EXHIBIT 10.40
CONSULTING SERVICES AGREEMENT
THIS CONSULTING SERVICES AGREEMENT (the "AGREEMENT") entered into on
September ___, 2001, (hereinafter the "EFFECTIVE DATE"), by and between CELERITY
SYSTEMS, INC., a Delaware corporation (the "COMPANY"), and YORKVILLE ADVISORS
MANAGEMENT, LLC, a Delaware limited liability company (the "CONSULTANT").
Company desires to retain the services of Consultant as an independent
contractor to provide certain consulting and advisory services designated below,
and Consultant desires to accept such engagement by Company, pursuant to the
terms and conditions of this Agreement.
In consideration of the representations, warranties, mutual covenants
and agreements set forth herein, the parties agree as follows:
1. SCOPE OF SERVICES
a. DUTIES AND PERFORMANCE. From time to time during the term of
this Agreement, Consultant shall provide such advisory services relating to the
Company's financial status and capital structure (the "SERVICES") to Company as
Consultant and Company shall agree. In connection with the Services, Consultant
may develop and communicate to Company certain business opportunities with
entities known to Consultant; the Services may include various types of
arrangements, including direct investment into Company.
b. INDEPENDENT CONTRACTOR STATUS. The parties agree that
Consultant is an independent contractor performing Services hereunder and not an
employee of Company. Consultant may use contractors or other third parties of
Consultant's choice to assist Consultant in rendering such Services. Unless
otherwise agreed by Company in writing, Consultant shall be responsible for
payment of all compensation or expenses payable or reimbursable to such third
parties. Nothing herein or in the performance hereof shall imply either a joint
venture or principal and agent relationship between the parties, nor shall
either such relationship be deemed to have arisen under this Agreement.
2. COMPENSATION AND EXPENSES
A. FINDER'S FEE; NOT A BROKER. For the services described herein,
Company shall pay the Consultant a cash fee a of $184,800.
b. EXPENSE REIMBURSEMENT. While this Agreement is in effect,
Company shall pay for or reimburse Consultant for all reasonable and itemized
business expenses incurred by Consultant directly related to the services to be
performed by Consultant under this Agreement. Consultant shall keep accurate and
detailed records of such expenses and submit expense reports along with relevant
documentation in accordance with the expense reimbursement policy of Company.
Company shall pay or reimburse Consultant for all reasonable out-of-pocket
expenses actually incurred or paid by Consultant in the course of performing
services as required hereunder; PROVIDED, that any individual expense in excess
of five hundred dollars ($500.00) must be approved in advance by Company.
c. NON-CIRCUMVENTION. Company represents and warrants that Company
shall take no action which shall result in Company and any third-party
introduced to Company, directly or indirectly, by Consultant consummating a
relationship or transaction with Company without the participation and
compensation of Consultant. In the event Consultant brings an action or seeks
counsel to enforce the provisions of this Section 2(c), Company shall be
responsible for all fees and expenses incurred by Consultant including fees and
expenses of any appeal or collection of any judgment.
3. INDEMNIFICATION
EXHIBIT A attached hereto and made a part hereof sets forth the
understanding of the parties with respect to the indemnification and exculpation
of Consultant. The provisions of EXHIBIT A shall survive, and remain in full
force and effect after, the termination of this Agreement until fully performed.
4. TERM AND TERMINATION
The initial term of this Agreement shall be for a period commencing on
the Effective Date hereof and ending on the second (2nd) year anniversary of the
date of this Agreement. Either party may terminate this Agreement without cause
or without the necessity of specifying cause by giving written notice of
termination to the other party. This Agreement shall terminate upon its
expiration or upon receipt of this notice of termination by the non-terminating
party. Notwithstanding the termination of this Agreement, Sections 2, 3 and 5
shall continue in force and effect and shall survive any such termination.
5. MISCELLANEOUS
a. NOTICE. All notices and other communications hereunder shall be
in writing and delivered by Federal Express or any other generally recognized
overnight delivery service, or by hand, to the appropriate party at the address
on record or to such other address as a party indicates in a notice to the other
party delivered in accordance with this Section.
b. SEVERABILITY. Should one or more provisions of this Agreement
be held unenforceable, for whatever cause, the validity of the remainder of this
Agreement shall remain unaffected. The parties shall, in such event, attempt in
good faith to agree on new provisions which best correspond to the object of
this Agreement.
c. ENTIRE AGREEMENT. The parties have entered into this Agreement
after negotiations and discussions, an examination of its text, and an
opportunity to consult counsel. This Agreement constitutes the entire
understanding between the parties regarding to specific subject matter covered
herein. This Agreement supersedes any and all prior written or oral contracts or
understandings between the parties hereto and neither party shall be bound by
any statements or representations made by either party not embodied in this
Agreement. No provisions herein contained shall be waived, modified or altered,
except by an instrument in writing, duly executed by the parties hereto.
2
d. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without giving
effect to any choice of law of conflict of law provision or rule whether such
provision or rule is that of New York or any other jurisdiction. Each party
irrevocably consents to the exclusive personal jurisdiction of New York State
courts situated in the county in which Consultant is located in New York, or the
United States District Court, or the Southern District of New York, in
connection with any action, suit or proceeding relating to or arising out of
this Agreement or any of the transactions or relationships contemplated hereby.
