EXECUTIVE CONSULTING AGREEMENT
EXECUTIVE
CONSULTING AGREEMENT, dated as of January 19, 2007 (this “Agreement”),
between WASHINGTON CAPITAL ADVISORS, INC. (“Consultant”)
and
FORTRESS AMERICA ACQUISITION CORPORATION, a Delaware corporation (the
“Company”).
RECITALS
WHEREAS,
by the terms of a Second Amended and Restated Membership Interest Purchase
Agreement (the “Purchase
Agreement”)
dated
July 31, 2006, by and among the Company, Xxxxxx X. Xxxxxx (“Xxxxxx”),
Xxxxxx Xxxxxxxxx (“Xxxxxxxxx”),
VTC,
LLC (“VTC”)
and
Vortech, LLC (“Vortech”),
the
Company has agreed to purchase from Xxxxxx and Xxxxxxxxx all of the outstanding
membership interests of VTC and Vortech.
WHEREAS,
the Company desires to obtain financial, acquisition, strategic, business and
consulting services from Consultant with respect to the management of the
Company and future acquisitions the Company may wish to undertake;
and
WHEREAS,
Consultant is in the business of providing such services and is willing to
provide such services to the Company in accordance with the terms and conditions
of this Agreement.
NOW,
THEREFORE, in consideration of the premises and the mutual covenants and
agreements set forth in this Agreement and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Consultant and the Company agree as follows:
AGREEMENT
Section
1. Engagement.
Upon
the terms and subject to the conditions set forth in this Agreement, the Company
retains Consultant as a consultant to provide analysis, advice and other
financial, strategic, business, acquisition and consulting services including,
but not limited to, the identification and sourcing of capital to meet the
needs
of the Company (the “Services”).
Section
2. Consultant’s
Duties and Obligations.
Consultant agrees, during the term of this Agreement, to provide the Services
in
a professional manner and to provide such other consulting services as may
be
reasonably requested (upon reasonable prior notice) from time to time by the
Company in accordance with this Agreement, including, without limitation,
providing the services of representatives of Consultant.
Section
3. Term.
(a) Expressly
conditioned upon the closing (the “Closing”)
under
the Purchase Agreement and effective as of the date of the Closing (the
“Closing
Date”),
the
Company hereby retains the Consultant and the Consultant hereby accepts
engagement as a consultant and agrees to render services to the Company, on
the
terms and conditions set forth in this Agreement for the period (the
"Consulting
Period")
beginning on the Closing Date and ending when such period is terminated pursuant
to the terms hereof. Unless earlier terminated by either the Company or the
Consultant as hereinafter provided, the Consulting Period shall continue through
the third (3rd) anniversary of the Closing Date ("Expiration
Date");
provided, however, that if this Agreement is renewed pursuant to Section 2.1(b)
below, then the “Expiration Date” for the then current “Renewal Term” (as
hereinafter defined) shall be the date that is last day of the one year period
of that Renewal Term). Notwithstanding anything to the contrary continued in
this Section 2.1(a), if the Closing under the Purchase Agreement does not occur,
this Agreement shall be null and void and of no force and effect.
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(b) This
Agreement shall be automatically renewed for an additional one year period
commencing at the expiration of the Initial Term or any subsequent renewal
term
(each, a "Renewal
Term")
unless
the Company provides written notice of termination to the Consultant not less
than sixty (60) days prior to the Expiration Date. Notwithstanding the foregoing
or anything else in this Agreement to the contrary, the Consulting Period shall
immediately terminate prior to any Expiration Date (i) upon termination by
Consultant for a “Good Reason” (as hereinafter defined); (ii) upon termination
by the Company for “Cause” (as hereinafter defined); (iii) by mutual agreement
of Consultant or the Company; and (iv) in all other circumstances, thirty (30)
days' prior written notice is required by either party to the other to terminate
this Agreement.
Section
4. Compensation;
Expenses.
(a) Base
Fee.
As
consideration for the provision of the Services, the Company agrees to pay
or to
cause its Subsidiaries to pay to Consultant, during the term of this Agreement,
the following fees:
(i) During
the Consulting Period, the Company shall pay the Consultant a fee of Two Hundred
Thousand Dollars ($200,000.00) per year ("Base Fee") paid in approximately
equal
installments bi-weekly. The Company will review the Base Fee on December 31
of
each year of the Consulting Period in order to determine what Base Fee
adjustments, if any, shall be made, subject to an annual minimum increase of
five percent (5%), but in no event may the Base Fee be reduced below that paid
in the preceding year.
(ii) For
calendar year 2006 (ending on or about December 31, 2006) and for each other
calendar year that begins during the Consulting Period (each such calendar
year,
a "Bonus Year"), the Consultant shall be eligible to receive a bonus in an
amount and on such terms as are established by the Company's Board up to fifty
percent (50%) of the Base Fee (each, a "Bonus") in accordance with the bonus
plan or formula applicable to the Consultant. The 2006 Bonus will be prorated
to
reflect that the 2006 Bonus Year is a partial year commencing on the Closing
Date and ending on December 31, 2006. In addition, Consultant shall be eligible
for any other bonus as the Board of Directors may determine in its sole
discretion. Any Bonus for an applicable calendar year, or portion thereof,
shall
be paid to the Consultant no later than the conclusion of the first calendar
quarter following each calendar year.
(b) Referral
Fee.
