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EXHIBIT 2.5
CONSULTING AGREEMENT
THIS AGREEMENT (the "Agreement") is made and entered into on October 18,
1999, by and between ALTERNATIVE MATERIALS TECHNOLOGY, a Nevada corporation
("AMT"), and FREDERICK PARKINSON ("Parkinson"), an individual. AMT and Parkinson
are hereafter collectively referred to as the "Parties."
RECITALS
1. Parkinson is a co-founder and former shareholder of U.S. CELLULOSE
CO., a California corporation (the "USCC").
2. Pursuant to that certain Stock Purchase Agreement, dated October
18,1999, by and among AMT, USCC, and Parkinson (the "Stock Purchase Agreement"),
AMT is purchasing all of the Shares, as defined in the Stock Purchase Agreement,
of USCC's capital stock owned by Parkinson.
3. In order to provide for continuity of management and a smooth
transition to new ownership, AMT wishes to retain Parkinson as a consultant to
render business advice to AMT on the terms set forth in this Agreement, and
Parkinson wishes to serve as a consultant to AMT on the terms set forth herein.
NOW, THEREFORE, for and in consideration of the premises and the terms,
covenants and conditions of this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties hereto agree as follows:
AGREEMENT
1. ENGAGEMENT AND SERVICES.
(1) Engagement of Parkinson. Subject to the terms and conditions
of this Agreement, AMT hereby engages Parkinson as a business consultant to AMT,
and Parkinson hereby accepts such engagement. Parkinson shall provide AMT with
business advisory services during the term of this Agreement, including advice
and counsel on strategic business planning, product development, marketing
strategies, administrative matters, financial planning and general business
development (the "Services"), as requested by AMT. Parkinson shall provide forty
(40) hours per week of service hereunder.
(2) Acceptance. Subject to the terms and conditions of this
Agreement, Parkinson hereby accepts the engagement by AMT set forth in this
Section 1 of this Agreement, and Parkinson agrees to perform the Services.
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(3) Services. In providing the Services to AMT pursuant to this
Agreement, Parkinson shall take the following actions:
(1) Perform the Services in full compliance with applicable
federal, state and local laws and regulations and in full conformity with the
standards of care and diligence normally practiced by parties performing similar
work;
(2) Prior to submitting any report or document prepared by
Parkinson on behalf of AMT to any governmental agency or third party, submit a
copy of such report or document, together with any supporting materials, to AMT
and obtain AMT's approval of the form and contents of same and of the submission
of such report or document to such governmental agency or third party;
(3) Regularly consult with AMT with respect to the status
and results of the Services and submit verbal and written reports as requested
by AMT or as necessary to keep AMT fully informed; and
(4) Maintain full and accurate records and books of accounts
necessary to document (A) all activities undertaken by or on behalf of AMT in
the course of performing the Services hereunder, including without limitation
any and all contacts and communications made by Parkinson on behalf of AMT with
any governmental agency or official or third party; and (B) all charges,
expenses and disbursements incurred by Parkinson, his agents or subcontractors
in performing the Services hereunder. Parkinson will make such books and records
available to AMT upon request during normal business hours.
(4) Work Product. All products produced or obtained by Parkinson
in the performance of the Services shall be the exclusive property of AMT, and
all documents (including, without limitation, all writings, drawings, pictures,
recordings, computer or machine-readable data, and all copies or reproductions
thereof) which describe or relate to the Services performed or to be performed
by Parkinson pursuant to this Agreement or the results thereof, including,
without limitation, all notes, data, reports or other information received or
generated in the performance of this Agreement, shall be the exclusive property
of AMT.
2. TERM OF ENGAGEMENT. The term of this Agreement shall commence on
the effective date of this Agreement and shall continue, unless terminated in
accordance with Section 4 of this Agreement for thirty (30) days (the "Term");
provided however, that AMT shall have two (2) options to extend the Term (the
"Extension Options") for a period of thirty (30) days each (the "Option Term").
3. COMPENSATION.
(1) Monthly Fee. In exchange for the Services to be performed
hereunder by Parkinson, AMT shall pay to Parkinson the amount equal to Ten
Thousand Dollars ($10,000) each month, in equal semi-monthly installments,
during the Term or any Option Term of this Agreement,
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with the first payment to be made on or before November 1, 1999, for the
Services provided by Parkinson during the immediately preceding month. Payments
made by AMT under this Section 3 shall constitute full compensation for all
personnel, materials, supplies, equipment and facilities used by Parkinson in
performing the Services.
