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.
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(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 Comp
