CONSULTING AGREEMENT
EXHIBIT
99.1
THIS
CONSULTING AGREEMENT (the “Agreement”) is entered into this 5th day of January
2007 by World Energy Solutions, Inc., a
Delaware corporation with offices at 000 Xxxx Xxxxxx, Xxxxxxxxx, XX 00000 (the
“Company”), and Xxxxxxx Xxxxxxxx (the “Consultant”).
WHEREAS,
the Company desires to retain the services of the Consultant and the Consultant
desires to perform certain services for the Company; and
WHEREAS,
the Consultant is in the business of providing such services and has agreed
to
provide such services pursuant to the terms and conditions set forth in this
Agreement;
NOW,
THEREFORE in consideration of the mutual covenants and promises contained herein
and other good and valuable consideration, the receipt and sufficiency which
are
hereby acknowledged by the parties hereto, the parties agree as
follows:
1. Services
To Be Performed.
Unless
sooner terminated in accordance with Section 4 below, commencing on January
2,
2007 (the “Effective Date”) and until April 1, 2007 (the “Consultation Period”),
the Consultant agrees to perform such services as may be reasonably requested
by
the Company from time to time, including, without limitation, the services
set
forth on Exhibit
A.
Such
services are collectively referred to herein as the “Services”. The Consultant
agrees to use its best efforts in the performance of the Services and agrees
to
cooperate with the Company’s personnel, not to interfere with the conduct of the
Company’s business and to observe all rules, regulations and security
requirements of the Company.
2. Consultant.
It is
the express intention of the parties to this Agreement that the Consultant
is an
independent contractor and not an employee, agent, joint venturer or partner
of
the Company for any purposes whatsoever. The Consultant shall not be entitled
to
any benefits that the Company may make available to employees from time to
time.
The Consultant shall be solely responsible for all state and federal income
taxes, unemployment insurance and social security taxes and for maintaining
adequate workers’ compensation insurance coverage for himself.
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Performance
of Services.
The Consultant shall have the right to control and determine the
time,
place, methods, manner and means of performing the Services. In performing
the Services, the amount of time devoted by the Consultant on any
given
day will be entirely within the Consultant’s control, and the Company will
rely on the Consultant to put in the necessary number of hours as
are
necessary to fulfill the requirements of the Agreement.
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| (b) |
Final
Results.
In the performance of the Services, the Consultant has the authority
to
control and direct the performance of the details of the Services,
the
Company being interested only in the results obtained. However, the
Services contemplated by this Agreement must meet the Company’s standards
and approval and shall be subject to the Company’s general right of
inspection and supervision to secure their satisfactory completion.
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| (c) |
Non-Exclusivity.
The Consultant retains the right to contract with other companies
or
entities for its consulting services without restriction. Likewise,
the
Company retains a reciprocal right to contract with other companies
and/or
individuals for consulting services without restriction.
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| (d) |
Scope
of Authority.
The Consultant is not authorized to assume or create any obligation
or
responsibility, express or implied, on behalf of, or in the name
of, the
Company or to bind the Company in any manner. The Consultant shall
not use
the Company's trade names, trademarks, service names or servicemarks
without the prior approval of the Company. The Consultant is not
authorized to transact business, incur obligations, sell goods, receive
payments, solicit orders or assign or create any obligation of any
kind,
express or implied, on behalf of the Company or any of the Company's
related or affiliated entities, or to bind in any way whatsoever,
or to
make any promise, warranty or representation on behalf of the Company
or
any of the Company's related or affiliated entities with respect
to any
matter, except as expressly authorized in this Agreement or in another
writing signed by an authorized representative of the Company.
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| (e) |
Evidence
of Federal Tax Return Filing.
The Consultant agrees to furnish to the Company, by no later than
May 15
of the year after the calendar year in which compensation is paid,
evidence that the income received from the Company for independent
contractor duties was reported consistent with the reporting requirements
of an independent contractor. The Company shall file Form 1099 to
report
the compensation paid to the Consultant.
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3. Consulting
Fees and Reimbursement of Expenses.
The
Consultant shall submit to the Company monthly statements, in a form
satisfactory to the Company, of Services performed for the Company in the
applicable time period. The Company shall pay to the Consultant a maximum
monthly consulting fee of eighteen thousand dollars ($18,000). Payment for
any
partial month shall be prorated. Consultant shall provide a monthly statement
of
work performed in the prior month within 10 days of the end of each month.