If,
during the term of this Agreement, Consultant identifies a potential new client
for the Company (other than the federal government, or any agency or subdivision
thereof), it shall promptly notify the Company in writing specifying the name
of
the target, the extent of its contact and the date upon which it has identified
the potential client. Upon receipt of such notification, the Company will
promptly acknowledge receipt of the notification and either (i) confirm to
Consultant that it has identified a potential new client (each an “Acknowledged
New Target”),
or
(ii) if the Company has independently of the Consultant already identified
such
potential client, it will advise Consultant and give it the date of the
Company's prior contact and the nature and extent thereof. As to each
Acknowledged New Target, the Consultant will cooperate with the Company in
broadening contact and establishing a dialogue. Any contracts that are entered
into between the Company and an Acknowledged New Target during (i) the term
of
this Agreement, or (ii) within six (6) months after the Expiration Date, or
if
sooner terminated, the Termination Date shall hereinafter be referred to
individually as a “Referred
Contract”
and
collectively as the “Referred
Contracts.”
Contracts entered into with an Acknowledged New Target more than six (6) months
after the Expiration Date (or Termination Date, as applicable) shall not be
deemed to be Referred Contracts. The Consultant shall not identify potential
clients on a blanket basis, but shall only identify clients with which he has
made specific contact and which appear to be viable prospects for new
business.
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(i) For
each
Referred Contract the Company will pay Consultant a referral fee equal to five
percent (5%) of the “Gross Profits” (hereinafter defined) earned by the Company
in each fiscal year (for each Referred Contract the “Referral
Fee”
and
for
all of the Referred Contracts the “Referral
Fees”).
(ii) For
purposes of this Section 3.6, the following terms shall have the following
meanings:
(A) “Gross
Profits”
with
respect to a Referred Contract shall mean the “Gross Revenues” with respect to
that Referred Contract (as defined below) less Cost of Goods/Services Sold
with
respect to that Referred Contract.
(B) “Gross
Revenues”
with
respect to any Referred Contract shall mean all revenue derived by the Company
under that Referred Contract from the rendering of services and the sales of
goods.
(C) “Cost
of Goods/Serviced Sold”
shall
mean with respect to each Referred Contract the direct costs of the Company
incurred by the Company in connection with generating the Gross Revenues which
costs shall include, but not be limited to (1) the labor and expense costs
of
the Company’s employees and consultants (including allocable administrative
costs); (2) direct vendor or supplier costs and other costs of goods, used
or
incorporated in or otherwise delivered to the customer under the Referred
Contract (including shipping costs) and (3) the costs of services rendered
by
third-party contractors.
(iii) The
determination of Gross Profits, Gross Revenues and Cost of Goods/Services Sold
with respect to each Referred Contract shall be made by the Company’s senior
financial Consultant using generally accepted accounting principles applied
on
the accrual basis of accounting and a basis consistent with the manner in which
the Company’s books and records are maintained.
(iv) The
Referral Fee due with respect to each Referred Contract shall be calculated
annually, based on the Company’s fiscal year and in connection with the
preparation of the Company’s audited financials. Not later than ten (10) days
after the release of the Company’s audited financials for the immediately
preceding fiscal year the Company’s senior financial Consultant shall provide
Consultant with a statement (each “Referral
Fee Statement”)
setting forth the calculation of the Referral Fees attributable to the Company’s
immediately preceding fiscal year in such reasonable detail as to permit
Consultant to review and confirm the accuracy of such calculations. The Company
shall also provide Consultant with reasonable access, subject to appropriate
confidentiality restrictions, to books and records appropriate to enable Seller
to review and verify such calculations. Consultant shall have fifteen (15)
days
following delivery of a Referral Fee Statement (each a “Disagreement
Notice Period”)
to
disagree with Referral Fee Statement by written notice to the Company setting
forth in reasonable detail the amount and nature of the disagreement (each
a
“Notice
of Disagreement”).
If
the Company does not receive a Notice of Disagreement from the Consultant within
the Disagreement Notice Period, the Consultant shall be conclusively presumed
to
agree with the Referral Fee Statement and the Company shall promptly pay to
the
Consultant the Referral Fees shown to be due on the Referral Fee Statement.
If
the Company receives a Notice of Disagreement from the Consultant within the
Disagreement Notice Period and if the Company and the Consultant are unable
to
mutually agree upon a settlement of the disagreement within thirty (30) days
after the delivery of the Notice of Disagreement to the Company, then the
dispute shall be resolved pursuant to Section 9.
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(c) Expenses.
The
Company shall reimburse Consultant for all reasonable out-of-pocket expenses
(including, without limitation, travel and lodging) incurred by Consultant,
its
managers, partners and other individuals whose compensation is reflected as
compensation expense on Consultant’s financial statements in connection with
providing the Services hereunder.
(d) Late
Payment.
Any
overdue fees payable by the Company under this Paragraph 4 shall accrue interest
at the rate of [__%] per annum, compounded monthly.
Section
5. Termination.
(a) Termination
For Cause or By the Consultant.
If the
Consulting Period is terminated (i) by the Company for “Cause” (as hereinafter
defined); or (ii) by the Consultant (other than for a Good Reason); then the
Consultant shall only be entitled to receive (A) the Base Fee and the
reimbursement of any applicable expenses pursuant to Paragraph 4 through the
date of termination (the “Termination Date”) and (B) the Referral Fees as and
when payable pursuant to the Paragraph 4(b); provided that the Expiration Date
for purposes of calculating the Referred Contracts and the Referral Fees shall
be the Termination Date rather than the Expiration Date. For purposes of this
Agreement the terms “Cause” and “Good Reason” and “Change in Control” shall have
the following meanings.
(i) Termination
of the Consultants engagement under this Agreement for "Cause" shall mean any
of
the following:
(A) any
act
that would constitute a material violation of this Agreement or Company’s
material written policies provided that the Company specifically terminates
the
Consultant’s engagement for Cause hereunder within 120 calendar days from the
date the Company has actual notice of such; or
(B) intentionally
engaging in conduct materially and demonstrably injurious to the Company
provided that the Company specifically terminates the Consultant’s engagement
for Cause hereunder within 120 calendar days from the date the Company has
actual notice of such.
