EXHIBIT 10.29
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (this "Agreement") is made as of this _____ day
of May, 2003 and effective June 1, 2003 (the "Effective Date"), by and between
V. Joel Nicholson ("Nicholson") and Avatech Solutions, Inc., a Delaware
corporation (the "Company") (hereinafter, sometimes referred to collectively as
the "Parties").
RECITALS
A. The Company has employed Nicholson since January 1997, and the terms
of his employment are currently governed by a Severance Agreement dated February
27, 1998 (the "Severance Agreement");
B. The Parties wish to settle and resolve all claims that either of the
Parties could assert against each other arising out of, as a consequence of, for
or by reason of, resulting from or relating in any way to Nicholson's employment
with the Company or the Severance Agreement; and
C. The Parties wish for Nicholson to resign his employment with the
Company, to terminate the Severance Agreement, and for Nicholson to be retained
as a Consultant to the Company.
NOW, THEREFORE, in consideration of the Explanatory Statement which is
incorporated herein by reference and the mutual agreements, promises, releases
and covenants contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Company and
Nicholson agree as follows:
AGREEMENT
Section 1. Termination of Severance Agreement.
1.1 Termination. The Parties agree to terminate Severance Agreement as of
the Effective Date.
1.2 Mutual Release. Nicholson and the Company each release the other from
all obligations arising under or related to the Severance Agreement, including
but not limited to, any obligation of the Company to make payments under the
Severance Agreement.
1.3 Waiver of Employment Claims. Nicholson, on behalf of himself, and his
agents, executors, heirs, representatives, and successors, waives and releases
any claims in law or in equity, charges, or causes of action, and any and all
rights of any type he now has or may have against the Company, and its
directors, affiliates (including Avatech, its subsidiaries, and their successors
and assigns,) shareholders, officers, agents, employees, and successors, growing
out of or in any way related to Nicholson's employment or his resignation from
employment with the Company.
Section 2. Consulting Services, Authority.
2.1 Nicholson agrees to perform such reasonable duties as are assigned to
him by an officer of the Company on a reasonably part-time basis.
2.2 Nicholson agrees to be available at reasonable times and for
reasonable periods of time, on a part-time basis, to complete the duties
assigned to him.
2.2.1 For the purposes of this Agreement "part-time" shall be
considered ten (10) hours or fewer each week or duties not requiring Nicholson
to travel substantial distances.
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2.2.2 In the event that the Company and/or its officers assign
duties to Nicholson that cannot be completed on a substantially part-time basis,
the Company will pay Nicholson a fee in addition to the consulting fee described
in 3.2 of this Agreement in an amount to be agreed upon by the Company and
Nicholson.
2.2.3 Nicholson may engage in any Noncompeting Business Activities,
as defined in paragraph 5.2.
2.3 The Company may request written reports from Nicholson at any time
during the performance of this Agreement, which will be furnished within a
reasonable period of time after the report is requested.
2.4 Nicholson will render services to the Company as an independent
contractor, and not as an employee. Nicholson, rather than the Company, shall
have ultimate control over the scope and details of his activities pursuant to
this Agreement, however all services rendered by Nicholson on behalf of the
Company will be performed to the best of his ability.
2.5 Nicholson does not have the right or authority at any time to make
any contract or binding promise of any nature on behalf of the Company, either
oral or written, without the express written consent of an authorized officer of
the Company.
Section 3. Term.
3.1 Term. Unless terminated in accordance with the provisions of
paragraph 3.2, Nicholson will provide services to the Company beginning on the
Effective Date and will continue for three (3) years (the "Term"). At the end of
the Term, all obligations of the Company and Nicholson under this Agreement,
except for Nicholson's obligations under Section 5, will cease to have any force
or effect.
3.2 Termination.
3.2.1 Generally. The Company may terminate this Agreement for Cause
at any time, effective immediately on notice to Nicholson. Nicholson may
terminate this Agreement at any time and for any reason, effective thirty (30)
days' after Nicholson provides written notice to the Company in accordance with
paragraph 7.1 of this Agreement. If this Agreement is terminated under this
paragraph 3.2 of this Agreement, all obligations of the Company and Nicholson
under this Agreement, except for Nicholson's obligations under Section 5, will
be cancelled and will cease to have any force or effect on the date that such
termination is effective.