The
statement shall contain the Consultant’s social security number or employer
identification number, address, and a brief description of the Services
performed. The Company shall reimburse the Consultant for all reasonable travel
and other out-of-pocket expenses incurred by the Consultant in rendering
Services under this Agreement. In addition, the Consultant shall be entitled
to
receive an additional payment in accordance with the provisions of Exhibit
B
upon
satisfaction of the criteria set forth in such Exhibit.
4. Termination.
The
Company may, without prejudice to any right or remedy it may have due to any
failure of the Consultant to perform its obligations under this Agreement,
terminate the Consultation Period with 30-days written notice to the Consultant.
In the event of termination, the Consultant shall be entitled to payment for
Services performed and expenses paid or incurred prior to the effective date
of
termination. Such payments shall constitute full settlement of any and all
claims of the Consultant of every description against the Company.
Notwithstanding the foregoing, the Company may terminate the Consultation
Period, effective immediately upon receipt of written notice, if the Consultant
breaches any provision of this Agreement or threatens to breach any provision
of
Section 5 or 6 below.
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5. Non-Competition
and Non-Solicitation.
During
the Consultation Period and for twelve (12) months immediately thereafter,
the
Consultant shall not engage in any business or enterprise (whether as owner,
partner, officer, director, employee, consultant, investor, lender or otherwise,
except as the holder of not more than 1% of the outstanding stock of a
publicly-held company) that is competitive with the Company’s business. During
the Consultation Period and for twelve (12) months immediately thereafter,
the
Consultant shall not, alone or in association with others (i) solicit, or
permit any organization directly or indirectly controlled by the Consultant
to
solicit, any employee of the Company to leave the employ of the Company, or
(ii)
solicit for employment, hire or engage as an independent contractor, or permit
any organization directly or indirectly controlled by the Consultant to solicit
for employment, hire or engage as an independent contractor, any employee or
consultant of the Company to leave the employ of, or terminate engagement with,
the Company. The Consultant acknowledges that any breach of the provisions
of
this Section 5 shall result in serious and irreparable injury to the Company
for
which the Company cannot be adequately compensated by monetary damages alone.
The Consultant agrees, therefore, that, in addition to any other remedy it
may
have, the Company shall be entitled to enforce the specific performance of
this
Agreement by the Consultant and to seek both temporary and permanent injunctive
relief (to the extent permitted by law) without the necessity of proving actual
damages.
6. Inventions
and Proprietary Information
(a) Inventions.
All
inventions, discoveries, data, technology, innovations and improvements
(“Inventions”) which are made, conceived, reduced to practice, created, written,
designed or developed by the Consultant, solely or jointly with others and
whether during normal business hours or otherwise, (i) during the Consultation
Period if related to the business of the Company or (ii) after the Consultation
Period if resulting or directly derived from Proprietary Information (as defined
below), shall be the sole property of the Company. The Consultant hereby assigns
to the Company all Inventions and any and all related patents, copyrights,
trademarks, trade names, and other intellectual property rights and applications
therefor, in the United States and elsewhere and appoints any officer of the
Company as its duly authorized attorney to execute, file, prosecute and protect
the same before any government agency, court or authority. Upon the request
of
the Company and at the Company’s expense, the Consultant shall execute such
further assignments, documents and other instruments as may be necessary or
desirable to fully and completely assign all Inventions to the Company and
to
assist the Company in applying for, obtaining and enforcing patents or
copyrights or other rights in the United States and in any foreign country
with
respect to any Invention. The Consultant also hereby waives all claims to moral
rights in any Inventions. The Consultant shall promptly disclose to the Company
all Inventions and will maintain adequate and current written records to
document the conception and/or first actual reduction to practice of any
Invention. Such written records shall be available to and remain the sole
property of the Company at all times.
(b) Proprietary
Information.
The
Consultant acknowledges that its relationship with the Company is one of high
trust and confidence and that in the course of its service to the Company it
will have access to and contact with Proprietary Information. The Consultant
agrees that it will not, during the Consultation Period or at any time
thereafter, disclose to others, or use for its benefit or the benefit of others,
any Proprietary Information. For purposes of this Agreement, Proprietary
Information shall mean, by way of illustration and not limitation, all
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information
(whether or not patentable and whether or not copyrightable) owned, possessed
or
used by the Company, including, without limitation, any Invention, formula,
vendor information, customer information, apparatus, equipment, trade secret,
process, research, report, technical data, know-how, computer program, software,
software documentation, hardware design, technology, marketing or business
plan,
forecast, unpublished financial statement, budget, license, price, cost and
employee list that is communicated to, learned of, developed or otherwise
acquired by the Consultant in the course of its service as a consultant to
the
Company.
