Exhibit 10.5
Execution Copy
CONSULTING
AGREEMENT
THIS CONSULTING AGREEMENT (the
“Agreement”), made this 29th day of July, 2008 (the
“Effective Date”), is entered into by Vonage Holdings
Corp., a Delaware corporation (the “Company”), and KEC
Holdings LLC, a Delaware limited liability company (the
“Consultant”).
INTRODUCTION
The Company desires to retain the
services of the Consultant and the Consultant desires to perform
certain services for the Company. In consideration of the mutual
covenants and promises contained herein and other good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged by the parties hereto, the parties agree as
follows:
1. Services . The Consultant
agrees to perform such consulting, advisory and related services to
and for the Company as may be reasonably requested from time to
time by the Board of Directors of the Company (the
“Board”) and the Chief Executive Officer of the
Company. The Consultant agrees to devote a maximum of 40% of its
time, and to cause its President to devote a maximum of 40% of his
business time, to the performance of such services. During the
Consultation Period (as defined below), the Consultant shall not
engage in any activity that has a conflict of interest with the
Company, including any competitive employment, business, or other
activity, and it shall not assist any other person or organization
that competes, or intends to compete, with the Company.
2. Term . This Agreement
shall commence on the Effective Date and shall continue until the
first anniversary of the Effective Date (such period being referred
to as the “Consultation Period”), unless sooner
terminated in accordance with the provisions of Section 4;
provided , however , that the provisions of
Section 6 shall survive termination of this
Agreement.
3. Compensation .
3.1 Consulting Fee . The
Company shall pay to the Consultant an aggregate consulting fee of
$250,000, commencing on the first ordinary Company payroll date
following the Effective Date and payable bi-weekly in substantially
equal installments.
3.2 Reimbursement of Expenses
. During the Consultation Period, the Company shall reimburse the
Consultant for reasonable travel and other business-related
expenses incurred by the Consultant in the fulfillment of its
duties hereunder upon presentation of written documentation
thereof, in accordance with the applicable expense reimbursement
policies and procedures of the Company as in effect from time to
time. With respect to reasonable business-related airline expenses,
the Consultant shall be eligible for air travel reimbursement based
on the cost of a first-class ticket on a commercial airline to and
from the applicable business destination(s). During the
Consultation Period, the Company shall also reimburse the
Consultant for the reasonable, itemized expenses associated with
renting an off-site office space and employing an assistant to
Jeffrey A. Citron; provided , however , that
such
reasonable expenses shall not exceed
an aggregate of $150,000 without the prior approval of the Chief
Executive Officer of the Company.
4. Termination . The Company
may terminate the Consultation Period, effective immediately upon
receipt of written notice, if the Consultant breaches any provision
of Section 6.
5. Cooperation . The
Consultant shall use its best efforts in the performance of its
obligations under this Agreement. The Company shall provide such
access to its information and property as may be reasonably
required in order to permit the Consultant to perform its
obligations hereunder. The Consultant shall cooperate with the
Company’s personnel, shall not interfere with the conduct of
the Company’s business and shall observe all rules,
regulations and security requirements of the Company concerning the
safety of persons and property.
6. Inventions and Proprietary
Information .
6.1 Inventions .
(a) It is contemplated that from the
time to time, the Company may ask the Consultant to provide
technology and business consulting services relating to
telecommunications (the “Project”). The Company shall
provide to the Consultant reasonable access to the Company’s
network, personnel and equipment as necessary for the Consultant to
complete the Project. All intellectual property created or
developed by the Consultant during participation in the Project
(“Inventions”) shall be considered a work for hire for
the benefit of the Company and owned solely by the Company. The
Consultant hereby assigns to the Company all right, title and
interest in all Inventions and any and all related patents,
copyrights, trademarks, trade names and other industrial and
intellectual property rights and applications therefor, in the
United States and elsewhere and appoints any officer of the Company
as its duly authorized attorney to execute, file, prosecute and
protect the same before any government agency, court or authority.
Upon the request of the Company and at the Company’s expense,
the Consultant shall execute such further assignments, documents
and other instruments as may be necessary or desirable to fully and
completely assign all Inventions to the Company and to assist the
Company in applying for, obtaining and enforcing patents or
copyrights or other rights in the United States and in any foreign
country with respect to any Invention. The Consultant also hereby
waives all claims to moral rights in any Inventions.
(b) The Consultant shall promptly
disclose to the Company all Inventions and will maintain adequate
and current written records (in the form of notes, sketches,
drawings
