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Exhibit 10.1
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (the "Agreement"), dated as of
November 1,
2004, by and between Kevin S. Flannery, an individual residing
at 255 Farmington
Drive, Charlottesville, VA 22901 (the "Consultant") and
Scan-Optics, Inc., with
its principal place of business at 169 Progress Drive,
Manchester, Connecticut
06040 (the "Company").
WHEREAS, the Consultant is an independent contractor who
provides
consulting services; and
WHEREAS, the Company wishes to obtain such services for its
benefit.
NOW THEREFORE, in consideration of the mutual covenants set
forth
herein, the parties hereto, for good and valuable consideration,
the sufficiency
and receipt of which are hereby acknowledged, agree as
follows:
1. Services. The Company hereby engages the Consultant to
provide to
the Company consulting, advisory and related services to and for
the Company as
may be reasonably requested from time to time by the Chief
Executive Officer or
Board of Directors (the "Services"). The Consultant shall devote
such time to
the performance of such services as may be required to fulfill
his obligations
under this Agreement, but, in no event shall the Consultant
devote to the
performance of such services less than six (6) hours during any
month, excluding
time spent, as a director, in connection with preparing for and
attending Board
and committee meetings. Consultant shall provide the Services at
times and
places mutually agreed upon by the Company and Consultant.
2. Fees and Expenses.
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(a) Consulting Fees. The Company shall pay to the Consultant
consulting
fees of $1,666.67 per month (the "Monthly Consulting Fee"),
payable in arrears
on the last day of each month. Payment for any partial month
shall be prorated.
(b) Reimbursement of Expenses. The Company shall reimburse
the
Consultant for all reasonable and necessary expenses incurred or
paid by the
Consultant in connection with, or related to, the performance of
his services
under this Agreement. The Consultant shall submit to the Company
itemized
monthly statements, in a form satisfactory to the Company, of
such expenses
incurred in the previous month. The Company shall pay to the
Consultant amounts
shown on each such statement within thirty (30) days after
receipt thereof.
(c) All Fees and Expenses shall be paid to the Consultant net
of
applicable withholding, sales or similar taxes.
3. Term.
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(a) Subject to paragraph 3(b), the term of this Agreement
shall
commence on November 1, 2004 and shall continue until terminated
in accordance
with this Agreement.
<PAGE>
(b) Either party may terminate this Agreement, for any reason or
no
reason, upon thirty (30) business day's prior notice (the
"Termination Date") to
the other party.
Upon the termination of this Agreement pursuant to this Section
3(b),
the Company shall reimburse the Consultant for all out-of-pocket
expenses
incurred by the Consultant in the performances of Services which
have not been
previously reimbursed by the Company. The Monthly Fee shall be
deemed fully
earned when paid.
4. Nature of Relationship. The Consultant will act under this
Agreement
as independent contractors with duties solely to the Company.
Nothing in this
Agreement shall be deemed to create a fiduciary, agency,
employment or joint
venture relationship between the Consultant, on one hand, and
the Company, on
the other hand. Nothing in this Agreement shall be deemed to
confer on any
person or entity other than the Consultant and the Company or
their respective
successors and assigns any relationship, rights or remedies
under or by reason
of this Agreement or of the Services to be rendered by the
Consultant.
5. Use of Materials. The Company acknowledges that all advice
(whether
written or oral) given by the Consultant to the Company in
connection with the
Services or otherwise under this Agreement is intended solely
for the benefit
and use of the Company (limited to its management and its
Board). The Company
agrees that, except as required by law, no such advice shall be
used for any
other purpose or reproduced, disseminated, quoted or referred to
at any time in
any manner, nor shall any public references to the Consultant be
made by the
Company, without the Consultant's prior written consent.
6. Confidentiality. For purposes of this Agreement,
"Confidential
Information" shall mean any and all information disclosed by the
Company to the
Consultant relating to its business or technology that Company
designates as
being "non-public" or "confidential" or which, under the
circumstances
surrounding disclosure, the Consultant reasonably should
recognize should be
treated as confidential. Confidential Information includes, for
example and
without limitation, Company's confidential business or technical
information,
such as financial information or data, marketing techniques and
material,
business plans and strategies, business operation and systems,
pricing policies,
information concerning employees, customers, and/or vendors,
trade secrets,
discoveries, inventions, improvements, research, development,
know-how, designs,
products, compositions, prototypes, or physical materials and
manufacturing
processes. The Consultant may use the Confidential Information
only to provide
the Services, and shall hold any Confidential Information
confidential in
accordance with its customary policies relating to any
non-public or proprietary
information at least as broad in scope as the Consultant's
obligations
hereunder. The Consultant may only disseminate Confidential
Information to those
employees, members, attorneys, consultants or associates of the
Consultant who
have: (i) a demonstrable need to know; (ii) been informed of the
Consultant's
obligations hereunder; and (iii) are bound by an obligation of
confidentiality
to the Consultant. A breach of such agreement shall be
considered a material
breach hereunder. Except as expressly provided in the preceding
two sentences,
the Consultant shall not: (i) publish, disseminate or otherwise
disclose or make
available Confidential Information received hereunder to any
person, Consultant
or corporation without prior written consent of the Company; or
(ii) use
Confidential Inf
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