CONSULTING AGREEMENT
Exhibit
10.46
THIS
CONSULTING AGREEMENT (“Agreement”) is entered into effective June 15, 2006 (the
“Effective Date”), by and between TRULITE, INC. (“the Company”) and Xxxxxxxx
Xxxxxxxx (“Consultant”). The Company and Consultant shall collectively be
referred to herein as “the Parties.”
WHEREAS,
the Company
desires to obtain the benefit of the knowledge and experience of Consultant
by
retaining Consultant on an independent contractor basis, and Consultant is
willing to render such services to the Company on the terms and conditions
set
forth herein.
NOW
THEREFORE, in consideration of the promises and mutual covenants contained
herein, the receipt and sufficiency of which is acknowledged, the Parties agree
as follows:
1. Consulting
Services. The Company hereby retains Consultant to perform certain services
for the Company, and Consultant hereby agrees to provide such services (the
“Services”). Consultant’s duties and responsibilities will include those
assigned by the Company’s Board of Directors (the “Board”), including, without
limitation, those customarily assigned to senior management. Consultant will
receive direction from the Board.
All
of
Consultant’s services will be subject to the Company’s final approval and will
be performed in accordance with the Company standards, but Consultant shall
direct the details and means by which the services are accomplished. Consultant
shall conform to the rules, regulations, instructions, practices and policies
of
the Company now in force or hereafter enacted which are applicable to
consultants or independent contractors engaged by the Company.
Consultant,
as part of his Services, shall develop a cash incentive plan for the Company
employees. Such plan shall be presented to the Board for its approval no later
than December 15, 2006. The Board, in its sole discretion, will determine the
date of such plan’s implementation.
2. Location.
Consultant will work out of the Company facility located at Xxxxx Xxxxxxxx,
Xxxxx 0000, Xxxxxxx, Xxxxx and/or from Consultant’s office in Houston, Texas.
3. Compensation
for Services. The Company shall compensate Consultant for performance of the
Services pursuant to the following terms and conditions.
(a) Fee
for Services.
During
the term of this Agreement, the Company agrees to pay Consultant a prorated
fee
equal to $10,000.00 per month. Such fees shall be increased to $16,666.66 per
month at the closing of the Company’s current round of financing or November 30,
2006, whichever occurs first. The parties agree that no additional fees will
be
paid for Consultant’s participation on the Board, if any.
(b) Benefits.
During
the Term of this Agreement, Consultant will be entitled to participate in and
receive company benefits as set out in the Trulite Human Resource’s
Guidelines.
(c)
Expenses.
Consultant will be compensated for all reasonable and documented expenses
associated with providing these services, such as travel and entertainment
expenses, office supplies, etc.
4. Stock
Options.
Subject
to the approval of the Board, which approval shall not be unreasonably withheld,
Consultant
will be granted an option to purchase 5.0% of the outstanding shares of the
Company’s Common Stock on the date of grant. The
exercise price per share will be equal to the fair market value per share on
the
date the option is granted or on the Effective Date, whichever is later. The
option will be subject to the terms and conditions applicable to options granted
under the Company’s Amended and Restated Stock Option Plan (the “Plan”) , as
described in the Plan and the applicable stock option agreement. Consultant
will
vest in 25% of the option shares after 12 months of continuous consulting
service and/or Board service (if any), 25% after 24 months of continuous
consulting service and/or Board service (if any), 25% after 36 months of
continuous consulting service and/or Board service (if any) and 25 % after
48
months of continuous consulting service and/or Board service (if any). The
option will be exercisable for seven years from the date of grant and will
be
subject to acceleration upon a change of control of the Company.
(a)
Termination
of Stock Options.
In the
event that the Consultant’s services or Consultant’s service on the Board of
Directors, if any, is terminated by either party, the Stock Options will
continue to vest for 30 days following the date of such termination, whichever
is later. Options will not expire if they are exercised within 120 days
following the date of such termination. In the event that the Consultant becomes
an employee of the Company, then the termination provisions for the stock
options agreed to in an offer letter and/or employment agreement will determine
the vesting and exercise rights of Consultant following any termination.
5. Term.
The term of this Agreement for providing consulting services (but not for Board
membership, if any) shall end on December 31, 2006, or until otherwise
terminated. Either Consultant or the Company may terminate this Agreement at
any
time and for any reason during the term.