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A
termination for Cause after a Change in Control shall be based only on events
occurring after such Change in Control; provided, however, the foregoing
limitation shall not apply to an event constituting Cause which was not
discovered by the Company prior to a Change in Control. Cause shall be
determined in good faith by the affirmative vote of a majority of the whole
Board of Directors (excluding any board member that may be affiliated with
the
Consultant).
(ii) "Change
in Control of the Company"
means
(A) a sale, transfer or exclusive licensing by the Company of all or
substantially all of the assets of the Company and its subsidiaries on a
consolidated basis (measured by either book value in accordance with United
States generally accepted accounting principles consistently applied or fair
market value determined in the reasonable good faith judgment of the Board)
in
any transaction or series of transactions (other than sales in the ordinary
course of business); (B) any sale, transfer or issuance or series of sales,
transfers and/or issuances of shares of the Company's capital stock by the
Company or any holders thereof which results in any Person or Persons, other
than the holders of Company’s capital stock as of the date hereof, owning
capital stock of the Company possessing the voting power (under ordinary
circumstances) to elect a majority of the Board of Directors; (C) the
stockholders of the Company approve a merger or consolidation of the Company
with any other corporation, other than a merger or consolidation which would
result in the voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) at least 50% of the
total voting power represented by the voting securities of the Company or such
surviving entity outstanding immediately after such merger or consolidation;
or
(D) the stockholders of the Corporation approve a plan of complete liquidation
of the Company.
(iii) “Good
Reason"
shall
mean termination by the Consultant due to: (a) the failure of the Company to
pay
any installment of the Base Fee or Referral Fee when such installment is due
pursuant to this Agreement, which failure is not cured within fifteen (15)
days;
or (b) any other breach or breaches of this Agreement by the Company, which
breaches are, singularly or in the aggregate, material, and which are not cured
within thirty (30) days of written notice of such breach or breaches to the
Company by the Consultant.
(b) Termination
by the Company Other Than Cause or by the Consultant for a Good
Reason.
In
addition to the payment to the Consultant of the Base Fee, the Referral Fees
and
the reimbursement of any applicable expenses pursuant to Section 4(c) through
the Date of Termination, if (i) the Consulting Period is terminated (A) by
the
Company for reasons other than Cause, or (B) by the Consultant for a Good
Reason, or (C) in accordance with the terms of Section 3(b) hereof (provided
the
Company provides the requisite notice to the Consultant to terminate prior
to
any Expiration Date); and (ii) the Consultant executes a general release in
the
form attached hereto as Exhibit
A
(the
"Release")
on or
before the effective Date of Termination; and (iii) the Consultant has not
breached the terms of the “Assignment Agreement” (as defined below); then the
Company shall pay the Consultant an amount equal to the Base Fee (at the rate
in
effect at the Date of Termination) for a period commencing on the Date of
Termination and on the Expiration Date; provided, however, that if the
Termination Date is within twelve (12) months of the Expiration Date, then
the
Company shall pay the Consultant an amount equal to the Base Fee (at the rate
effective as of the Termination Date), for a period commencing on the
Termination Date and ending on the first (1st) anniversary of the Termination
Date. Any payment under this Section
5(b)
shall be
made over time as though the Consultant continued to be retained by the Company.
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(c) Cooperation
with Company After Termination of Engagement.
For a
period of six (6) months following termination of the Consulting Period for
any
reason, as such period may be extended with the consent of Consultant, the
Consultant shall fully cooperate with the Company in all matters relating to
the
winding up of pending work on behalf of the Company including, but not limited
to, any litigation in which the Company is involved, and the orderly transfer
of
any pending work to the Company as may be designated by the Company. The
Consultant shall be compensated for any time spent pursuant to this Section
5(c)
at the specific request of the Company at a per diem amount based upon the
Base
Fee at the Date of Termination.
(d) Termination
by Mutual Consent.
Notwithstanding any of the foregoing provisions of this Section 5, if at any
time during the course of this Agreement the parties by mutual consent decide
to
terminate it, they shall do so by separate agreement setting forth the terms
and
conditions of such termination.
Section
6. Invention,
Assignment, Non-Compete and Confidentiality Agreement
The
parties hereto have entered into an Invention, Assignment, and Confidentiality
Agreement attached hereto as Exhibit
B
(the
"Assignment Agreement"), which may be amended by the parties from time to time
pursuant to the terms thereof. The provisions of the Assignment Agreement are
intended by the parties to survive and shall survive termination or expiration
of the Consulting Period and this Agreement.
Section
7. Non-Solicitation
Customers or Employees; Non-Competition
(a) Covenant
Not-to-Solicit Customers.
Subject
to Section 7(d) below, during Consultant’s engagement with the Company through
the applicable “Restrictive Period” (as hereinafter defined), the Consultant
shall not directly or indirectly, individually or on behalf of any other person
or entity, whether as principal, agent, stockholder, employee, consultant,
representative or in any other capacity, contact any person or entity,
which:
(i) is
a
customer or client of the Company or any of its subsidiaries as of the
Termination Date; or
(ii) has
been
a customer or client of the Company or any of its subsidiaries at any time
within two (2) years prior to the Termination Date; or
(iii) is
a
prospective customer or client that the Company or any of its subsidiaries
is
actively soliciting as of the Termination Date (for the purpose of selling
products or services similar to any of the products and services offered for
sale by the Company as of the Termination Date).
(b) Covenant
Not-to-Solicit Employees.
