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CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT ("Agreement") is entered into as of July 3,
2006, by and between Technology Management Advisors LLC, a Colorado limited
liability company ("Consultant"), and Composite Technology Corporation, a Nevada
corporation and its subsidiary CTC Cable Corporation, a Nevada corporation
("Company").
Recitals
A. The Company is in the business of (a) developing technology for
composite materials for electrical conductor and structural applications, (b)
manufacturing, marketing and selling composite reinforced materials for
electrical conductor and structural applications, and (c) manufacturing,
marketing and selling electrical conductor and structural products incorporating
composite materials (the "Business"). The Company's success is in large part
dependent upon its ability to protect its intellectual property and to continue
to develop or identify additional technology that will provide a competitive
advantage in the Business.
B. Consultant is in the business of advising clients with respect to the
creation, management and protection of intellectual property rights. Consultant
also provides business advice and structuring for new business opportunities.
C. The Company desires to retain Consultant, and Consultant is willing to
be retained by the Company, to render consulting services on the terms and
conditions set forth herein.
Agreement
Accordingly, in consideration of the mutual covenants contained herein,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
1. Term. On the terms and subject to the conditions set forth herein, the
Company agrees to retain Consultant, and Consultant agrees to serve as a
consultant to the Company, for a term commencing on the date hereof and ending
on July 3, 2009. This term may be extended upon mutual agreement of the parties.
2. Technology Management. Consultant shall provide the following services
to the Company in connection with its ongoing technology management program:
(a) Advise management of the Company with respect to all aspects of
the Company's technology protection and management program,
including consulting with respect to strategies to create and
protect intellectual property rights associated with its existing
technology and any new technology developed or acquired;
(b) Consider and advise management concerning patent protection for
the Company's technology, including the processes, hardware
configurations and software, and advise management in connection
with management's determinations as to the filing of patent
applications;
(c) Select and manage legal groups to prepare, file and prosecute
the desired patent applications authorized by management; review the
patent applications prepared by counsel on behalf of the Company;
and keep management advised as to the prosecution of each
application and the timing of the issuance of each of the
applications;
(d) Consider and advise management concerning international filing
strategies, including the selection of countries for each of the
corresponding U.S. applications; select and manage attorneys and
agents in each country selected by management for filing, coordinate
with such attorneys and agents the filing and prosecution of all
foreign patent applications and the maintenance of issued patents;
(e) Work closely with management with regard to the ongoing research
and development efforts to coordinate the initial patent filings
with anticipated filings and to develop a database sufficient to
strengthen and broaden the overall patent protection consistent with
available resources;
(f) Consider and advise management concerning options for
third-party arrangements for further technology development,
manufacturing, marketing, licensing and joint venture arrangements
in the U.S. and abroad and overall company strategies regarding such
transactions;
(g) Advise management with respect to technology based agreements,
including consulting agreements, agreements dealing with the
disclosure and protection of proprietary information and agreements
establishing and managing technology based joint developments, joint
ventures, limited liability companies and other forms of business
alliances;
(h) Work with patent counsel, advise management with respect to
"freedom to operate" issues relating to third party patents,
including problems associated with the production and sales of
particular products in view of third-party patents; and
(i) Provide such other services relating to technology management
and protection as are agreed upon by the Company and Consultant.
3. New Technology Within Scope of Business. Consultant shall assist
management in evaluating new technology that is within the scope of the
Business. Consultant shall promptly advise Company when it becomes aware of new
technology that is within the scope of the Business and Company shall advise
Consultant of its interest in any technologies that it desires the services of
Consultant. Regarding such technologies, each shall provide to the other all
relevant information in its possession with respect to the technology. If the
Company desires to pursue the new technology, Consultant shall use commercially
reasonable efforts to investigate and analyze the technology and determine its
availability to the Company, including, without limitation, conducting due
diligence in the area of intellectual property protection and freedom to
operate. Consultant shall report to management the results of any investigations
and the Company shall instruct Consultant whether it wishes to pursue the
acquisition of rights with respect to the technology. If the Company desires to
acquire rights in the technology, Consultant shall attempt to negotiate
agreements for the Company's acquisition of the rights desired. Consultant shall
not have authority to enter into any such agreement on the Company's behalf and
all agreements must be approved and executed by an authorized officer of the
Company. Consultant will advise and consult with management concerning all
agreements and transactions pursuant to which rights in such technology are
acquired or new technology is developed or commercialized, including, without
limitation, the structuring and documentation of relationships with other
individuals or entities who will participate in the acquisition, development or
commercialization of the technology. If the Company is successful in acquiring
rights in a technology, Consultant will provide the services discussed in
Section 2 with respect to that technology.
