EXHIBIT 10.35
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CONSULTING SERVICES AGREEMENT
THIS CONSULTING SERVICES AGREEMENT (the "AGREEMENT") entered into this
14th day of June, 2001, (hereinafter the "EFFECTIVE DATE"), by and between
CELERITY SYSTEMS, INC., a Delaware corporation (the "COMPANY"), and YORKVILLE
ADVISORS, LLC, a Delaware limited liability company, with its principal office
at 521 Fifth Avenue, 17th Floor, New York, NY 10175 (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
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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
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a. FINDER'S FEE; NOT A BROKER. In the event of financing pursuant
to the Equity Line of Credit Agreement dated as of the date hereof by and
between the Company and Cornell Capital Partners, L.P. (the "EQUITY LINE OF
CREDIT AGREEMENT"), Company shall issue to Consultant or its assignee, upon the
execution of the Equity Line of Credit Agreement, a warrant to purchase three
million five hundred thousand (3,500,000) shares of Common Stock of the Company
(the "CONSULTANT'S COMMON STOCK") at an exercise price of ten cents ($0.10) per
share (the "WARRANT"). As long as the shares of Common Stock to be issued upon
exercise of the Warrant are registered pursuant to an effective Registration
Statement, the Consultant shall only exercise the Warrant for cash. In the event
at any time no such effective Registration Statement is in existence, whether as
a result of the issuance of a stop order or the suspension of the Registration
Statement by the SEC or for any other reason whatsoever, then the Warrant may be
exercised by a "CASHLESS EXERCISE" pursuant to the terms of the Warrant. The
Warrant will have a life of five (5) years from the date of issuance. In
addition, the Company shall pay to the Consultant cash compensation equal to ten
percent (10%) of the gross proceeds of any Advance under the terms of the Equity
Line of Credit Agreement to be paid directly out of escrow.
b. AUDIT OF BOOKS AND RECORDS. Company shall maintain all books
and records necessary to account for all transactions involving fees which may
be payable hereunder. Consultant and Consultant's professional advisors may
audit, review or examine such books and records at any time during business
hours upon twenty- four (24) hours' prior notice but not more than once each
calendar quarter. If as a result of such review, Consultant determines that
Company received funds for which Consultant was not properly compensated, then
Company (i) shall be responsible for fully reimbursing Consultant for the cost
of such review, audit or examination and (ii) shall pay any amount determined to
be payable to Consultant within three (3) days of receipt of written notice from
Consultant plus interest at the rate of ten percent (10%) per annum from the
date on which payment should have been made to Consultant.
c. 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.
d. 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 Company consummates any such
transaction, Company shall pay Consultant the fees set forth in Section 2(a)(i)
hereof at the time of closing such transaction or transactions. In the event
Consultant brings an action or seeks counsel to enforce the provisions of this
Section 2(d), Company shall be responsible for all fees and expenses incurred by
Consultant including fees and expenses of any appeal or collection of any
judgment.
e. REGISTRATION RIGHTS. Subject to the terms and conditions of
this Agreement, Company shall notify the holder of Registrable Securities (as
defined below) in writing at least ten (10) days prior to the filing of any
registration statement under the 1933 Act for purposes of a public offering of
securities of Company (including, but not limited to, registration statements
relating to secondary offerings of securities of Company, but excluding any
registration statement relating to any employee benefit plan or with respect to
any corporate reorganization or other transaction under Rule 145 of the 1933
Act) and will afford each such holder an opportunity to include in such
registration statement all or part of such Registrable Securities held by such
holder. Each holder of Registrable Securities desiring to include in any such
registration statement, all of part of the Registrable Securities held by it
shall, within ten (10) days after the above-described notice from Company, so
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notify Company in writing. Such notice shall state the intended method of
disposition of the Registrable Securities held by such holder. If a holder
decides not to include all of its Registrable Securities in the registration
statement thereafter filed by Company, such holder shall nevertheless continue
to have the right to include any Registrable Securities in any subsequent
registration statement or registration statements as may be filed by Company
with respect to offerings of its securities, all upon the terms and conditions
set forth herein. "REGISTRABLE SECURITIES" means the shares of Consultant's
Common Stock issuable to the Consultant pursuant to this Agreement.
3. INDEMNIFICATION
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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
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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; thereafter, unless previously terminated, and neither
party has given notice of termination, this Agreement shall be automatically
renewed for successive year periods of one (1) year each. 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. Upon termination or expiration of this
Agreement, Company shall pay to Consultant all amounts due through the date of
termination within thirty (30) days of said date. Notwithstanding the
termination of this Agreement, Sections 2, 3 and 5 shall continue in force and
effect and shall survive any such termination. In addition, notwithstanding any
termination of this Agreement, Consultant shall be entitled to the amounts set
forth in Section 2(a)(i) with respect to any funds received by Company pursuant
to the Equity Line of Credit Agreement.
5. MISCELLANEOUS
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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 stated in the initial paragraph of this Agreement for such party 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
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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.
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.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the Effective Date.
YORKVILLE ADVISORS, LLC CELERITY SYSTEMS, INC.
By: By:
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Name: Name: Kenneth D. Van Meter
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Title: Title: President
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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).
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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.
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