Subject
to Section 7(d) below, during Consultant’s engagement with the Company and from
the Termination Date through the applicable Restrictive Period , Consultant
shall not directly or indirectly, individually or on behalf of any other person
or entity, whether as principal, agent, stockholder, employee, consultant,
representative or in any other capacity:
6
(i) recruit,
solicit or encourage any person to leave the employ of the Company or any of
its
subsidiaries; or
(ii) hire
any
employee of the Company or any of its subsidiaries as a regular employee,
consultant, independent contractor or otherwise.
(c) Non-Competition.
Consultant recognizes and acknowledges the competitive and proprietary nature
of
the business operations of the Company and its subsidiaries. Subject to Section
7(d) below, during the Consultant’s engagement with the Company and for the
applicable Restrictive Period, Consultant shall not, without the prior written
consent of the Company, for itself or on behalf of any other person or entity,
directly or indirectly, whether as principal, agent, stockholder, employee,
consultant, representative or in any other capacity, own, manage, operate or
control, or be concerned, connected or employed by, or otherwise associate
in
any manner with, engage in or have a financial interest in any business that
competes with the business operations of the Company or any of its subsidiaries,
except that nothing contained herein shall preclude the Consultant from
purchasing or owning stock in any such competitive business if such stock is
publicly traded, and provided that his holdings do not exceed one percent (1%)
of the issued and outstanding capital stock of such business. Notwithstanding,
anything to the contrary contained in this Section 7, including, but not limited
to this Section 7(c), nothing in this Agreement shall preclude the Consultant,
or its employee and owner, C. Xxxxxx XxXxxxxx from owning, managing, operating,
controlling, or otherwise being involved or employed directly, or indirectly
by
CyberLynk Network, Inc.
(d) Reduction
and Extension of Restrictions.
(i) Notwithstanding
contained in Sections 7(a), 7(b) and 7(c) above the provisions of Sections
Sections 7(a), 7(b) and 7(c) above shall only apply to terminations made
pursuant to Section 5(a) and shall not apply with respect to terminations made
pursuant to Section 5(b).
(ii) The
Company at Company’s option, by written notice delivered to Consultant not less
than thirty (30) days prior to the expiration of the then current, applicable
Restrictive Period, may extend the Restrictive Period (as previously extended
under this Section 7.4(b)) for an additional twelve (12) months, provided that
Company pays to Consultant during the extended Restrictive Period an amount
equal to the Consultant’s Base Fee (at the rate effective as of the applicable
Termination Date and over time and in the manner Consultant would have received
these payments had it continued to be engaged by the Company.
(e) Definition
of Restriction Period.
For
purposes of this Agreement the term “Restrictive Period” shall have the
following meanings.
(i) If
Consultant’s engagement under this Agreement is terminated prior to the third
(3rd) anniversary of the Closing Date, then the Restrictive Period shall be
the
period from the Termination Date through the third anniversary of the Closing
Date (or if the Termination Date is within twelve (12) months of the third
anniversary of the Closing Date, then for a period of one (1) year measured
from
the Termination Date through the first anniversary of the Termination Date).
7
(ii) Subject
to Section 7(d) above, if Consultant’s engagement is terminated after the third
anniversary of the Closing Date, then the Restrictive Period shall be the twelve
month period measured from the Termination Date through the first anniversary
of
the Termination Date.
(f) Non-Disparagement.
The
Consultant agrees not to make any public statement, or engage in any conduct,
that is disparaging to the Company, or any of its employees, officers, directors
or shareholders, including, but not limited to, any statement that disparages
the products, services, finances, financial condition, capabilities or other
aspects of the business of the Company. Notwithstanding any term to the contrary
herein, the Consultant and its employees shall not be in breach of this Section
7 for the making of any truthful statements under oath.
(g) Reasonableness
of Restrictions.
The
Consultant has carefully read and considered the provisions of this Section
7,
and, having done so, agrees (i) that the restrictions set forth herein are
reasonable, in terms of scope, duration, geographic area, and otherwise, (ii)
that the protection afforded to the Company hereunder is necessary to protect
its legitimate business interests, (iii) that the agreement to observe such
restrictions form a material part of the consideration for this Agreement and
the Consultant’s engagement by the Company and (iv) that upon the termination of
the Consultant’s engagement with the Company for any reason, Consultant will be
able to continue in its business without violating the foregoing restrictions.
In the event that, notwithstanding the foregoing, any of the provisions of
this
Section 7 shall be held to be invalid or unenforceable, the remaining provisions
thereof shall nevertheless continue to be valid and enforceable as though the
invalid or unenforceable parts had not been included therein. In the event
that
any provision of this Section relating to the time period and/or the areas
of
restriction and/or related aspects shall be declared by a court of competent
jurisdiction to exceed the maximum restrictiveness such court deems reasonable
and enforceable, the time period and/or areas of restriction and/or related
aspects deemed reasonable and enforceable by the court shall become and
thereafter be the maximum restriction in such regard, and the restriction shall
remain enforceable to the fullest extent deemed reasonable by such
court.
Section
8. Consultant’s
Representations and Warranties
(a) Enforceability.
Consultant hereby represents and warrants to the Company that upon the execution
and delivery of this Agreement by the Company, this Agreement shall be the
valid
and binding obligation of Consultant, enforceable in accordance with its
terms.
(b) No
Breach; No Conflict of Interest.
Consultant hereby represents and warrants to the Company that (i) the execution,
delivery and performance of this Agreement by Consultant do not and shall not
conflict with, breach, violate or cause a default under any contract, agreement,
instrument, order, judgment or decree to which Consultant is a party or by
which
Consultant is bound and (ii) Consultant is not, to the best of Consultant's
knowledge and belief, involved in any situation that might create, or appear
to
create, a conflict of interest with loyalty to or duties for the
Company.