(2) Reimbursement of Expenses. AMT shall reimburse Parkinson for
extraordinary expenses incurred by Parkinson in connection with the Services if
and to the extent that Parkinson has obtained AMT's approval of such expenses
prior to the incurrence of such expenses by Parkinson.
4. TERMINATION.
(1) Notwithstanding the provisions of Section 2, AMT shall have
the right, at any time, in its sole discretion and with or without cause, by
written notice to Parkinson, to terminate this Agreement upon delivery of a
written notice of termination to Parkinson thirty (30) days in advance of the
date of termination. Parkinson shall stop work immediately upon receipt of such
written notice of termination and shall promptly deliver to AMT the work product
of Parkinson and any other results of Parkinson's work to date of termination.
(2) Upon termination of this Agreement, AMT shall pay Parkinson a
pro rata amount of the monthly payment due under Section 3 of this Agreement
which relates to any portion of a month prior to the effective date of
termination. The right to terminate this Agreement under Section 4(a) of this
Agreement shall be in addition to, and not in lieu of, any other rights and
remedies AMT may have at law or in equity.
5. CONFIDENTIALITY.
(1) Parkinson understands and acknowledges that Parkinson, his
employees, agents and subcontractors, have been and will be granted access to
certain Confidential Information (as defined below) of AMT in the course of
performing the Services hereunder. The term "Confidential Information" as used
herein shall mean all records and information with respect to AMT, and past or
present activities, that are not a matter in the public domain or lawfully
acquired on a non-confidential basis from others. Parkinson agrees to hold in
strictest confidence, and not to disclose or to permit disclosure to any person
or entity other than AMT or AMT's legal counsel, nor make an unauthorized use
of, any Confidential Information, without the prior written consent of AMT or
AMT's legal counsel.
(2) Parkinson understands and acknowledges that each
communication of Confidential Information collected or developed by Parkinson on
behalf of AMT in the course of performing the Services hereunder constitutes a
confidential communication from AMT to AMT's legal counsel which is intended to
be protected against disclosure to third persons by the attorney-client
privilege and, to the extent Confidential Information is prepared in
anticipation or defense of potential or pending litigation or administrative
proceedings, such communications are intended to be protected from discovery by
the work product doctrine. All written reports and other documents
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which are prepared by Parkinson, his agents or subcontractors in performing the
Services hereunder shall be conspicuously marked "Confidential" on their face
unless Parkinson is otherwise instructed by AMT's legal counsel.
(3) Parkinson shall not, without the prior written approval of
AMT or AMT's legal counsel on AMT's behalf, publish or otherwise disseminate any
advertising, promotion, report, article, research piece or publicity wherein AMT
is mentioned or is otherwise reasonably identified or language is used from
which a relationship between AMT and Parkinson may, in the reasonable judgment
of AMT, be inferred. The confidentiality obligations set forth in this Section 5
shall survive the termination or expiration of this Agreement.
6. PROJECT DIRECTION. The Services performed by Parkinson pursuant
to this Agreement shall be performed under the direction and management of
William A. Maligie at AMT.
7. STANDARD OF CARE. Parkinson shall exercise good faith and due
diligence under this Agreement and shall at all times exercise all reasonable
efforts to defend and promote the interests of AMT. Parkinson shall perform his
obligations under this Agreement in a thorough, good and workmanlike manner, and
where applicable in accordance with industry and professional standards.
8. INDEMNIFICATION. Parkinson shall indemnify, defend and hold
harmless AMT, its directors, officers, employees, agents, representatives and
contractors, from and against any and all claims, liabilities, demands, damages,
losses, costs and expenses, including, but not limited to, attorneys' fees and
costs ("Liabilities") arising out of or resulting from (i) any breach or default
by Parkinson of any of his obligations under this Agreement or (ii) the
negligent acts, errors, omissions or willful misconduct of Parkinson, his
agents, subcontractors or employees.
9. STATUS OF PARKINSON. Parkinson shall be an independent
contractor and neither Parkinson nor any of his employees, agents or
subcontractors shall be eligible to participate in any benefit plan of AMT or to
receive any fringe benefits from AMT. None of Parkinson's employees,
subcontractors, agents or representatives shall be considered employees of AMT.
This Agreement shall not create a relationship of partnership, corporation,
joint venture or association for profit or an employee, employer relationship
between the Parties. Parkinson shall have no authority to assume or create any
commitment or obligation on behalf of or to bind AMT in any respect whatsoever.
10. RELIANCE BY THIRD PARTIES. The Services provided under this
Agreement are for the exclusive use of AMT. Any written documents, including but
not limited to data, reports, findings, summaries, or recommendations, prepared
by Parkinson for AMT in the course of performing the Services hereunder and
provided by AMT, in its sole discretion, to any third parties, may be relied
upon by such party to the extent that such documents may be relied upon by AMT.
11. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement of the parties and supersedes any and all prior or contemporaneous
written or oral negotiations, correspondence, understandings and agreements
between the parties respecting the subject matter hereof.
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12. MODIFICATION. No supplement, modification or amendment to this
Agreement shall be binding unless executed in writing by both parties.
13. WAIVER. No waiver of any of the provisions of this Agreement
shall be deemed, or shall constitute, a waiver of any other provision, whether
or not similar, nor shall any waiver constitute a continuing waiver. No waiver
shall be binding unless executed in writing by the party making the waiver.
14. ASSIGNMENT. This Agreement shall be binding upon and shall inure
to the benefit of the parties and their respective successors and assigns;
provided, however, that neither party shall be entitled to assign any of its
rights or obligations hereunder without the prior written consent of the other.
15. NOTICE. All notices, requests, demands and other communications
required to or permitted to be given under this Agreement shall be in writing
and shall be conclusively deemed to have been duly given (a)_when hand delivered
to the other party; or (b)_when received when sent by telex or facsimile at the
address and number set forth below (provided that any notice given by telex or
facsimile shall be deemed received on the next business day if such notice is
received after 5:00 p.m. (recipient's time) or on a nonbusiness day); or
(c)_three (3) business days after the same have been deposited in a United
States post office with first class or certified mail return receipt requested
postage prepaid and addressed to the parties as set forth below; or (d)_the next
business day after same have been deposited with a national overnight delivery
service reasonably approved by the parties (Federal Express and DHL Worldwide
Express being deemed approved by the parties), postage prepaid, addressed to the
parties as set forth below with next-business-day delivery guaranteed, provided
that the sending party receives a confirmation of delivery from the delivery
service provider:
To AMT: Alternative Materials Technology
311 Otterson Drive, Suite 60
Chico, California 95928
Attention: E. Laughlin Flanagan
Facsimile: (530) 896-0657
To Parkinson: Frederick Parkinson
3609 Warner Drive
San Jose, California 95127
Facsimile: _____________
Each party shall make an ordinary, good faith effort to ensure that it will
accept or receive notices that are given in accordance with this Section, and
that any person to be given notice actually receives such notice. A party may
change or supplement the addresses given above, or designate
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additional addresses, for purposes of this Section by giving the other parties
written notice of the new address in the manner set forth above.
16. HEADINGS. The subject headings of the Sections of this Agreement
are provided for convenience only and shall not affect the construction or
interpretation of any of the provisions hereof.
17. COUNTERPARTS. This Agreement may be executed in multiple
counterparts and each such executed counterpart shall be deemed an original, but
all of which together shall constitute a single instrument.
18. ATTORNEYS' FEES. If any party to this Agreement shall take any
action to enforce this Agreement or bring any action for any relief against any
other party, declaratory or otherwise, arising out of this Agreement, the losing
party shall pay to the prevailing party a reasonable sum for attorneys' fees
incurred in bringing such suit and/or enforcing any judgment granted therein,
all of which shall be deemed to have accrued upon the commencement of such
action and shall be paid whether or not such action is prosecuted to judgment.
Any judgment or order entered in such action shall contain a specific provision
providing for the recovery of attorneys' fees and costs incurred in enforcing
such judgment. For purposes of this section, attorneys' fees shall include,
without limitation, fees incurred in the following: (a)_post-judgment motions
and collection actions; (b)_contempt proceedings; (c)_garnishment, levy, and
debtor and third party examinations; (d)_discovery; and (e)_bankruptcy
litigation.
19. GOVERNING LAW. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of California
applicable to contracts made and to be performed in California.
20. DRAFTING. The parties to this Agreement agree that this
Agreement is the product of joint draftsmanship and negotiation and that should
any of the terms be determined by a court, or in any type of quasi-judicial or
other proceeding, to be vague, ambiguous and/or unintelligible, that the same
sentences, phrases, clauses or other wordage or language of any kind shall not
be construed against the drafting party.
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IN WITNESS OF THE FOREGOING PROVISIONS, the parties hereto have duly
executed this Agreement below.
AMT:
ALTERNATIVE MATERIALS TECHNOLOGY, a
Nevada corporation
Date: October 18, 1999 By: /s/ WILLIAM MALIGIE
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William A. Maligie
President
Date: October 18, 1999 By: /s/ E. LAUGHLIN FLANAGAN
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E. Laughlin Flanagan
Assistant Secretary/Treasurer and Director
PARKINSON:
Date: October 18, 1999 /s/ FREDERICK PARKINSON
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Frederick Parkinson
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