Each party, to the maximum extent permitted by law, hereby waives any objection
that such party may now have or hereafter have to the jurisdiction of such
courts on the basis of inconvenient forum or otherwise. Each party waives trial
by jury in any proceeding that may arise with respect to this Agreement.
e. NO IMPLIED WAIVERS. No delay or omission by either party to
exercise its rights and remedies in connection with the breach or default of the
other shall operate as or be construed as a waiver of such rights or remedies as
to any subsequent breach.
f. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, but all counterparts hereof shall together constitute but one
agreement. In proving this Agreement, it shall not be necessary to produce or
account for more than one counterpart signed by both of the parties.
g. BINDING NATURE. This Agreement shall be binding upon and shall
inure to the benefit of the successors and assigns of the respective parties to
this Agreement.
h. CAPACITY. Company represents to Consultant that each person
signing this Agreement on its behalf has the full right and authority to do so,
and to perform its obligations under this Agreement.
i. ATTORNEYS' FEES. In the event of any litigation or other
proceeding arising out of or in connection with this Agreement, the prevailing
party or parties shall be entitled to recover its or their reasonable attorneys'
fees and court costs from the other party or parties.
j. CAPTIONS. The captions appearing in this Agreement are inserted
only as a matter of convenience and for reference and in no way define, limit or
describe the scope and intent of this Agreement or any of the provisions hereof.
3
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the Effective Date.
YORKVILLE ADVISORS CELERITY SYSTEMS, INC.
MANAGEMENT, LLC
By: By:
---------------------------------- ----------------------------
Name: Name: Xxxxxxx X. Van Meter
----------------------------------
Title: Title: President
----------------------------------
4
EXHIBIT A
---------
The Company will indemnify and hold harmless the Consultant and its
affiliates and their respective directors, members, officers, agents and
employees and each other person controlling the Consultant or any of its
affiliates for any losses (i) related to or arising out of (A) oral or written
information provided by the Company to the Consultant, the Consultant's
employees or other agents or (B) any other action or failure to act by the
Consultant, its members, officers, agents or employees or by the Consultant or
any other indemnified party at the Company's request or with the Company's
consent, or otherwise related to or arising out of the consulting services
provided or to be provided by the Consultant under this Agreement (the
"ENGAGEMENT") or any transaction or conduct in connection therewith, except that
this clause (ii) shall not apply with respect to any losses that are finally
judicially determined to have resulted from the gross negligence or willful
misconduct of such indemnified party.
If the foregoing indemnity is unavailable to any indemnified party for
any reason, the Company will contribute to any losses related to or arising out
of the Engagement or any transaction or conduct in connection therewith as
follows. With respect to such losses referred to in clause (i) of the preceding
paragraph, each of the Company and the Consultant shall contribute in such
proportion as is appropriate to reflect the relative benefits received (or
anticipated to be received) by the Consultant on the one hand, and by the
Company and its security holders, on the other hand, from the actual or proposed
transaction arising in connection with the Engagement. With respect to any other
losses, and for losses referred to in clause (i) of the preceding paragraph if
the allocation provided by the immediately preceding sentence is unavailable for
any reason, each of the Company and the Consultant shall contribute in such
proportion as is appropriate to reflect not only the relative benefits as set
forth above, but also the relative fault of each the Company and the Consultant
in connection with the actions, omissions or other conduct that resulted in such
losses, as well as any other relevant equitable considerations. Benefits
received (or anticipated to be received) by the Company and its security holders
shall be deemed to be equal to the aggregate cash consideration and value of
securities or any other property payable, issuable, exchangeable or transferable
in such transaction or proposed transaction, and benefits received by the
Consultant shall be deemed to be equal to the compensation paid by the Company
to the Consultant in connection with the Engagement (exclusive of amounts paid
for reimbursement of expenses or paid under this Agreement). Relative fault
shall be determined by reference to, among other things, whether any alleged
untrue statement of omission or any other alleged conduct relates to information
provided by the Company or other conduct by the Company (or the Company's
employees or other agents), on the one hand, or by the Consultant, on the other
hand. The parties agree that it would not be just and equitable if contribution
were determined by pro rata allocation or by any other method of allocation that
does not take account of the equitable considerations referred to above.
Notwithstanding anything to the contrary above, in no event shall the Consultant
be responsible for any amounts in excess of the amount of the compensation
actually paid by the Company to the Consultant in connection with the Engagement
(exclusive of amounts paid for reimbursement of expenses or paid under this
Agreement).
A-1
The Company agrees that it will not, without prior written consent of
the Consultant, settle any pending or threatened claim or proceeding related to
or arising out of the Engagement or any actual or proposed transactions or other
conduct in connection therewith (whether or not the Consultant or any
indemnified party is a party to such claim or proceeding) unless such settlement
includes a provision unconditionally releasing the Consultant and each other
indemnified party from, and holding all such persons harmless against, all
liability in respect of claims by any releasing party related to or arising out
of the Engagement or any transactions or conduct in connection therewith. The
Company will also promptly reimburse each indemnified party for all expenses
(including counsel fees and expenses) as they are incurred by such indemnified
party in connection with investigating, preparing for, defending, or providing
evidence in, any pending or threatened claim or proceeding related to or arising
out of the engagement or any actual or proposed transaction or other conduct in
connection therewith or otherwise in respect of which indemnification or
contribution may be sought hereunder (whether or not the Consultant or any other
indemnified party is a party to such claim or proceeding) or in enforcing this
Agreement.
The Company further agrees that the Consultant shall not have any
liability (whether direct or indirect, in contract or tort or otherwise) to the
Company or any of the Company's affiliates, creditors or security holders for or
in connection with the Engagement or any actual or proposed transactions or
other conduct in connection therewith except for losses incurred by the Company
that are finally judicially determined to have resulted from the gross
negligence or willful misconduct of the Consultant.
The provisions set forth above shall remain in full force and effect
and shall survive the completion or termination of the Engagement.
A-2