3.2.2 Cause. For purposes of this Agreement, "Cause" means:
(a) Fraud, misappropriation, or intentional material damage to the
property or business of the Company; or
(b) A violation of Section 5 of this Agreement.
Section 4. Payment for Services Rendered.
4.1 Consulting Fee. The Company will pay Nicholson $5,500 each month (the
"Consulting Fee") during the three-year Term of this Agreement, unless this
Agreement is terminated earlier by Nicholson or by the Company for Cause,
pursuant to paragraph 3.2 of this Agreement. The Consulting Fee will be paid at
the same time and with the same priority as the Company's payroll.
4.2 Expenses. The Company will reimburse Nicholson for ordinary and
necessary business expenses incurred by him in connection with his performance
of his duties under this Agreement upon his submission to the Company of
receipts for or other evidence of payment of such expenses.
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Section 5. Certain Restrictions
5.1 Confidentiality. Nicholson acknowledges that he will acquire
confidential information in the course of carrying out his obligations under
this Agreement relating to the business of the Company, its subsidiaries and
affiliates, including but not limited to business plans, sales and marketing
plans, financial information, acquisition prospects, and "customer" and
"supplier" lists (as such terms may relate to the business or the systems and
other trade secrets or know-how of the Company, its subsidiaries and affiliates)
as they may exist from time to time (collectively, "Confidential Information"),
which are valuable, special, and unique assets of the Company's business, access
to or knowledge of which is essential to the performance of Nicholson's
obligations under this Agreement. Confidential information shall only include
that information that the Company identifies as confidential or information that
Nicholson actually knows or reasonably should know is secret or confidential
information. Accordingly, Nicholson will not disclose any such Confidential
Information at any time (either while this Agreement is in effect or after its
expiration or other termination) other than in connection with and reasonably
required for the performance of his obligations under this Agreement or unless
required to do so pursuant to law, subpoena, court order, or other legal
process. These restrictions will not apply to, and Confidential Information will
not be deemed to include, information that is then in the public domain (other
than as a result of action by Nicholson). Nicholson's obligations under this
paragraph 5.1 shall continue for his lifetime and survive the termination or
expiration of this Agreement.
5.2 Competitive Activity. Nicholson agrees that he will not, without
prior written consent of the Company, engage in any of the following conduct
("Competing Business Activity") during the Term of this Agreement:
5.2.1 Directly or indirectly, knowingly engage in, or be interested
in (as owner, partner, shareholder, employee, director, officer, agent,
consultant or otherwise), with or without compensation, any business entity or
operation that engages in the business of selling computer-aided design software
or providing professional, consulting, technical or training services related to
computer-aided design software within fifty (50) miles of any location where the
Company, its affiliates or subsidiaries, maintains a place of business, except
that Executive may own up to a five percent (5%) interest in the publicly-traded
securities of a publicly traded corporation;
5.2.2 Employ or retain or participate in or arrange the employment
or retention of any person who was employed or retained by the Company, any
successor to the Company's business, or any of their affiliates or subsidiaries
during the period of Executive's employment; or
5.2.3 Directly or indirectly solicit any customers or clients of the
Company, its affiliates, or subsidiaries.
Any business activities not prohibited by this paragraph 5.2 are "Noncompeting
Business Activities."
5.3 Remedy for Breach and Modification. Executive acknowledges that the
provisions of this Section 5 are reasonable and necessary for the protection of
the Company and that the Company will be irrevocably damaged if these provisions
are not specifically enforced. Accordingly, Executive agrees that, in addition
to any other relief or remedies available to the Company, including reasonable
attorneys' fees and costs, the Company is entitled to seek and obtain an
appropriate injunction or other equitable remedy for the purposes of restraining
the Executive from any actual or threatened breach of or otherwise enforcing
these provisions and no bond or security will be required in connection with
such equitable remedy. If any provision of this Section 5 is deemed invalid or
unenforceable in any jurisdiction, such provision will be deemed modified and
limited in such jurisdiction to the extent necessary to make it valid and
enforceable in such jurisdiction.