6. Independent
Contractor Relationship. In rendering Services hereunder it is expressly
understood and agreed that Consultant is not an employee of or controlled by
the
Company, but that Consultant is, in all respects, an independent contractor,
and
as such Consultant has no right or authority to make any disbursements or
purchases or to incur any liabilities on behalf of the Company or to otherwise
obligate the Company in any manner whatsoever, unless specifically authorized
to
do so by the Company.
The
Company will make no deductions from any of the payments due to Consultant
hereunder for state or federal tax purposes. Consultant agrees that he will
be
solely responsible for any and all taxes and other payments due on payments
received by Consultant from the Company hereunder, including withholding of
state and federal income, sales or ad valorem taxes, unemployment compensation,
workers’ compensation, Federal Insurance Contributions Act, Federal Unemployment
Tax Act or other taxes, costs or expenses incurred in the performance of any
engagement hereunder. Consultant expressly indemnifies and holds the Company
harmless from any such liabilities.
Consultant
understands and agrees that the Company is not responsible for paying any
retirement, worker’s compensation or unemployment benefits to Consultant.
7. Confidentiality.
Consultant will be required, as a condition of this Agreement, to strictly
maintain the confidentiality of any confidential business matters pertaining
to
the Company. Consultant agrees not to use any confidential information acquired
by Consultant’s in connection with performing the Services for Consultant’s own
personal benefit or for the benefit of persons other than the Company.
Consultant agrees that Consultant’s obligations under this paragraph shall
continue in effect for five years after termination of the Agreement, regardless
of the reason or reasons for termination, and whether such termination is
voluntary or involuntary on Consultant’s part.
8. Non-Compete
Agreement. Consultant will sign a non-compete agreement related to the
Company’s chemical hydride and fuel cell technology as it relates to current
products of the Company. The Non-Compete Agreement will remain in effect for
twelve (12) months after Consultant stops providing any services for the
Company.
9. No
Conflicting Agreements. Consultant represents and warrants that he is not a
party to, subject to, or otherwise bound by any other agreement, arrangement,
or
understanding, written or otherwise, which prohibits, restricts, or anyway
whatsoever conflicts with Consultant’s ability to enter into and fulfill his
obligations under this Agreement.
10. Choice
of Law, Venue and Forum. This Agreement, the entire relationship of the
Parties hereto, and any litigation between the Parties (whether grounded in
contract, tort, statute, law or equity) shall be governed by, construed in
accordance with, and interpreted pursuant to the laws of the State of Texas,
without giving effect to its choice of laws principles. Exclusive venue for
any
litigation between the Parties hereto shall be in Xxxxxx County, Texas, and
shall be brought in the State District Courts of Xxxxxx County, Texas, or in
the
United States District Court for the Southern District of Texas, Houston
Division. The Parties hereto waive any challenge to personal jurisdiction or
venue (including without limitation a challenge based on inconvenience) in
Xxxxxx County, Texas, and specifically consent to the jurisdiction of the State
District Courts of Xxxxxx County and the United States District Court for the
Southern District of Texas, Houston Division.
11. Counterparts.
This Agreement may be executed in multiple counterparts, all of which shall
constitute one agreement and each of which shall constitute an original of
this
Agreement.
12. Headings.
The headings used in this Agreement have been included only in order to make
it
easier to locate the subject covered by each provision and are not to be used
in
construing this Agreement.
13. Entire
Agreement. This Agreement supersedes and replaces any prior understandings
or agreements, whether oral, written or implied, between Consultant and the
Company regarding the matters described in this letter.
14. Invalid
Provisions.
Should
any portion of this Agreement be adjudged or held to be invalid, unenforceable
or void, such holding shall not have the effect or invalidating or voiding
the
remainder of this agreement and the parties hereby agree that the portion so
held invalid, unenforceable or void shall, if possible, be deemed amended or
reduced in scope, or otherwise be stricken from this letter to the extent
required for the purposes of validity and enforcement thereof.
[Signature
page follows.]
IN
WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
as
of the Effective Date.
COMPANY: | ||
TRULITE, INC. | ||
By: Trulite, Inc. | ||
|
|
|
Name: Xxxxxxx X. Xxxxxx | ||
Title: Chairman of the Board | ||
Date: June 16, 2006 | ||
CONSULTANT: | ||
Date: June 15, 2006 |