7. Other
Agreements.
The
Consultant hereby represents that, except as the Consultant has disclosed in
writing to the Company, the Consultant is not bound by the terms of any
agreement with any third party to refrain from using or disclosing any trade
secret or confidential or proprietary information in the course of its
consultancy with the Company, to refrain from competing, directly or indirectly,
with the business of such third party or to refrain from soliciting employees,
customers or suppliers of such third party. The Consultant further represents
that its performance of all the terms of this Agreement and the performance
of
its duties as a consultant of the Company do not and will not breach any
agreement with any third party to which the Consultant is a party (including
without limitation any nondisclosure or non-competition agreement), and that
the
Consultant will not disclose to the Company or induce the Company to use any
confidential or proprietary information or material belonging to any previous
employer or others.
8. Return
of Company Property.
Upon
termination or expiration of this Agreement or at any other time upon request
by
the Company, the Consultant shall promptly deliver to the Company all records,
files, memoranda, notes, designs, data, reports, price lists, customer lists,
drawings, plans, computer programs, software, software documentation, sketches,
laboratory and research notebooks and other documents (and all copies or
reproductions of such materials) in its possession, custody or control relating
in any way to the business or prospective business of the Company.
9. Indemnification.
The
Consultant shall be solely liable for, and shall indemnify and hold harmless
the
Company and its successors and assigns from any claims, suits, judgments or
causes of action initiated by any third party against the Company where such
claim, suit, judgment or cause of action results from or arises out of the
work
performed by the Consultant under this Agreement. The Consultant shall further
indemnify, defend and hold harmless the Company and its successors and assigns
from and against any and all loss or damage resulting from any
misrepresentation, or any non-fulfillment of any representation, responsibility,
covenant or agreement on its part, as well as any and all acts, suits,
proceedings, demands, assessments, penalties, judgments of or against Company
relating to or arising out of the activities of the Consultant and the
Consultant shall pay reasonable attorneys’ fees, costs and expenses.
10. Cooperation.
The
Consultant shall use its best efforts in the performance of its obligations
under this Agreement. The Company shall provide such access to its information
and property as may be reasonably required in order to permit the Consultant
to
perform its obligations hereunder. The Consultant shall cooperate with the
Company’s personnel, shall not interfere with the conduct of the Company’s
business and shall observe all rules, regulations and security requirements
of
the Company concerning the safety of persons and property.
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11. Non-Assignability
of Contract.
This
Agreement is personal to the Consultant and it shall not have the right to
assign any of its rights or delegate any of its duties without the express
written consent of the Company ;
provided,
that in
the event that the Consultant establishes a partnership, corporation or other
entity, one purpose of which is to provide the Services, the Consultant may
assign this Agreement to such partnership, corporation or other business entity
with the advance written consent of the Company. Any
purported assignment or delegation, whether express or implied or by operation
of law, without the advance written consent of the Company shall be void and
shall constitute a breach of, and a default under, this Agreement by the
Consultant.
12. Notices.
All
notices required or permitted under this Agreement shall be in writing and
shall
be deemed effective upon personal delivery or upon deposit in the United States
Post Office, by registered or certified mail, postage prepaid, addressed to
the
other party at the address shown above, or at such other address or addresses
as
either party shall designate to the other in accordance with this section.
13. Complete
Agreement.
This
Agreement contains the entire understanding between the parties and supersedes,
replaces and takes precedence over any prior understanding or oral or written
agreement between the parties respecting the subject matter of this Agreement.
There are no representations, agreements, arrangements, nor understandings,
oral
or written, between the parties relating to the subject matter of this Agreement
that are not fully expressed herein.
14. Severability.
In the
event any provision of this Agreement shall be held invalid, the same shall
not
invalidate or otherwise affect in any respect any other term or terms of this
Agreement, which term or terms shall remain in full force and effect.
15. Non-Waiver.
No
delay or omission by the Company in exercising any right under this Agreement
shall operate as a waiver of that or any other right. A waiver or consent given
by the Company on any one occasion shall be effective only in that instance
and
shall not be construed as a bar or waiver of any right on any other occasion.
16. Amendment.
This
Agreement may be amended or modified only by a written instrument executed
by
both the Company and the Consultant.