4. Scope. The Company acknowledges that the time required for Consultant
to perform the services described in Sections 2 and 3 will depend upon the level
of technology-related activity by the Company and also upon the nature and
availability of technology within the scope of the Business. Consultant shall
devote such time and effort to the performance of those services as is
reasonably necessary to fulfill its obligations hereunder. Any work or task of
Consultant provided for herein which requires the Company to provide information
or assistance to Consultant shall be excused (without effect upon any obligation
of the Company) until such time as the Company has fully provided all
information and assistance necessary for Consultant to complete the work or
task. The services of Consultant shall not include any work that is in the
ordinary purview of a lawyer, certified public accountant or other licensed
professional and the Company shall be responsible for separately retaining and
compensating any such professional whose services are necessary to allow
Consultant to fulfill its obligations hereunder. Consultant cannot guarantee
results on behalf of the Company, but shall use commercially reasonable efforts
in providing the services described above.
5. Consultant Personnel. Consultant acknowledges that the Company is
entering into this Agreement to obtain the services of Xx. XxXxxxxx. Consultant
agrees that all services hereunder (other than clerical or administrative
services) shall be performed either directly by or under the direct supervision
of Xx. XxXxxxxx.
6. Consultant Compensation.
Consultant shall be compensated in an amount of $250,000 per year, payable
monthly at the beginning of each calendar month.
7. Expenses. The Company shall reimburse Consultant for all direct
out-of-pocket costs reasonably incurred by Consultant in the performance of
services hereunder; provided, however, that any expense in excess of $1,000 for
any item must be approved in advance by the Company. The Company shall reimburse
expenses promptly upon receipt of a statement therefor from Consultants
accompanied by a reasonable supporting documentation.
8. Cooperation by Company. The Company shall make available to Consultant
all information and personnel reasonably requested by Consultant in connection
with the performance of its obligations hereunder. In addition, the Company
shall keep Consultant informed on a reasonably current basis of developments in
the Company's technology and business so that the Consultant shall have a
reasonable basis upon which to advise the Company as contemplated hereby.
9. Confidentiality. Consultant and Company acknowledge and reaffirm the
Confidentiality Agreement entered into on January 4, 2002.
10. Standard of Care. Consultant shall perform all services hereunder in a
commercially reasonable manner and to the best of its ability. However,
Consultant shall have no liability to the Company for any loss, liability, cost
or expense suffered or incurred by the Company as a result of any act or
omission by Consultant or its personnel except such as arise from the gross
negligence or willful misconduct of Consultant or its personnel. In the event
that Consultant selects legal counsel or others to provide services to the
Company, Consultant shall not be responsible for any act or omission of such
legal counsel or others as long as they were selected with reasonable care.
11. Indemnification. The Company shall indemnify Consultant and its
members, managers, officers, directors, employees and agents against any loss,
liability, cost or expense incurred by any of them as a result of or relating to
the performance of services for the Company hereunder, except such as are caused
directly by the gross negligence or willful misconduct of Consultant or its
personnel. Such indemnification shall include all expenses (including reasonable
attorneys fees) incurred by the indemnified person in connection with
investigating and defending any claim against which such person is entitled to
indemnification.
12. Termination.
(a) Annual. Either party shall have the right to terminate this
Agreement as of any anniversary of the date hereof by providing at
least ninety (90) days' prior written notice to the other party.
(b) Breach. If either party fails to perform its obligations
hereunder in any material respect, and if such failure is not cured
within 30 days after written notice of breach from the other party,
the other party may terminate this Agreement by written notice of
termination to the breaching party.
