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Governing Law: Connecticut     Date: 3/29/2005
Industry: Software and Programming     Sector: Technology

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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.



         (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.



         (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.






         (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 Information for any purpose including, without limitation, selling,

leasing,    renting,    licensing,    marketing   or   otherwise    distributing    any

Confidential Information or products or services embodying or derived from same.

The Consultant agrees to use the same degree of care that it uses to protect its

confidential   information   of similar   importance,   to prevent any   unauthorized








disclosure of Confidential   Information,   but in no event less than a reasonable

degree of care.   The   Consultant   shall not   publicize or disclose   beyond those

persons   to   whom   Confidential   Information   may   be   disclosed   hereunder   the

existence   and the terms of this   Agreement   or the   discussions   that   arise in

connection   with   this   Agreement   and all   such   information   shall   be   deemed


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