(c) Notification
of Materials or Documents from Other Customers and Clients.
Consultant hereby represents and warrants to the Company that Consultant has
not
brought and will not bring to the Company or use in the performance of
responsibilities at the Company any materials or documents of a former customer
or client that are not generally available to the public, unless Consultant
has
obtained express written authorization from the former customer or client and
the Company for their possession and use.
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Section
9. Arbitration
(a) Consultant
and the Company mutually consent to the resolution by arbitration of certain
claims or controversies (collectively, "Claims")
arising out of or relating to Consultant's engagement or termination of
engagement under this Agreement that either party may have against the other,
including the Company’s officers, shareholders, directors, employees, or benefit
plans, the benefit plans' sponsors, fiduciaries, administrators, or affiliates;
and all successors and assigns of any of them, or agents in their capacity
as
such or otherwise. The Claims covered by this Agreement shall include claims
for
(i) wages or other compensation due; (ii) breach of any contract or covenant
(express or implied); tort claims; (iii) discrimination (including but not
limited to race, sex, religion, national origin, age, disability, citizenship,
marital status, or any other basis protected by any applicable federal, state
or
local law); (iv) payment of wages; (v) benefits (except where an employee
benefit or pension plan specifies that its claims procedure shall use an
arbitration procedure different from this one); and (vi) violation of any
federal, state, or local law, statute, regulation, or ordinance, or recognized
under common law.
(b) The
arbitration shall be governed by the procedures of the American Arbitration
Association ("AAA"),
in
accordance with its then-current Model Employment Arbitration Procedures and
shall take place in the Washington-Metropolitan area.
(c) If
the
parties to this Agreement become parties to an arbitration proceeding or
litigation arising from or relating to this Agreement, the non-prevailing party
shall pay the reasonable attorneys’ fees and costs incurred by the prevailing
party in such arbitration or litigation.
Section
10. Indemnification.
(a) The
Company agrees to indemnify and hold harmless Consultant and Consultant
Personnel against and from any and all claims, liabilities, losses, costs,
damages, expenses, judgments, fines and amounts paid in settlement (including
reasonable attorneys’ fees), arising from any source, including, without
limitation, from any threatened, pending or completed actions or lawsuits
whether civil, criminal, administrative or investigative, by or in the right
of
the Company to procure a judgment in its favor, arising from the performance
of
the Services, except insofar as such may arise solely from the indemnified
party’s gross negligence or intentional wrongdoing (including intentional
violation of applicable national security requirements). The Company shall
be
entitled to direct the defense of any claim for which Consultant alleges that
it
is obligated to provide indemnification, at the Company’s expense, but such
defense shall be conducted by legal counsel mutually agreed to by the Company
and Consultant. The Company agrees to keep Consultant informed on a timely
basis
of the status of all legal proceedings relating to this indemnification and
shall provide copies of all documents relating to the legal proceedings to
Consultant or, at Consultant’s request, its legal counsel. The Company further
agrees that it will not settle, compromise or consent to the entry of any
judgment in any pending or threatened claim, action or proceeding without the
prior written consent of Consultant. Consultant agrees to promptly notify the
Company of any proceeding or investigation which may be the subject of an
indemnity demand hereunder. The failure to provide such prompt notice shall
not
affect the Company’s obligation to provide indemnity hereunder except to the
extent that a court of competent jurisdiction shall have determined by a final
judgment that such failure primarily and directly adversely prejudiced in a
material respect the defense of the claim by the Company.
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(b) Expenses
incurred in defending any threatened or pending civil, criminal, administrative
or investigative action, suit or proceeding shall be paid by the Company in
advance of the final disposition of such action, suit or proceeding, upon
receipt of an undertaking by or on behalf of the indemnified party to repay
such
amount if it is ultimately determined, in a final non-appealable judgment of
a
court of competent jurisdiction, that the indemnified party is not entitled
to
be indemnified against such expenses solely as a result of the indemnified
party’s gross negligence or intentional wrongdoing. This undertaking by the
indemnified party shall be an unqualified general undertaking, and no security
for such undertaking will be required.
(c) All
of
Consultant’s and the other indemnified parties’ rights and obligations under
this Section
10
will
continue even after this Agreement has been terminated for any
reason.
Section
11. Injunctive
Relief.
The
Consultant represents and acknowledges that, in light of the payments to be
made
by the Company to the Consultant hereunder and for other good and valid reasons,
as a result of the restrictions stated in the Assignment Agreement and the
Restrictions in Section 7 above, the Company and its affiliated companies would
sustain irreparable harm and, therefore, in addition to any other remedies
which
the Company may have under this Agreement or otherwise, the Company shall be
entitled to apply to any court of competent jurisdiction for an injunction
restraining the Consultant from committing or continuing any such violation
of
this Agreement, and the Consultant shall not object to such
application.
Section
12. Nature
of Consultant’s Undertaking: No Joint Venture or
Partnership.
Consultant shall act as an independent contractor and shall have complete charge
of its personnel engaged in the performance of the Services. The Company and
Consultant hereby agree that neither Consultant’s entering into this Agreement
nor Consultant’s provision of Services to the Company and its Subsidiaries shall
be construed to have created either a joint venture or a partnership for the
purpose of providing such Services.