(c) Unavailability of XxXxxxxx. In the event that the services of
Xx. XxXxxxxx become unavailable to Consultant, whether as a result
of death, disability, retirement or otherwise, the Company may
terminate this Agreement by written notice to Consultant.
(d) Change of Control. In the event that (i) the Company sells more
than 50% of its assets, whether in a single transaction or a series
of transactions, (ii) any five or fewer persons (other than Xxxxxx
Xxxxxxxx) have or acquire beneficial ownership (as determined for
purposes of Section 13 of the Securities Exchange Act of 1934, as
amended) of 40% or more of the Company's outstanding Common Stock,
or (iii) Xxxxxx Xxxxxxxx'x employment with the Company terminates,
whether as a result of death, disability, retirement or otherwise,
then, in any such event, Consultant may terminate this Agreement by
written notice to the Company.
13. Nature of Agreement. The services to be provided by Consultant
hereunder shall not include the practice of law. Any legal services required by
the Company with respect to the matters dealt with in this Agreement shall be
provided by lawyers selected by Consultant and reasonably satisfactory to the
Company who shall be retained and separately compensated by the Company. The
Consultant shall act solely as an independent contractor under this Agreement
and nothing contained herein is intended to create any partnership, agency,
joint venture or other relationship between the Company and the Consultant.
Consultant shall have no authority to bind the Company contractually in any
manner.
14. Notices. All notices given under this Agreement shall be in writing.
Any notice may be transmitted by any means selected by the sender. A notice that
is mailed to a party at its address given below, registered or certified mail,
return receipt requested, with all postage prepaid, will be deemed to have been
given and received on the earlier of the date reflected on the return receipt or
the third business day after it is posted. Any notice sent by facsimile
transmission to a party at its facsimile number given below shall be deemed to
have been given and received upon confirmation of transmission by the sender's
facsimile machine. Any notice transmitted by recognized overnight courier
service to a party at its address given below shall be deemed given and received
on the first business day after it is delivered to the courier. Any notice given
by any other means shall be deemed given and received only upon actual receipt.
The addresses and facsimile numbers of the parties for notice purposes are as
follows:
If to the Consultant:
Xxxxxxx X. XxXxxxxx, Manager
Technology Management Advisors LLC
00000 X. Xxxxxxxx Xxxx., Xxxxx 000
Xxxxxx, XX 00000
Facsimile No: (000) 000-0000
If to the Company:
Xxxxxx X. Xxxxxxxx, CEO
Composite Technology Corporation
0000 XxXxx Xxxxxx
Xxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Any party may change its address or facsimile number for notice purposes, or add
additional persons to whom copies of any notice should be sent, by written
notice to the other party.
15. Miscellaneous. This Agreement shall be governed in all respects by the
laws of the State of California. This Agreement contains the entire
understanding of the parties with respect to the subject matter hereof and
neither party has relied upon any representation, warranty or promise not
contained herein. No failure by either party to insist upon the strict
performance of any term or provision of this Agreement shall constitute a waiver
thereof on that or any subsequent occasion. This Agreement may be amended, and
any term or provision hereof may be waived, only in a writing signed by the
party charged with such amendment or waiver. In the event of any litigation
between the parties with respect to this Agreement or the performance of either
party hereunder, the prevailing party shall be entitled to recover, in addition
to any other relief awarded by the court, its reasonable attorneys' fees and
other costs of preparing for and participating in the litigation.
16. Entire Agreement. This Agreement constitutes the entire Agreement
between the parties regarding the subject matter set forth herein. This
Agreement supercedes and hereby terminates the Agreement entitled "Consulting
Agreement" entered into as of March 1, 2005, between the parties hereto.
IN WITNESS WHEREOF, the Company and the Consultant have executed this
Agreement as of the day and year first above written.
Technology Management Advisors LLC
By: /s/ Xxxxxxx X. XxXxxxxx
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Xxxxxxx X. XxXxxxxx, Manager
Composite Technology Corporation
By: /s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx, CEO
