Consulting Agreement between Diversified Ventures, Inc. and Gene J. DeFeudis

Summary

This agreement, dated December 7, 1999, is between Diversified Ventures, Inc. (doing business as Forward Financial Company) and Gene J. DeFeudis. The company hires DeFeudis as an independent consultant for two years to provide advice and guidance related to its subsidiaries, including acting as an insurance agent and offering operational insights. DeFeudis will be paid $125,000 quarterly, with no employee benefits, and is responsible for his own taxes. The agreement includes confidentiality and non-solicitation clauses and can be terminated under specific conditions, including death, disability, or cause.

EX-10.5 2 b38148bbex10-5.txt CONSULTING AGREEMENT WITH GENE J DEFEUDIS 1 Exhibit 10.5 CONSULTING AGREEMENT 1. IDENTIFICATION This Consulting Agreement (the "Agreement"), dated as of December 7, 1999, is entered into by and between Diversified Ventures, Inc. d/b/a Forward Financial Company, a Massachusetts corporation ("Company"), and Gene J. DeFeudis, an independent contractor ("Consultant"). 2. RECITALS 2.1. Company has acquired Diversified Ventures, Inc. and Ellsmere Insurance Agency, Inc. (the "Subsidiaries") from Consultant. 2.2. Consultant has extensive experience in the businesses in which the Subsidiaries are engaged. 2.3. Company desires to engage Consultant as an independent contractor to render advice and guidance in connection with the businesses of the Subsidiaries. 3. TERM 3.1. Subject to the terms and conditions set forth herein, Consultant's service under this Agreement shall be for a term of two (2) years commencing on the date hereof and expiring at the close of business on the second anniversary of the date hereof (the "Term"). 4. GENERAL TERMS 4.1. Nature of Agreement. The parties acknowledge and agree that Consultant will be retained by Company as an independent contractor, and not as an employee, and that, as an independent contractor of Company, Consultant will be under the control, supervision and direction of Company only as to the results of the services provided to Company under the terms of this Agreement and not as to the means by which such services are provided. 4.2. Duties and Services. During the Term, Consultant agrees to perform such reasonable consulting services as may be assigned to Consultant by the Company's Chief Executive Officer including, but not limited to, utilizing Consultant as an insurance agent of Ellsmere for the Term of this Agreement, providing advice and information to Company on the operations of the Subsidiaries, providing background and historical information on the records and operations of the Subsidiaries, attending occasional meetings or participating in telephonic conferences at mutually agreeable times and locations with clients, customers or employees of the Subsidiaries. Except as specifically set forth herein, or as directed by Company, it is agreed that Consultant shall have no other authority to act on behalf of Company. Consultant, in the rendition of services under this Agreement, shall not be required to make available any particular amount of time or to be available at specific times except by telephone upon reasonable notice. 2 5. COMPENSATION 5.1. Compensation for Services. Subject to Consultant's adherence to the terms and conditions of this Agreement, Consultant shall be paid a quarterly fee of One Hundred Twenty-Five Thousand Dollars ($125,000). The first payment shall be due forty-five (45) days after the date of this Agreement (or the first business day next following such date) and subsequent payments shall be made every ninety (90) days thereafter (or the first business day next following such date) until a total of eight (8) payments are made to Consultant, unless the Agreement is terminated prior to the expiration of the Term, in which case Consultant shall only be entitled to compensation to the extent provided in Article 7. 5.2. No Withholding. Because Consultant is retained as Company's independent contractor and not as an employee, Company and Consultant acknowledge and agree that no federal or state taxes, social security contributions or other deductions shall be made by Company from the payments made to Consultant pursuant to this Article 5, and that Consultant will remain solely liable for the payment of all such taxes. Consultant further acknowledges that Company will report compensation paid pursuant to this Agreement on a Form 1099 at the end of each year in which Consultant's services were provided. Consultant expressly covenants to make such tax payments as may be required by applicable law and to indemnify and hold Company harmless from and against any liability Company may incur as a consequence of Consultant's failure to make such failure to make such payments. 6. BENEFITS 6.1. No Additional Benefits. Consultant shall receive no additional benefits hereunder, and Consultant acknowledges that Company shall not be responsible for providing Consultant with health insurance, pension benefits or any other benefits. 7. TERMINATION 7.1. This Agreement shall terminate in the following circumstances: (a) Upon the death of Consultant; (b) Upon the Disability of Consultant; (c) Upon the termination of Consultant by Company with or without Cause; or (d) By mutual agreement of the parties hereto. 