Section
13. Notices.
All
notices, requests and other communications hereunder must be in writing and
will
be deemed to have been duly given only if delivered personally, sent postage
prepaid, by registered, certified or express mail or reputable overnight courier
service to the parties at the following addresses:
if
to the
Company, to:
0000
Xxxxx Xxxxxxx Xxxxx
Xxxxx
0000
Xxxxxxxxx,
Xxxxxxxx 00000
Attention: Xxxxxx
X. Xxxxx, Chairman of the Board
10
with
a
copy to:
Squire,
Xxxxxxx & Xxxxxxx L.L.P.
0000
Xxxxxx Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx
Xxxxxx, XX 00000
Attn:
Xxxxx X. Xxxxxxx
Fax:
(000) 000-0000
if
to
Consultant, to:
Washington
Capital Advisors, Inc.
0000
Xxxxx Xxxxxxx Xxxxx
Xxxxx
0000
Xxxxxxxxx,
Xxxxxxxx 00000
Attn:
C.
Xxxxxx XxXxxxxx
Fax:
(000) 000 0000
All
such
notices, requests and other communications will (a) if delivered personally
to
the address as provided in this Section
13
be
deemed given upon delivery, (b) if delivered by mail in the manner described
above to the address as provided in this Section
13,
be
deemed given upon receipt, and (c) if delivered by overnight express mail or
reputable overnight courier service, be deemed given one Business Day after
mailing (in each case regardless of whether such notice is received by any
other
Person to whom a copy of such notice, request or other communication is to
be
delivered pursuant to this Section
13).
Any
party from time to time may change its address or other information for the
purpose of notices to that party by giving notice specifying such change to
the
other party hereto
Section
14. Agreement.
This
Agreement (a) contains the complete and entire understanding and agreement
of
Consultant and the Company respecting the subject matter hereof; (b) supersedes
and cancels all other understandings or agreements, oral or written, respecting
the subject matter hereof; and (c) may not be modified except by an instrument
in writing executed by Consultant and the Company.
Section
15. Waiver.
No
failure or delay on the part of any party hereto in exercising any rights,
power
or remedy hereunder shall operate as a waiver thereof, nor shall any single
or
partial exercise of such right, power or remedy preclude any other or further
exercise thereof or exercise of any other right, power or remedy. The remedies
provided herein are cumulative and are not exclusive of any remedies that may
be
available to such party at law, in equity or otherwise.
11
Section
16. Successors,
Assignment, Third Party Beneficiaries.
Consultant and the Company may not assign their respective rights or obligations
under this Agreement without the express written consent of the other party.
This Agreement and all the provisions hereof shall be binding upon and inure
to
the benefit of the parties hereto and their respective successors and permitted
assigns. No person other than the parties hereto (and other than the indemnified
parties specified in Section
10)
is
intended to be a beneficiary of this Agreement.
Section
17. Severability.
If any
provision of this Agreement is determined to be invalid or unenforceable in
whole, or in part, such invalidity or unenforceability shall attach only to
such
provision or part of such provision and all other provisions of this Agreement
shall continue in full force and effect.
Section
18. Section
Headings.
All
section headings herein have been inserted for convenience of reference only
and
shall in no way modify or restrict any of the terms or provisions
hereof.
Section
19. Governing
Law.
This
Agreement shall be governed by, and construed in accordance with, the internal
laws of the State of Maryland, without regard to conflicts of law
principles.
IN
WITNESS WHEREOF, the Company and Consultant have caused this Agreement to be
duly executed and delivered on the date and year first above
written.
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By:
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/s/
Xxxxxx X. Xxxxx
|
|
|
Name:
Xxxxxx X. Xxxxx
|
||
|
Title:
Chief Executive Officer
|
||
|
WASHINGTON
CAPITAL ADVISORS, INC.
|
||
|
s/s
C. Xxxxxx XxXxxxxx, CEO
|
||
12
EXHIBIT
A
RELEASE
1. This
agreement is between the Washington Capital Advisors, Inc. (“Consultant”) and
Fortress International Group, Inc., formerly Fortress America Acquisition
Corporation, a Delaware corporation (“FIG”).
2. The
Consultant, deeming this Agreement to be fair, reasonable, and equitable, and
intending to be legally bound hereby, agrees to and hereby does, forever and
irrevocably fully release and discharge Company, its subsidiaries, affiliated
entities, direct or indirect owners and its and their respective officers,
directors, employees, agents, predecessors, successors, purchasers, assigns,
representatives, fiduciaries, and insurers (jointly, the "Released Parties")
from any and all grievances, liens, suits, judgments, claims, demands, debts,
defenses, actions or causes of action, obligations, damages (whether
compensatory, punitive or otherwise), and liabilities whatsoever which the
Consultant now has, has had, or may have, whether the same be known or unknown,
vested or contingent, at law, in equity, or mixed, in any way arising out of
or
relating in any way to any matter, act, occurrence, or transaction before the
date of this General Release Agreement, including but not limited to Consulting
Agreement with the Company (collectively, "Claims"). This
is a General Release.
The
Consultant expressly acknowledges that this General Release includes, but is
not
limited to, the Consultant's release of any tort and contract claims and
arbitration claims. Also, the Consultant understands that this General Release
Agreement is not an admission of liability under any statute or otherwise by
the
Released Parties, and that the Released Parties do not admit but deny any
violation of his legal rights, and that it shall not be regarded as a prevailing
party for any purpose, including but not limited to, determining responsibility
for or entitlement to attorneys’ fees, under any statute or otherwise. The
Consultant agrees that in the event the Consultant brings a Claim in which
the
Consultant seeks damages or other relief from any Released Party, or in the
event the Consultant seeks to recover against any Released Party in any Claim
brought by a governmental agency on the Consultant’s behalf, this Agreement
shall serve as a complete defense to such Claims.
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3. The
Consultant also agrees that the Consultant has been paid for all services
rendered and has submitted all invoices and expense reports.
