CONSULTING SERVICE AGREEMENT
Exhibit
10.1
This
Consulting Service Agreement (this “Agreement”)
is
made this 26th day of April, 2007 (the “Commencement
Date”)
by and
between MTM Technologies, Inc. (the “Company”),
with
offices at 0000 Xxxx Xxxxx Xxxx, Xxxxxxxx, XX, 00000, Xxxxxxx X. Xxxxxx
(“FJA”)
and
Tory Ventures LLC (the “Consultant”),
each
of which has an address c/o Shechtman Halperin Savage LLP, Xxx Xxxxx Xxxxxxxx,
Xxxxx 0000, Xxxxx Xxxxxx, XX 00000.
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1.
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Engagement.
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The
Company hereby engages Consultant to render to the Company the services
described in Section 2 of this Agreement, during the term described in Section
3
of this Agreement.
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2.
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Services.
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The
scope
of the services to be performed by Consultant will consist of advice and
consultation regarding the business and operations of the Company, as
the
Company and the Consultant shall agree upon from time to time (together,
the
“Services”),
provided that this Agreement shall not require Consultant to make any minimum
time commitment to providing Services to the Company. All of the Services
shall
be performed exclusively by FJA. FJA may perform the Services from a remote
location. FJA will cooperate with reasonable requests of the Company in
transitioning relationships with vendors and customers of the Company and
taking
such other actions as the Company may reasonably request, including, without
limitation, appearing and providing testimony on behalf of the Company in
judicial, arbitral and administrative proceedings; provided the Company agrees
to reimburse FJA’s documented, out-of-pocket expenses incurred in connection
with such cooperation in accordance with Section 4 of this
Agreement.
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3.
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Term
and Termination.
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(a) This
Agreement will be effective, and Consultant will provide the Services,
commencing on the Commencement Date, and continuing thereafter through and
including June 30, 2009, (the “Term”).
(b) This
Agreement may be terminated by the parties prior to its expiration, as
follows:
(i) By
the
Company: If Consultant or FJA (1) commits willful or grossly negligent
acts to the substantial detriment of the Company; (2) breaches any provision
of
Section 7 of the Employment Agreement between FJA and the Company, dated
as of
June 28, 2006 (the “Employment
Agreement”),
as
modified by the Agreement and General Release made on the date hereof by
the
Company and FJA (the “Release
Agreement”)
or (3)
breaches any material term or provision of this Agreement or the Release
Agreement and, in the case of (1), (2) or (3), such act or breach is not
cured
within ten (10) days after the Company gives FJA or Consultant written notice
complaining of such act or breach.
(ii) By
Consultant: If the Company breaches any material term or provision of this
Agreement or the Release Agreement and such breach is not cured within ten
(10)
days after FJA or Consultant gives the Company written notice complaining
of
such breach; provided,
however
that
with respect to a failure by the Company to make payments hereunder such
cure
period shall be five (5) days after written notice thereof.
(c) This
Agreement and Consultant’s Services hereunder will terminate automatically upon
Consultant’s death. In such event, the Company shall pay to Consultant’s estate
all compensation that would have been owed to Consultant under this Agreement
through the Term of this Agreement, had Consultant lived. Such compensation
shall be paid in accordance with Section 4(a) of this Agreement.
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4.
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Compensation
and Other Benefits.
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(a) Compensation.
For services rendered under this Agreement, the Company will pay Consultant
(i)
a signing bonus of Fifty-Eight Thousand, Three Hundred and Thirty-Three
Dollars
and Thirty-Three Cents ($58,333.33) on May 15, 2007 in accordance with
the
normal payroll practices of the Company and (ii) fees at the rate of Twenty-Nine
Thousand, One Hundred and Sixty-Six Dollars And Sixty-Seven Cents ($29,166.67)
per month, payable in arrears in twice monthly payments of Fourteen Thousand,
Five Hundred and Eighty Three Dollars and Thirty-Three Cents ($14,583.33)
with
the initial payment on May 15, 2007 in accordance with the normal payroll
practices of the Company, provided
that a
lump sum payment on March 31, 2008 shall be made which shall include fees
from
April 1, 2008 through March 31, 2009. No fee shall be payable with respect
to
services under this Agreement from April 1, 2009 to June 30, 2009. Upon
a
“change of control” of the Company all compensation under this Agreement shall
become immediately due and payable; provided, however, that the March 31,
2008
payment shall, in no event be paid to Consultant prior to the date that
is six
months following the date hereof. . For the purposes of this Agreement,
“change
of control” shall have the meaning given such term in Section 409A of the
Internal Revenue Code and the regulations promulgated thereunder.
(b) Other
Benefits.
The
Consultant shall be provided telephonic, voicemail, e-mail and other such
services as may be determined by the Company during the Term, provided
that such
services are to be used by Consultant for the purpose of providing Services
under this Agreement.
(c) Expenses.
