CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (the "Agreement") is made and entered into as of
April 25, 1997 by and between WorldPort Communications, Inc. a Delaware
Corporation ("WorldPort" or the "Company"), and Xx. Xxxxxx Xxxxxxxxx
(hereinafter referred to as the "Consultant"), and shall be effective upon the
date of closing of the Asset Purchase Agreement betweeen WorldPort and
Telenational Communications Limited Partnership (the "Closing").
W I T N E S S E T H:
WHEREAS, the Company desires to have the benefit of the Consultant's
efforts and services;
WHEREAS, the Consultant is willing to make available to the Company the
consulting services provided for in this Agreement as set forth below;
AGREEMENT
1 . TERM
The term of this Agreement shall commence upon the Closing and end on the
date eighteen (18) months from the Closing.
2 . CONSULTING SERVICES
(a) For the term of this Agreement, the Consultant agrees to render the
following consulting services to the Company:
(1) Provide assistance in the transition of aquired assets and
operations into the operations of the Company;
(2) Provide analysis regarding the telecommunications market
and assist in the identification of new markets and new services for the the
Company's existing markets;
(3) Provide assistance with regards to customer and vendor
relations;
(4) Provide assistance with regards to the identification of
potential acquisition targets and new business opportunities.
3 . COMPENSATION AND RELATED MATTERS.
(a) In consideration of the consulting services set forth in paragraph
2(a) above, and subject to the terms and conditions set forth herein, the
Company agrees to compensate the Consultant as follows: Commencing on the
date hereof, and during Consultant's employment, the Company shall pay to
the Consultant a Monthly Consulting Fee of Seven Thousand Dollars per month
($7,000) payable on the first day of every month. The Monthly Consulting
Fee may be increased at the sole discretion of the Board of Directors of
the Company.
(b) During the Consultant's employment hereunder, the Consultant shall
be entitled to receive prompt reimbursement for all reasonable expenses
incurred by the Consultant in performing services hereunder, including all
business, travel, and living expenses while away from home on business or
at the request of and in the service of the Company, provided that such
expenses are incurred and accounted for in accordance with the Company's
policies and procedures, and that any expenses in excess of $500 have been
pre-approved by the Company.
(c) In addition to the Monthly Consulting Fee, the Consultant shall
be entitled to Incentive Compensation for completed acquisitions and new
business opportunities, which business development activities and the
related compensation shall be pre-determined and pre-approved by
Consultant and the Company on a case-by-case business. The terms and
conditions of such Incentive Compensation shall be as specified in that
certain letter from Xxxx Xxxxxx to the Consultant dated June 10, 1997
(attached as Exhibit A to this Consulting Agreement).
4 . TERMINATION
(a) As a result of death: If the Consultant shall die during the term
of this Agreement, the Consultant's employment shall terminate on the
Consultant's date of death, and the Consultant's surviving spouse, or the
Consultant's estate if the Consultant dies without a surviving spouse,
shall be entitled to any Accrued and unpaid Consulting Fees for services
already rendered to the Company as of the death of the Consultant.
(b) As a result of Disability: If, as a result of the Consultant's
Disability, the Consultant shall have been unable to perform the
Consultant's duties hereunder on a full-time, continuous basis for two (2)
consecutive months or for an aggregate of three (3) months within any
twelve (12) month period and if within thirty (30) days after the Company
provides the Consultant with a Termination Notice, the Consultant shall not
have returned to the performance of the Consultant's duties on a full-time
basis, the Company may terminate this Agreement. In the event the
Consultant's services are no longer available to the Company on account of
the Consultant's Disability in accordance with this paragraph, the
Consultant shall receive any accrued and unpaid consulting fees for
services actually rendered as of the Termination Date.
(c) Termination Without Cause: Either party to this Agreement may
terminate the Consultant's employment hereunder without cause at any time
upon notice to the other party. In the event this Agreement is terminated
by the Company without cause, the Consultant shall be entitled to receive
from the Company on the Termination Date a lump-sum cash payment equal to
the remaining Monthly Consulting Fees that the Consultant would otherwise
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have earned over the duration of the remaining term of the Agreement (the
"Termination Payment").
(d) Termination as a result of cause. The Company may terminate the
Consultant for cause, upon the occurrence of any one or more of the
following acts or omissions:
(i) The determination in a binding and final judgment, order,
or decree by a court or administrative agency of competent
jurisdiction, that the Consultant has engaged in fraudulent conduct,
and the determination by the Board, in its sole discretion, that
such fraudulent conduct has a significant adverse impact on the
Company;
(ii) The unreasonable refusal by the Consultant to perform the
Consulting services and, after notice from the Company to the
Consultant, the Consultant's continuing refusal to commence his
services within 48 hours after giving of such notice by the Company;
(iii) The performance by the Consultant of his duties or
responsibilities in a manner constituting gross negligence;
(iv) In the event of termination for cause, as set forth
above, or in the event of termination by the Consultant, the
Consultant will be entitled to receive any accrued but unpaid
consulting fees for services actually performed, but will not be
entitled to the Termination Payment, except as otherwise provided by
Texas law.