17. Counterparts.
This
Agreement may be executed in two (2) signed counterparts, each of which shall
constitute an original, but all of which taken together shall constitute one
and
the same instrument.
18. Interpretation.
Whenever the context may require, any pronouns used in this Agreement shall
include the corresponding masculine, feminine or neuter forms, and the singular
forms of nouns and pronouns shall include the plural, and vice versa. The
captions of the sections of this Agreement are for convenience of reference
only
and in no way define, limit or affect the scope or substance of any section
of
this Agreement.
19. Governing
Law; Jurisdiction.
This
Agreement shall be governed by and construed in accordance with the internal
laws of the Commonwealth of Massachusetts without giving effect to any choice
or
conflict of law provision or rule (whether of the Commonwealth of
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Massachusetts
or any other jurisdiction) that would cause the application of laws of any
jurisdictions other than those of the Commonwealth of Massachusetts.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day
and year set forth above.
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By:
/s/ Xxxxx Xxxxxxx
Name:
Xxxxx Xxxxxxx
Title:
Chief Financial Officer
/s/
Xxxxxxx Xxxxxxxx
Xxxxxxx
Xxxxxxxx
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Exhibit
A
Services
| 1. |
The
Consultant agrees to prepare and deliver to the Company (a) twenty-four
(24)-month strategic acquisition plan target identification matrix
for the
Company and (b) a methodology for valuing acquisition candidates
for the
Company, each in form and substance reasonably acceptable to the
Company.
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| 2. |
The
Consultant agrees to Introduce (as defined below) third parties to
the
Company with respect to a potential (a) transaction relating to the
acquisition of such third party by the Company, (b) transaction relating
to the acquisition of the Company by such third party, (c) merger
involving the Company and such third party, (d) joint venture involving
the Company and such third party in which the Company would own at
least
33% of the entity established in such joint venture, and (e) investment
by
the Company in such third party, such that the Company would own
at least
15% of such third party following such investment (each, a “Strategic
Transaction”).
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| 3. |
The
Consultant agrees to Introduce channel partners to the
Company.
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As
used
herein, “Introduce” means setting up a meeting between an officer of the Company
and an officer or principal of such third party.
In
connection with the provision of the Services referred to in Sections 2 and
3 of
this Exhibit
A,
the
following procedures shall apply:
| · |
The
Consultant shall provide the Company with the name of a party that
it
intends to contact in connection with the provision of the Services
prior
to contacting such party; and
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| · |
Following
receipt of a name, the Company shall, in its sole discretion, either
(a)
agree that the Consultant may contact such party or (b) determine
that the
Consultant may not contact such party, in which case the Consultant
shall
not contact such party in connection with the provision of the Services.
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Any
party
that the Company agrees that the Consultant may contact in connection with
the
provision of the Services is referred to herein as an “Approved
Party.”
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Exhibit
B
Additional
Consulting Fee
The
Company shall pay to the Consultant a fee of $20,000 (an “Additional Fee”) as
follows:
1. In
the
event that the Company closes a Strategic Transaction during the Consultation
Period or within 6 months thereafter with an Approved Party that was Introduced
to the Company by the Consultant, in which the Aggregate Purchase Price (as
defined below) paid in such Strategic Transaction is equal to or greater than
$500,000, the Company shall pay to the Consultant an Additional Fee with respect
to such Strategic Transaction. Aggregate Purchase Price means the value of
any
cash consideration paid in such Strategic Transaction and the fair market value
of any securities issued in such Strategic Transaction, determined at and as
of
the closing of such Strategic Transaction.
2. In
the
event that (a) the Consultant Introduces a channel partner to the Company and
such channel partner is an Approved Party, (b) during the Consultation Period
or
within 6 months thereafter, the Company enters into an agreement with such
Approved Party and (c) within the first twelve (12) months of the effective
date
of the agreement with the Approved Party 250,000,000 kWH will have been
transacted through the Company’s exchange which are attributed to such Approved
Party by the Company, the Company shall pay to the Consultant an Additional
Fee
with respect to such transaction.
Notwithstanding
the foregoing, Consultant shall not eligible to receive more than one Additional
Fee with respect to the same Approved Party. For purposes of clarity, in the
event that Consultant earns an Additional Fee from meeting the criteria set
forth in Item 2 above with respect to an Approved Party and the Company
subsequently closes a Strategic Transaction with that Approved Party as set
forth in Item 1 above, Consultant will not be eligible to receive an Additional
Fee from that subsequent transaction.
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