During the Term, the Company shall not be obligated to reimburse the Consultant
for any business expenses Consultant incurs in the performance of the Services,
unless the Company, in its sole discretion, approves reimbursement of such
business expenses, in advance, and in writing.
(d) Stock
Options.
The Options will be treated in accordance with Section 8(b)(i) of the Stock
Option Award Agreements dated June 28, 2006, April 15, 2005 and May 21,
2004 and
the and Restricted Stock Units will be treated in accordance with Section
6(b)(i) Restricted Stock Unit Award Agreement dated April 15, 2005.
(e) Payments.
All fees payable by the Company under the terms of this Agreement shall
be paid
to Consultant. Consultant has provided to the Company a complete and fully
executed IRS Form W-9. The Company will provide Consultant with a Form
1099
reflecting the fees paid to Consultant pursuant to this Agreement during
each
affected tax year. Payments made under Section 4(a) and Section 4(b) of
this
Agreement shall be made by wire transfer of immediately available funds
to such
account as designated in writing from time to time by the Consultant to
the
Company.
(f) Acceleration
of Payments.
If the Company fails to make any payment under this Agreement or the Release
Agreement within five (5) days of the date it is required to be made, or
if the
Consultant terminates this Agreement pursuant to Section 3(b)(ii), the
Consultant shall have the right, by written notice to the Company, to declare
all unpaid compensation under Section 4(a) of this Agreement and under
Section
4(a) of the Release Agreement to be immediately due and payable, and the
Company
shall pay such unpaid compensation within five (5) days of receipt of such
notice; provided, however, that the March 31, 2008 payment shall, in no
event be
paid to Consultant prior to the date that is six months following the date
hereof.
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5.
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Independent
Contractor.
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The
relationship between the Company and each of FJA and Consultant is that of
independent contractors, and the Company and each of FJA and Consultant will
represent, and will cause its officers, employees, agents and representatives,
if any, to represent to third parties that each of FJA’s and Consultant’s
capacity hereunder is that of a “consultant” or “advisor”. No party will be the
agent of the other for any purpose whatsoever, have power or authority to
make
or give any promise, to execute any contract or otherwise create, or to assume
any liability or obligation in the name of or on behalf of any other party.
No
party will misrepresent, and each party will cause its officers, employees,
agents and representatives, if any, not to misrepresent, to any third party
that
it has any power or authority which is denied to it by the preceding sentence.
The making of any such misrepresentation is a breach of a material term of
this
Agreement, is not capable of cure, and is sufficient reason for termination
of
this Agreement pursuant to Section 3(b)(i). As an independent contractor,
neither FJA nor Consultant will (except as otherwise provided in the Release
Agreement and this Agreement) be entitled to participate in any
Company-sponsored employee benefits programs. Each of FJA and Consultant
will be
wholly and fully responsible for any taxes owed to any governmental authority
with respect to the fees set forth in Section 4 of this Agreement. Each of
FJA
and Consultant represents and warrants that FJA and Consultant will pay any
such
taxes as and when due.
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6.
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Assignment.
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This
Agreement is personal to the parties hereto and neither party may assign
its
rights or delegate its obligations hereunder without the prior written consent
of the other party, which may be withheld without cause or explanation; provided
that Consultant may assign the right to receive payments under this Agreement
to
FJA or to any corporation or other entity which is wholly-owned by FJA or
Consultant. Any purported assignment or delegation in violation of this Section
shall be void.
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7.
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Notice.
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All
notices, requests and other communications pursuant to this Agreement shall
be
in writing and shall be deemed effective upon (a) personal delivery, if
delivered by hand, (b) the next business day, if sent by a prepaid overnight
courier service, or (c) three days after the date of deposit in the mails,
if
mailed by registered or certified mail, and in each case addressed as
follows:
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If
to FJA or Consultant:
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Xxxxxxx
X. Xxxxxx
c/x
Xxxxxxxxx Xxxxxxxx Xxxxxx LLP
Xxx
Xxxxx Xxxxxxxx, Xxxxx 0000
Xxxxx
Xxxxxx, XX 00000
Attn:
Xxxxx X. Xxxxx, Esq.
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With
a copy to:
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Xxxxx
X. Xxxxx, Esq.
Xxxxxxxxx
Xxxxxxxx Xxxxxx LLP
Xxx
Xxxxx Xxxxxxxx, Xxxxx 0000
Xxxxx
Xxxxxx, XX 00000
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If
to the Company:
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0000
Xxxx Xxxxx Xxxx, Xxxxxxxx, XX, 00000
Xxxxxxxx,
Xxxxxxxxxxx 00000
Attn.:
Chief Executive Officer
Attn.:
General Counsel
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With
a copy to:
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E.
Xxx Xxxx, Esq.
Xxxxxx
Xxxx Xxxxx Raysman & Xxxxxxx LLP
000
Xxxxx Xxxxxx
Xxx
Xxxx, Xxx Xxxx 00000-0000
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Either
party may change the address to which notices to such party are to be sent
by
giving notice of such change of address in the manner provided by this Section
7.