4. The
Consultant agrees that every term of this Agreement, including, but not limited
to, the fact that an agreement has been reached and the amount paid, shall
be
treated by the Consultant as strictly confidential, and expressly covenants
not
to display, publish, disseminate, or disclose the terms of this Agreement to
any
person or entity other than the Consultant’s attorney(s) (for purposes of
seeking advice concerning this agreement only) and the Consultant’s
accountant(s) (for purposes of seeking tax advice only), unless compelled to
make disclosure by lawful court order or subpoena.
5. The
Consultant and the Company have entered into an Assignment of Invention,
Non-Disclosure, Non-Solicitation and Non-Competition Agreement ("NDA
Agreement"). The Consultant reaffirms its obligation to comply with all of
the
post termination obligations in the NDA Agreement.
6. The
Consultant also agrees that:
· The
Consultant is entering into this agreement knowingly and
voluntarily;
· The
Consultant has been advised by the Company to consult an attorney;
· But
for
the Consultant's execution of this agreement, the Consultant would not otherwise
be entitled to the payments described in paragraph 2;
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2
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· If
any
part of this agreement is found to be illegal or invalid, the rest of the
agreement will be enforceable; and
|
CONSULTANT:
|
COMPANY:
|
|||
|
WASHINGTON
CAPITAL ADVISORS, INC.
|
||||
|
[NAME
AND TITLE]
|
||||
|
Date:
|
Date:
|
|||
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3
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Accepted
and Agreed to:
Fortress
International Group, Inc.
By:
_______________________________
Name:
Xxxxxx X. Xxxxx
Title:
Chairman
Date:
______________________________
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4
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EXHIBIT
B
INVENTION
ASSIGNMENT, NON-COMPETE
AND
CONFIDENTIALITY AGREEMENT
The
following confirms an Invention Assignment, Non-Compete and Confidentiality
Agreement ("Agreement") between Washington Capital Advisors, Inc. (“WCA”)
and
Fortress International Group, a Maryland corporation (the "Company," which
term
includes the Company’s Affiliates, subsidiaries and any assigns). The promises
and commitments that WCA makes in this Agreement are a material part of the
Company’s consideration in WCA’s consulting relationship with the
Company.
|
1.
|
WCA
understands and agrees that its engagement as a consultant to the
Company
creates a duty of loyalty and a relationship of confidence and
trust
between it and the Company with respect to any information made
known to
WCA by the Company or by any client, customer or vendor of the
Company or
other person who submits information to the Company, or which may
be
learned by me during the period of its
engagement.
|
|
2.
|
WCA
recognizes that the Company is continuously engaged in activities
that the
Company regards as confidential, proprietary and/or legally protectable,
which activities are at least in part intended to further the interests
of
the Company and to provide the Company with a competitive advantage.
The
Company possesses and will, in the future, continue to possess
information
that has been or will be created, discovered, developed or otherwise
becomes known to the Company (including information created by,
discovered
or developed by, or made known to WCA) during the period of or
arising out
of WCA’s engagement with the Company. WCA understands that various
intellectual and other property rights have been assigned or otherwise
conveyed to the Company. All information concerning the above described
activities and information is collectively called "Proprietary
Information" under this Agreement.
|
|
3.
|
By
way of illustration, but not limitation, Proprietary Information
includes:
trade secrets, processes, formulas, data and know-how; software
programs,
improvements, and inventions; research and development plans, tools
and
techniques; new product introduction plans, specifications, requirements
documents and strategies; manufacturing techniques, strategies
and costs,
expenses, supplier information and lists and distribution information;
terms and conditions in contracts of all kinds; marketing plans,
strategies and service; support strategies and procedures; development
schedules; revenue forecasts; computer programs; copyrightable
material,
employee salaries, employee expertise, employee ability levels,
training
programs and procedures, copies of memos or presentations incorporating
confidential information which WCA may have in its files (including
those
authored by WCA or its employees and contractors), patent applications
and
disclosures and customer lists.
|
|
4.
|
In
consideration of WCA’s engagement by the Company and the compensation
received by WCA from the Company from time to time, WCA hereby
agrees as
follows:
|
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1
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(a)
|
All
Proprietary Information shall be the sole property of the Company,
and the
Company shall be the sole owner of all patents, copyrights, trademarks
and
other rights related to Proprietary Information. WCA hereby assigns
to the
Company any rights WCA may have or acquire in Proprietary Information.
At
all times, both during and after WCA’s engagement by the Company, WCA will
keep in confidence and trust all Proprietary Information, and WCA
will not
use or disclose any Proprietary Information or anything related
to it
without written consent of the Company, except as may be necessary
in the
ordinary course of performing WCA’s duties to the
Company.
|
|
(b)
|
All
documents, records, apparatus, equipment and other physical property,
whether or not pertaining to Proprietary Information, furnished
to WCA by
the Company or produced by WCA or others in connection with their
provision of services to the Company shall be and remain the sole
property
of the Company, shall be used by WCA solely for the benefit of
the Company
and shall be returned to the Company immediately as and when requested
by
the Company. Even if the Company does not so request, WCA shall
return and
deliver all such property to the Company upon termination of WCA’s
consulting engagement with the Company. WCA will not take with
WCA any
such property or any form of copy or reproduction of such property
upon
Consultant’s termination of the consulting
relationship.
|
|
(c)
|
WCA
will promptly disclose to the Company, or any persons designated
by it,
all improvements, inventions, formulas, ideas, processes, techniques,
know-how and data, whether or not patentable, made or conceived
or reduced
to practice or learned by WCA, either alone or jointly with others,
during
the period of WCA’s consulting engagement (all said improvements,
inventions, formulas, ideas, processes, techniques, know-how and
data
shall be hereinafter collectively call
"Inventions").