5 . TERMINATION NOTICE.
Any termination by the Company or the Consultant of this Agreement shall
be communicated by written Notice of Termination to the Consultant, if such
Notice of Termination is delivered by the Company, and to the Company, if such
Notice of Termination is delivered by the Consultant. The Notice of Termination
shall indicate the specific termination provision in this Agreement relied upon
and shall set forth the Termination Date.
6 . NONDISCLOSURE OF CONFIDENTIAL INFORMATION.
In connection with the providing of consulting services hereunder, the
Company may provide the Consultant with information concerning the Company which
the Company deems confidential (the "Confidential Information"). The Consultant
understands and agrees that any Confidential Information disclosed to the
Consultant pursuant to this Agreement is secret, proprietary and of great value
to the Company, whihc value may be impaired if the secrecy of such information
is not maintained. The Consultant further agrees that he will take reasonable
security measures to preserve and protect the secrecy of such Confidential
Information, and to hold such information in confidence and not to disclose such
information, either directly or indirectly, to any person or entity during the
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term of this Agreement or any time following the expiration or termination date
hereof. The Consultant further agrees that:
(a) "Confidential Information" shall mean any and all methods,
inventions, improvements or discoveries, whether or not patentable or
copyrightable, and any other information of a secret, proprietary,
confidential, or generally undisclosed nature relating to the Company, its
products, customers, processes, and services, including information
relating to testing research, development, manufacturing, marketing, and
selling, disclosed to the Consultant or otherwise made known to the
Consultant as a consequence of or through the Consultant's engagement by
the Company (including information originated by the Consultant and
information obtained by the Conultant during any previous consulting or
employment engagement or any previous relationship with the Company) in any
technological area previously developed by the Company or developed,
engaged in, or researched, by the Company during the term of the
Consultant's engagement, including, but not limited to, trade secrets,
processes, products, formulae, apparatus, techniques, know-how, marketing
plans, data, improvements, strategies, forecasts, customer lists, and
technical requirements of customers, unless such information is in the
public domain to such an extent as to be readily available to the Company's
competitors.
(b) The Consultant acknowledges that the Company has exclusive
property rights to all Confidential Information and the Consultant hereby
assigns all rights that the Consultant might otherwise possess in any
Confidential Information to the Company. Except as required in the
performance of the Consultant's duties to the Company, the Consultant will
not at any time during or after the term of the Consultant's engagement,
which term shall include any time in which the Consultant may be retained
by the Company as a consultant, directly or indirectly use, communicate,
disclose, or disseminate any Confidential Information.
(c) All documents, records, notebooks, notes, memoranda, and similar
repositories of, or containing, Confidential Information made or compiled
by the Consultant at any time or made available to the Consultant prior to
or during the term of Consultant's engagement by the Company, including any
and all copies thereof, shall be the property of the Company, shall be held
by the Consultant in trust solely for the benefit of the Company, and shall
be delivered to the Company by the Consultant on the termination of the
Consultant's engagement or at any other time on the request of the Company.
(d) The Consultant will not assert any rights under any inventions,
copyrights, discoveries, concepts, or ideas, or improvements thereof, or
know-how related thereto, as having been made or acquired by the Consultant
prior to the Consultant's being engaged by the Company or during the term
of the Consultant's engagement if based on or otherwise related to
Confidential Information.
(e) Notwithstanding anything to the contrary in this Agreement, the
Consultant shall not be precluded from disclosing any of the Confidential
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Information pursuant to a valid order of any governmental or regulatory
authority, or pursuant to the order of any court or arbitor.
(f) The Consultant agrees that since a violation of this paragraph 6
would cause irreparable injury to the Comapny, and that there may not be an
adequate remedy at law for such violation, the Company shall have the
right, in addition to any other remedies available at law or in equity, to
enjoin the Consultant in a court of equity for violating the provisions of
this paragraph 6.
7 . INDEMNIFICATION.
The Company agrees to indemnify and hold the Consultant harmless from and
against any and all losses, liabilities, or costs (including, but not limited
to, reasonable attorney's fees), which the Consultant may sustain, incur, or
assume as a result of, or relative to, any allegation, claim, civil or criminal
action, proceeding, charge, or prosecution, which may be alleged, made,
instituted, or maintained against the Consultant or the Company, jointly or
severally, if (a) the Consultant was made a party to any action arising out of
or based upon the Consultant's rendering of services pursuant to this Agreement
and (b) the Consultant acted in good faith and in a manner reasonably believed
by the Consultant to be in or not opposed to the interests of the Company, and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful. Not withstanding the foregoing, the Company
will not, however, indemnify the Consultant for any claims, liabilities, losses,
damages or expenses that result solely from bad faith, gross negligence or
willful misconduct by the Consultant.