7.2. For purposes of this Agreement, the term "Disability" shall mean that, because of Consultant's physical or mental condition (a) he has been substantially unable to perform his duties hereunder for twelve (12) weeks in any twelve (12) month period; and (b) he has utilized any and 2 3 all benefits available to him under state and federal laws, if applicable, and is either (i) unable to reasonably and effectively carry out his duties with reasonable accommodation by Company or (ii) unable to reasonably and effectively carry out his duties because any reasonable accommodation which may be required would cause Company undue hardship. For purposes of this Agreement, termination for "Cause" shall mean termination of Consultant's services by Company on account of (i) fraud, misappropriation or embezzlement by Consultant in connection with the business of the Company or the Subsidiaries; (ii) any failure of Consultant to perform consulting services under this Agreement; (iii) a material breach of the provisions of this Agreement; or (iv) willful destruction of the property or records of Company or the Subsidiaries or deliberate falsification of Company or Subsidiary records. Notwithstanding anything in this Section 7.2 to the contrary, a termination of Consultant's services for Cause based on clauses (ii) or (iii) above shall not be effective unless Consultant has first received notice from Company which sets forth in reasonable detail the manner in which Consultant has failed to perform such services, in which case Consultant shall have thirty (30) days to cure the same. 7.3. In the event that Consultant is terminated without Cause, Consultant shall be entitled to the compensation otherwise payable to him through the expiration of the Term. 7.4. Except as provided in paragraph 7.3 hereof, upon the termination of this Agreement, Consultant shall be entitled only to compensation accrued through such date, and to no other payments or benefits. 8. CONFIDENTIAL INFORMATION; NON-SOLICITATION; NON-USE 8.1. Non-Disclosure of Confidential Information. As used herein, "Confidential Information" means any and all information affecting or relating to the business of the Company and the Subsidiaries, including without limitation, financial data, customer lists and data, licensing arrangements, business strategies, pricing information or product development materials. "Confidential Information" does not include information that is in the public domain, information that is generally known in the trade, or information that Consultant can prove he acquired wholly independently of his relationship with the Company. Consultant shall not, at any time during the Term or thereafter, directly or indirectly, disclose or furnish to any other person, firm or corporation any Confidential Information, except in the course of the proper performance of his duties hereunder or as required by law (in which event Consultant shall give prior written notice to Company and shall cooperate with Company and Company's counsel in complying with such legal requirements). Promptly upon the expiration or termination of Consultant's engagement hereunder for any reason or whenever the Company so requests, Consultant shall surrender to the Company all documents, drawings, work papers, lists, memoranda, records and other data (including all copies) constituting or pertaining in any way to any of the Confidential Information. 8.2. Non-Solicitation; Non-Use. Consultant shall not, during the Term and for a period of two (2) years from the date of any termination or expiration of his services hereunder, directly or 3 4 indirectly: (a) solicit or hire, or attempt to solicit or hire, any employee of Company or the Subsidiaries, or assist any person, firm or corporation in doing so or attempting to do so; or (b) solicit or cause to be solicited the disclosure of, or use or disclose, any Confidential Information for any purpose whatsoever or for any other party. 9. NON-COMPETITION 9.1. Non-Competition. Consultant shall not, for so long as he is entitled to compensation under or pursuant to this Agreement (whether or not he is actively engaged by the Company hereunder) and for a period of two (2) years from the date of any termination or expiration of his services hereunder, directly or indirectly: (a) compete with the Company or the Subsidiaries; or (b) be interested in, employed by, engaged in or participate in the ownership, management, operation or control of, or act in any advisory or other capacity for, any Competing Entity which conducts its business in the Territory; provided, however, that notwithstanding the foregoing, Consultant may make solely passive investments in any Competing Entity the common stock of which is "publicly held," and of which Consultant shall not own or control, directly or indirectly, in the aggregate securities which constitute more than two (2%) percent of the voting rights or equity ownership of such Competing Entity; or (c) solicit or divert any business or any customer from the Company or assist any person, firm or corporation in doing so or attempting to do so; or (d) cause or seek to cause any person, firm or corporation to refrain from dealing or doing business with the Company or assist any person, firm or corporation in doing so or attempting to do so. For purposes of this Article 9, (i) the term "Competing Entity" shall mean any entity which presently or during the period referred to above engages in any business activity the Company or the Subsidiaries is then engaged in or proposes to be engaged in; and (ii) the term "Territory" shall mean any geographic area in which the Company or the Subsidiaries conducts business during such period. 10. BREACH; RESTRICTION 10.1. Breach of Provisions. In the event that Consultant shall breach any of the provisions of Articles 8 or 9, or in the event that any such breach is threatened by Consultant, in addition to and without limiting or waiving any other remedies available to the Company at law or in equity, the Company shall be entitled to immediate injunctive relief in any court, domestic or foreign, having the capacity to grant such relief, without the necessity of posting a bond, to restrain any such breach or threatened breach and to enforce the provisions of Articles 8 or 9. Consultant acknowledges and agrees that there is no adequate remedy at law for any such breach or threatened breach and, in the event that any action or proceeding is brought seeking injunctive relief, Consultant shall not use as a defense thereto that there is an adequate remedy at law. 10.2. Reasonable Restrictions. The parties acknowledge that the foregoing restrictions, the duration and the territorial scope thereof, as set forth in Articles 8 and 9, are under all of the circumstances reasonable and necessary for the protection of the Company, the Subsidiaries and their business. 