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8.
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Waiver
of Breach.
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Any
waiver of any breach of this Agreement shall not be construed to be a continuing
waiver or consent to any subsequent breach on the part either of Consultant
or
of the Company.
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9.
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Severability.
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To
the
extent any provision of this Agreement or portion thereof shall be invalid
or
unenforceable, it shall be considered deleted therefrom and the remainder
of
such provision and of this Agreement shall be unaffected and shall continue
in
full force and effect and this Agreement shall be construed to the greatest
extent possible to carry out the intent of the parties hereto.
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10.
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Counterparts.
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This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed to be an original but all of which together will constitute one and
the
same instrument.
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11.
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Governing
Law.
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This
Agreement shall be construed, interpreted and enforced in accordance with
the
laws of the State of Connecticut, without giving effect to the choice of
law
principles thereof.
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12.
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Entire
Agreement.
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This
Agreement contains the entire agreement between the Company, FJA and Consultant
with respect to Consultant’s provision of services to the Company.
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13.
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Amendment.
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No
provision of this Agreement may be canceled or amended by the parties hereto
except by an instrument in writing signed on behalf of each of the parties
hereto. A provision of this Agreement may be waived only by a written instrument
signed by the party against whom or which enforcement of such waiver is
sought.
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14.
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Dispute
Resolution.
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(a) Except
as
specifically provided herein, any dispute or controversy arising under or
in
connection with this Agreement shall be, upon the demand of either party,
subject to a non-binding mediation proceeding before a mediator on the panel
of
the CPR Institute for Dispute Resolution, such mediator to be agreed upon
by the
parties.
(b) If
a
mediator is not agreed upon or if mediation is not successful, any dispute
or
controversy between the Company and Consultant arising under or in connection
with this Agreement (except any claim by the Company relating to Consultant’s
breach of Section 7 of the Employment Agreement, as modified by the Release
Agreement) shall be settled by binding arbitration before a single arbitrator
in
Stamford, CT pursuant to the Employment Dispute Resolution Rules of the American
Arbitration Association (“AAA”). Each party shall bear its own costs, expenses
and fees, including, without limitation, attorneys’ fees and experts’ fees with
respect to any such arbitration. The parties shall share equally the fees
of the
arbitrator and the AAA. Judgment upon any resulting arbitration award may
be
entered in any court of competent jurisdiction.
(c) Neither
party shall be required to mediate or arbitrate any dispute arising between
it
and the other party relating to any breach of Section 7 of the Employment
Agreement, as modified by the Release Agreement, but shall have the right
to
institute judicial proceedings in the United States District Court or in
a state
court having jurisdiction in Stamford, Connecticut, with respect to such
dispute
or claim. Each party hereby consents to, and waives any objection to, the
personal jurisdiction and venue of the aforesaid courts,
and
waives any claim that the aforesaid courts constitute an inconvenient forum
and
any right to trial by jury. If such judicial proceedings are instituted,
the
parties agree that such proceedings shall not be stayed pending the outcome
of
any arbitration proceedings hereunder.
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15.
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Xxxxxxx
Xxxxxxx.
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Consultant
acknowledges and agrees that he is subject to the terms and conditions of
the
Company’s Xxxxxxx Xxxxxxx Policy, as the same exists from time to time, and that
he will comply with the terms of such policy during the period beginning
on the
Commencement Date and ending ninety (90) days thereafter.
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16.
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Other
Activities.
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Subject
to the restrictions imposed upon Consultant by the provisions of Section
7 of
the Employment Agreement, as modified by the Release Agreement, the parties
agree that Consultant may enter into agreements to provide consulting services
to other persons or entities.
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17.
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Resignation
from the Board of Directors.
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FJA
hereby resigns from the Board of Directors of the Company.
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18.
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Attorneys’
Fees.
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The
Company agrees to reimburse the Consultant and FJA for fees and expenses
of
counsel in connection with the negotiation of this Agreement and the Release
Agreement in an amount not to exceed $5,000. Such reimbursement shall be
made on
May 15, 2008; provided, that the Company has received a copy of the invoice
therefor. If the Company is found, by a final judgment of a court of competent
jurisdiction, which judgment is not subject to appeal, to have breached this
Agreement or the Release Agreement in a manner that is materially detrimental
to
the Consultant or FJA, the Company agrees to reimburse the Consultant and
FJA
for fees and expenses of counsel incurred in obtaining such judgment in an
amount not to exceed $10,000.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date
first written above.
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By:
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/s/ Xxx X. Xxxxxxxx III |
/s/
Xxxxxxx X. Xxxxxx
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Name:
Xxx X. Xxxxxxxx III
Title:
Chief Financial Officer
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XXXXXXX
X. XXXXXX
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TORY
VENTURES LLC
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By:
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/s/
Xxxxxxx X. Xxxxxx
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Name:
Xxxxxxx X. Xxxxxx
Title:
Member
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