8 . ATTORNEYS' FEES.
In the event that either party hereunder institutes any legal proceedings
in connection with its rights or obligations under this Agreement, the
prevailing party in such proceeding shall be entitled to recover from the other
party all costs incurred in connection with such proceeding, including
reasonable attorneys' fees, together with interest thereon as provided by
applicable law.
9 . INDEPENDENT CONTRACTOR STATUS; SERVICE ON THE BOARD OF DIRECTORS. It is
expressly understood and agreed that this is a consulting agreement only and
does not constitute an employer-emloyee relationship. Accordingly, the
Consultant agrees that the Consultant shall be solely responsible for payment of
his own taxes or sums due to federal, state or local governments, overhead,
workmen's compensation, fringe benefits, pension contributions or other
expenses. It is further understood and agreed that the Consultant is an
independent contractor and that the Company shall have no right to control the
activities of the Consultant other than during the express period of time in
which the Consultant is performing services hereunder, and that such control by
the Company is solely predicated upon the consulting services provided hereunder
and not because of any presumed employee-employer relationship. The Consultant
shall have no authority to bind the Company. The parties further acknowledge
that the Consultant's services hereunder are not exclusive.
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The Parties acknowledge that upon the Closing, Xx. Xxxxxxxxx will be elected to
the Company's Board of Directors and shall serve for such one-year terms as he
may be re-elected from time-to-time by the shareholders of the Company. The
Consultant shall be compensated for his service as a Director of the Company
according to the usual and customary terms of compensation for a Director, which
Director's compensation shall be in addition to his Monthly Consulting Fees and
Incentive Compensation as described above.
10 . ENFORCEMENT.
The provisions of this Agreement shall be regarded as divisible, and if
any of such provisions or any part hereof is declared invalid or unenforceable
by a court of competent jurisdiction, the validity and enforceability of the
remainder of such provisions or the parts hereof and the applicability thereof
shall not be affected thereby.
11 . AMENDMENT OR TERMINATION.
This Agreement may not be amended or terminated during its term, except by
written instrument executed by both the Company and the Consultant.
12 . SURVIVABILITY.
The provisions of Sections 6, 7, 8 and 9 hereof and the provisions hereof
relating to the payment of the Accrued Benefits and the Severance Payment shall
survive the termination of this Agreement.
13 . ENTIRE AGREEMENT.
This Agreement sets forth the entire agreement between the Consultant and
the Company with respect to the subject matter hereof and supersedes all prior
oral or written agreements, negotiations, commitments, and understandings with
respect thereto.
14 . GOVERNING LAW; VENUE.
This Agreement and the respective rights and obligations of the Consultant
and the Company hereunder shall be governed by and construed in accordance with
the laws of the State of Texas without giving effect to the provisions,
principles, or policies thereof relating to choice of law or conflict of laws.
15 . NOTICE.
Notices given pursuant to this Agreement shall be in writing and shall be
deemed given when received, and if mailed, shall be mailed by United States
registered or certified mail, return receipt requested, postage prepaid, if to
the Company, to:
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WorldPort Communications, Inc.
0000 Xxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
with a copy to corporate counsel for the Company to:
Xxxxx & Xxxxxx LLP
Attn: Xx. Xxxxxxx X. Xxxxx, Esq.
000 Xxxx Xxxxxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
Tel: 000-000-0000
or to such other address as the Company shall have given to the Consultant or,
if to the Consultant, to:
Xx. Xxxxxx Xxxxxxxxx
000 Xxxxx 00xx Xxxxxx
Xxxxx, Xxxxxxxx 00000
with a copy to counsel for the Consultant to:
Xxxxxxx X. Xxxxxx, Esq.
000 Xxxxx 00xx Xxxxxx, Xxxxx Xxxxx
Xxxxx, Xxxxxxxx 00000
or to such other address as the Consultant shall have given to the Company.
16 . NO WAIVER.
No waiver by either party at any time of any breach by the other party of,
or any failure by the other party to comply with, any condition or provision of
this Agreement to be performed by the other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same time or at any prior
or subsequent time.
17 . HEADINGS.
The headings herein contained are for reference only and shall not affect
the meaning or interpretation of any provision of this Agreement.
18 . COUNTERPARTS.
This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original but all of which together will constitute one
and the same instrument.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
by its duly authorized officer, and the Consultant has executed this Agreement,
on the date and year first above written.
THE COMPANY:
WORLDPORT COMMUNICATIONS, INC.
/s/Xxxx Xxxxxx
-----------------------------------
XXXX XXXXXX
CHIEF EXECUTIVE OFFICER
CONSULTANT:
/s/Xxxxxx Xxxxxxxxx
-----------------------------------
XXXXXX XXXXXXXXX
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EXHIBIT A
Letter From Xxxx Xxxxxx to Xxxxxx Xxxxxxxxx
Dated June 10, 1996
Specifying Terms and Conditions of Consultant's Incentive Performance
Compensation
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