4 5 11. MISCELLANEOUS 11.1. Binding Effect. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective legal representatives, heirs, distributees, successors and assigns; provided that the rights and obligations of Consultant hereunder shall not be assignable by him. 11.2. Notices. Any notice provided for herein shall be in writing and shall be deemed to have been given or made when personally delivered or three (3) days following deposit for mailing by first class registered or certified mail, return receipt requested, or if delivered by facsimile transmission, upon confirmation of receipt of the transmission, to the Consultant, at his address maintained in the records of the Company, or, to the Company, at its executive offices. 11.3. Severability. If any provision of this Agreement, or portion thereof, shall be held invalid or unenforceable by a court of competent jurisdiction, such invalidity or unenforceability shall attach only to such provision or portion thereof, and shall not in any manner affect or render invalid or unenforceable any other provision of this Agreement or portion thereof, and this Agreement shall be carried out as if any such invalid or unenforceable provision or portion thereof were not contained herein. In addition, any such invalid or unenforceable provision or portion thereof shall be deemed, without further action on the part of the parties hereto, modified, amended or limited to the extent necessary to render the same valid and enforceable. 11.4. Arbitration. Any controversy, claim or dispute arising out of or in any way relating to this Agreement, the alleged breach thereof, and/or Consultant's engagement with the Company or termination therefrom, including without limitation, any and all claims for discrimination or harassment, shall be determined by binding arbitration administered by the American Arbitration Association under its National Rules for Resolution of Employment Disputes ("Rules") which are in effect at the time of the arbitration or the demand therefor. The Rules are hereby incorporated by reference. In reaching a decision, the arbitrator shall have no authority to change, extend, modify or suspend any of the terms of this Agreement. The arbitration shall be commenced and heard in Boston, Massachusetts. The arbitrator(s) shall apply the substantive law (and the law of remedies, if applicable) of Massachusetts or federal law, or both, as applicable to the claim(s) asserted. Judgment on the award may be entered in any court of competent jurisdiction, even if a party who received notice under the Rules fails to appear at the arbitration hearing(s). The parties may seek, from a court of competent jurisdiction, provisional remedies or injunctive relief in support of their respective rights and remedies hereunder without waiving any right to arbitration. However, the merits of any action that involves such provisional remedies or injunctive relief, including, without limitation, the terms of any permanent injunction, shall be determined by arbitration under this paragraph. 11.5. Attorneys' Fees. The parties agree that the prevailing party in any action, controversy or dispute arising out of or relating to this Agreement or the breach of any provision hereof, shall be entitled to reimbursement by the losing party of all costs and expenses including, but not limited to, reasonable attorneys' fees and costs resulting from any action or proceeding filed in accordance 5 6 with the terms of Section 11.4 hereof or otherwise to enforce any term of this Agreement or for any damage by reason of an alleged breach of any term of this Agreement. 11.6. Waiver. No waiver by a party hereto of a breach or default hereunder by the other party shall be considered valid unless in writing signed by such first party, and no such waiver shall be deemed a waiver of any subsequent breach or default of the same or any other nature. 11.7. Entire Agreement. This Agreement sets forth the entire agreement between the parties with respect to the subject matter hereof, and supersedes any and all prior agreements or understanding between the Company and Consultant, whether written or oral, fully or partially performed relating to any or all matters covered by and contained or otherwise dealt with in this Agreement. It is expressly understood that this Agreement is deemed delivered to Company after the delivery by Consultant of a Release and Indemnity Agreement in favor of Company. 11.8. Amendment. No modification, change or amendment of this Agreement or any of its provisions shall be valid unless in writing and signed by the party against whom such claimed modification, change or amendment is sought to be enforced. 11.9. Applicable Law. This Agreement, and all of the rights and obligations of the parties in connection with the employment relationship established hereby, shall be governed by and construed in accordance with the substantive laws of Massachusetts without giving effect to principles relating to conflicts of law. 11.10. Counterparts. Thus Agreement may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. 6 7 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. ATTEST: DIVERSIFIED VENTURES, INC. /s/ David P. Conley /s/ David F. Holland - ------------------------------------ ---------------------------------------- /s/ John D. Mullen /s/ Gene J. Defeudis - ------------------------------------ ---------------------------------------- Witness GENE J. DEFEUDIS 7