional cost to the Employee.
Termination
This Resources Agreement will terminate immediately upon the earlier of the effective date of (i)
the termination of the Employee’s employment with the Company or (ii) 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 fourteen (14) 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 following the fourteen (14th) day following such written notice of
termination.
Hiring Xxxxx Partner Outside of Resources Agreement
During the twelve (12)-month period following termination of this Resources Agreement, other than
in connection with (i) the Employee’s employment/partnership with Xxxxx being terminated by Xxxxx
or (ii) another agreement between the Company and Xxxxx, 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 up to
forty-five percent (45%) of the Employee’s Annualized Compensation. The amount will be due and
payable to Xxxxx upon written demand to the Company. For purposes hereof,
“Annualized Compensation” shall mean the Employee’s portion of the most recent Salary on an
2
annualized basis and the maximum amount of any bonus for which the Employee was eligible with
respect to the then-current bonus year.
Disclaimers and Limitations of Liability
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 that 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 introducing the Employee 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’x reports, projections, forecasts, or information or services
are for the sole benefit of the Company and not any unnamed third parties.
Xxxxx disclaims all warranties, either express or implied, related to the accuracy or reliability
of reports, projections, forecasts or other information prepared by third parties, and Xxxxx will
not be liable for any claims of reliance on such third party reports, projections, forecasts or
information. Xxxxx will not be liable for any non-compliance of such third party reports,
projections, forecasts or information or services with federal, state or local laws or regulations.
If, after the Employee ceases to be an employee of the Company, the Employee is subpoenaed or
otherwise required to appear as a witness or to provide evidence in connection with any action,
suit or other proceeding initiated by a third party in connection with the Company or by the
Company against a third party, then the Company shall reimburse Xxxxx for (i) reasonable, direct,
out-of-pocket expenses (including attorneys’ fees) actually incurred by Xxxxx in relation to such
action, suit or other proceeding and (ii) the time actually incurred by the Employee in relation to
such action, suit or other proceeding calculated as a per diem amount based on the Employee’s
Salary immediately prior to leaving the Company’s employment; provided, however, that (a) such
reimbursement shall not exceed an aggregate of $15,000, (b) only Xxxxx’x expenses (and not any
expenses independently incurred by the Employee) shall be reimbursed under clause (i) above if the
Employee is no longer a partner in Xxxxx when such expenses are incurred, (c) Xxxxx shall not be
reimbursed under clause (ii) above if the Employee is no longer a partner in Xxxxx when such time
is incurred and (d) such reimbursement shall only apply to the extent the Employee is not otherwise
entitled to indemnification by the Company.
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 the Resource Fees actually received by Xxxxx hereunder.
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 Wilmington, Delaware 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
3
be chosen by AAA. 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 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.
Notwithstanding the foregoing, 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 reimbursement of costs and expenses,
limitation of liability, and arbitration will survive any termination 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 Delaware, 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.
Please sign below and return a signed copy of this letter to indicate the Company’s agreement with
its terms and conditions.
4
We look forward to serving you.
Sincerely yours,
| XXXXX, LLC |
||||
| By: | /s/ Xxxxxx XxXxxxxx | |||
| Xxxxxx XxXxxxxx
Area Managing Partner for XXXXX, LLC |
||||
NITROSECURITY, INC. |
||||
| By: | /s/ Xxxxxxx X. Xxxxxx | |||
| Xxxxxxx X. Xxxxxx Chief Executive Officer |
||||
Date: 7/12/07 |
||||
5