Section 6. Arbitration of Certain Disputes. Any dispute or controversy arising
under or in connection with this Agreement, other than with respect to an
alleged breach of any of any of the provisions of Section 5 shall be resolved by
binding arbitration held in Baltimore, Maryland, before a single arbitrator.
Such arbitration will be conducted in accordance with the Commercial Arbitration
Rules of the American Arbitration Association then in effect and otherwise in
accordance with principles that would be applied by a court of law or equity,
including but not limited to the Maryland Rules of Evidence. The arbitrator of
any proceeding under this Section 6 will prepare
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written findings of fact and conclusions of law. Judgment on any award may be
entered and enforced in any court having jurisdiction.
Section 7. Miscellaneous
7.1 Notices. Any notice or communication required or permitted by this
Agreement will be deemed to be received by the party to whom the notice or
communication is addressed if delivered in person or by commercial courier
service or sent by first class mail, postage prepaid:
7.1.1 if to the Company, addressed to it at 11403A Cronhill Drive,
Owings Mills, Maryland 21117, marked for the attention of the Chief Executive
Officer; and
7.1.2 if to Nicholson, addressed to him at __________________________
__________________________________; or
in either case to such other address as any party notifies the other in
accordance with this section.
7.2 Conflicts. Nicholson represents and warrants to the Company that he
is not under any obligation to any party inconsistent with or in conflict with
this Agreement, or which would prevent, limit, or impair in any way his
performance of his obligations under this Agreement.
7.3 Assignment. This Agreement shall be binding upon and inure to the
benefit of and be binding upon the respective parties, their heirs, personal
representatives and assigns. Notwithstanding the prior sentence, Nicholson may
not subcontract or assign his obligations under this Agreement to any person
without obtaining the prior written consent of the Company. Consent by the
Company to any assignment or subcontract of the services shall not be deemed to
create a contractual relationship between the Company and the subcontracting
party or assignee.
7.4 No Third-Party Beneficiary Rights. No provision of this Agreement
will in any way inure to the benefit of any third person (including the public
at large) so as to constitute any such person a third-party beneficiary of this
Agreement or of any one or more of the terms of this Agreement, or otherwise
give rise to any cause of action in any person not a party to this Agreement.
7.5 Governing Law. The Parties agree that this Agreement shall be
construed, interpreted and enforced as a contract governed by the laws of the
State of Maryland without reference to the rules governing conflict of laws.
7.6 Jurisdiction and Venue. The Parties irrevocably submit to personal
jurisdiction and venue in the State of Maryland for the purpose of any suit,
action or proceeding arising out of or relating to this Agreement.
7.7 Severability. In the event that a court of competent jurisdiction
deems any provision of this Agreement is deemed illegal, invalid or otherwise
unenforceable, the remainder of this Agreement shall be valid and enforced to
the fullest extent permitted by law.
7.8 Entire Agreement. This Agreement, including Exhibit A, contains the
entire agreement between the Parties and is a complete written integration of
the agreement and supercedes any prior agreements between them relating to the
Consulting Services described in this Agreement.
7.9 Future Amendment. This Agreement may not be amended except in writing
and executed by all Parties, and no course of conduct by any parties or among
the Parties will be deemed to amend the terms and conditions of this Agreement,
except if such amendment is reduced to writing and executed by all Parties.
7.10 Waiver. The waiver of any breach of any provision of this Agreement
by any of the Parties does not constitute or operate as a waiver of any other
breach of any provision of this Agreement, and any failure to
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enforce any provision of this Agreement does not operate as a waiver of any
existing or future rights, duties, or obligations arising out of this Agreement.
7.11 Execution. This Agreement may be executed in one or more
counterparts, each of which constitutes a duplicate original.
7.12 Headings. The headings of the sections of this Agreement are for
convenience of reference only and do not constitute a part of this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed
under seal as of the effective date written above.
WITNESS: AVATECH SOLUTIONS, INC.
By: (SEAL)
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Donald "Scotty" Walsh,
Chief Executive Officer
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V. Joel Nicholson
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