|
|
(d)
|
WCA
agrees that all Inventions that WCA develops or has developed (in
whole or
in part, either alone or jointly with others) and (i) use or has
used
equipment, supplies, facilities or trade secret information of
the
Company, or (ii) use or has used the hours for which WCA is to
be or was
compensated by the Company, or (iii) which relate to the business
of the
Company or to its actual or demonstrably anticipated research and
development or (iv) which result, in whole or in part, from work
performed
by WCA for the Company shall be the sole property of the Company
and its
assigns, and the Company and its assigns shall be the sole owner
of all
patents, copyrights and other rights in connection therewith. WCA
hereby
assigns to the Company any rights WCA may have or acquire in such
Inventions. WCA further agree as to all such inventions and improvements
to assist the Company in every proper way (but at the Company’s expense)
to obtain and from time to time enforce patents, copyrights or
other
rights on said inventions and improvements in any and all countries,
and
to that end WCA will execute all documents in use for applying
for and
obtaining such patents and copyrights thereon and enforcing same,
as the
Company may desire, together with any assignments thereof to the
Company
or persons designated by it. WCA’s obligation to assist the Company in
obtaining and enforcing patents, copyrights or other rights for
such
inventions and improvements in any and all countries shall continue
beyond
the termination of WCA’s consulting engagement with the Company, but the
Company shall compensate WCA at a reasonable rate after such termination
for time actually spent by WCA at the Company’s request on such
assistance.
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2
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(e)
|
In
the event that the Company is unable for any reason whatsoever
to secure
WCA’s signature to any lawful and necessary document required to apply
for
or execute any patent, copyright or other applications with respect
to
such inventions and improvements (including renewals, extensions,
continuations, divisions or continuations in part thereof), WCA
hereby
irrevocably designates and appoints the Company and its authorized
officers and agents, as Consultant’s agents and attorneys-in-fact, this
power of attorney being coupled with an interest, to act for and
in its
behalf and instead of WCA, to execute and file any such application
and to
do all other lawfully permitted acts to further the prosecution
and
issuance of patents, copyrights or other rights thereon with the
same
legal force and effect as if executed by
WCA.
|
|
(f)
|
WCA
represents that its performance of all the terms of this Agreement
will
not breach any agreement to keep in confidence proprietary information
acquired by WCA in confidence or in trust prior to its engagement
with the
Company. WCA has not entered into, and WCA agrees that WCA will
not enter
into, any agreement either written or oral in conflict with this
Agreement.
|
|
(g)
|
WCA
acknowledges that the Company from time to time may be involved
in
government projects of a classified nature. WCA further acknowledges
that
the Company from time to time may have agreements with other persons
or
governmental agencies which impose obligations or restrictions
on the
Company regarding inventions made during the course of work thereunder
or
regarding the confidential nature of such work or information disclosed
in
connection therewith. WCA agrees to be bound by all such obligations
and
restrictions and to take all action necessary to discharge the
obligations
of the Company thereunder.
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(h)
|
WCA
represents and warrant that execution of this Agreement, its engagement
as
a consultant to the Company and its performance of its consulting
responsibilities to the Company in the development of its business
have
not and will not violate any obligations which WCA may otherwise
have.
|
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(i)
|
WCA
agrees that at no time during its engagement as a consultant to
the
Company or thereafter shall WCA make, or cause or assist any other
person
to make, any statement or other communication to any third party
which
impugns or attacks, or is otherwise critical of, the reputation,
business
or character of the Company or any of its Affiliates or any of
their
respective directors, officers or
employees.
|
|
5.
|
This
Agreement shall be effective as of the first day of Consultant’s
engagement by the Company.
|
|
6.
|
This
Agreement may not be changed, modified, released, discharged, abandoned
or
otherwise amended, in whole or in part, except by an instrument
in
writing, signed by WCA and a majority of the members of the Board.
WCA
agrees that any subsequent change or changes in WCA’s duties or
compensation shall not affect the validity or scope of this
Agreement.
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7.
|
WCA
acknowledges receipt of this Agreement and agrees that with respect
to the
subject matter hereof it is its final, complete and exclusive agreement
with the Company, superseding any previous oral or written
representations, understanding or agreements with the Company or
any
officer or representative with respect to the subject matter
herein.
|
|
8.
|
In
the event that any paragraph or provision of this Agreement shall
be held
to be illegal or unenforceable, such paragraph or provision shall
be
modified to the extent necessary to give effect to the intent of
the
parties or, if necessary, severed from this Agreement and the entire
Agreement shall not fail on account thereof, but shall otherwise
remain in
full force and effect.
|
|
9.
|
This
Agreement shall be construed in accordance with the laws of the
State of
Maryland without regard to its choice of law
principles.
|
|
10.
|
This
Agreement shall be binding upon WCA and its successors and assigns
and
shall inure to the benefit of the Company, its successors and
assigns.
|
WCA
acknowledges that the foregoing restrictions contained in Section
4
are
reasonable in all respects including the scope, duration and geographic
limitations. WCA agrees that the restrictions are an appropriate means of
protecting the Company’s legitimate business interests, and no greater than
necessary to protect the Company’s interests.
Dated:
__________ _____, 2006
|
WASHINGTON
CAPITAL ADVISORS, INC.
|
|
|
By:_____________________________________
|
|
|
Name:___________________________________
|
|
|
Title:____________________________________
|
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4
-
Accepted
and Agreed to:
Fortress
International Group, Inc.
By:
___________________________________
Name:
Xxxxxx X. Xxxxx
Title:
Chairman
Date:
__________________________________
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5
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