Exhibit 10.1

 
Execution Copy
 
 
CONSULTING SERVICE AGREEMENT

This Consulting Service Agreement (this “Agreement”) is made this 13th day of
September, 2006 (the “Commencement Date”) by and between MTM Technologies, Inc.
(the “Company”), with offices at 1200 High Ridge Road, Stamford, Connecticut
06905, and Michael El-Hillow (the “Consultant”), who is domiciled at 171 Wharf
Road, Yarmouth, Maine, 04096.
 
1.       Engagement.
 
The Company hereby engages Consultant to render to the Company the services
described in Section 2, below, during the term described in Section 3, below.
 
2.       Services.
 
The scope of the services to be performed by Consultant will consist of (i)
during the first sixty (60) days following the date of this Agreement, advice
and consultation regarding the transition of the management and oversight of the
finance operations of the Company, and (ii) following such sixty (60) day period
to the end of the Term (as defined below), such services as the Company and the
Consultant shall agree upon from time to time (together, the “Services”),
provided that clause (ii) above shall not require Consultant to make any minimum
time commitment to providing Services to the Company.
 
3.       Term and Termination.
 
(a)    This Agreement will be effective, and Consultant will provide the
Services, commencing on the Commencement Date, and continuing thereafter through
and including June 13th, 2007 (the “Term”).
 
(b)     This Agreement may be terminated by the parties prior to its expiration,
as follows:
 
(i)      By the Company: If Consultant, (1) commits willful or grossly negligent
acts to the substantial detriment of the Company; or (2) breaches any provision
of Section 10 of the Severance Agreement he entered into with the Company, dated
as of December 12, 2005 (the “Severance Agreement”), as modified by the
Agreement and General Release entered into by the Company and Consultant dated
as of September 13th, 2006 (the “Release Agreement”), or if he breaches any
provision of the Release Agreement.
 
(ii)     By Consultant: If the Company breaches any material term or provision
of this Agreement and such breach is not cured within ten (10) days after
Consultant gives the Company written notice complaining of such breach.
 
(c)     This Agreement and Consultant’s Services hereunder will terminate
automatically upon Consultant’s death. In such event, the Company shall pay to
Consultant’s
 
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estate all compensation that would have been owed to Consultant under this
Agreement through the Term of this Agreement, had Consultant lived. Such
compensation shall be paid on a quarterly basis, in accordance with Section 4(a)
of this Agreement.
 
4.       Compensation.
 
(a)     Compensation. For services rendered under this Agreement, the Company
will pay Consultant fees at the rate of Twenty Four Thousand One Hundred
Sixty-Six Dollars and Sixty-Six Cents ($24,166.66) per month, payable in arrears
in twice monthly payments of Twelve Thousand Eighty-Three Dollars and Thirty
Three Cents ($12,083.33) (with the initial payment beginning September 30, 2006
and ending with the final payment on June 15, 2007) in accordance with the
normal payroll practices of the Company. Payments made under this Section 4(a)
shall be made by wire transfer of immediately available funds to such account as
designated in writing from time to time by the Consultant to the Company.
 
(b)     Equity Grants. The parties agree that notwithstanding any provision of
the Severance Agreement, the Release Agreement, or any provision of either of
the following named agreements to the contrary that (i) the Stock Option
Agreement, dated January 3, 2006 between Consultant and the Company shall be
considered null and void and the 250,000 stock options granted thereby shall be
immediately forfeited upon the eighth (8th) day following the delivery to the
Company of the Release Agreement provided that Consultant has not revoked the
Release Agreement prior to such time, and (ii) the 35,000 restricted stock units
granted to Consultant pursuant to the Restricted Stock Unit Agreement dated
January 3, 2006 between Consultant and the Company shall become immediately
vested in full upon the eighth (8th) day following the delivery to the Company
of the Release Agreement provided that Consultant has not revoked the Release
Agreement prior to such time.
 
(c)     Expenses. During the Term, the Company shall not be obligated to
reimburse the Consultant for any business expenses Consultant incurs in the
performance of the Services, unless the Company, in its sole discretion,
approves reimbursement of such business expenses, in advance, and in writing.
 
5.       Independent Contractor.
 
The relationship between the Company and Consultant is that of independent
contractors, and both the Company and Consultant will represent, and will cause
their officers, employees, agents and representatives, if any, to represent to
third parties that Consultant’s capacity hereunder is that of a “consultant” or
“advisor”. Neither party will be the agent of the other for any purpose
whatsoever, have power or authority to make or give any promise, to execute any
contract or otherwise create, or to assume any liability or obligation in the
name of or on behalf of the other party. Neither party will misrepresent, and
each party will cause their officers, employees, agents and representatives, if
any, not to misrepresent, to any third party that it has any power or authority
which is denied to it by the preceding sentence. The making of any such
misrepresentation is a breach of a material term of this Agreement, is not
capable of cure, and is sufficient reason for termination of this Agreement
pursuant to Section 3(b)(i). As an independent contractor, Consultant will not
(except as otherwise provided in the Release
 
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Agreement and this Agreement) be entitled to participate in any
Company-sponsored employee benefits programs, and will be wholly and fully
responsible for any taxes owed to any governmental authority with respect to the
fees set forth in Section 4, above. Consultant represents and warrants that
Consultant will pay any such taxes as and when due.
 
6.       Assignment.
 
This Agreement is personal to the parties hereto and neither party may assign
its rights or delegate its obligations hereunder without the prior written
consent of the other party, which may be withheld without cause or explanation.
Any purported assignment or delegation in violation of this Section shall be
void.
 
7.       Notice.
 
All notices, requests and other communications pursuant to this Agreement shall
be in writing and shall be deemed effective upon (a) personal delivery, if
delivered by hand, (b) the next business day, if sent by a prepaid overnight
courier service, or (c) three days after the date of deposit in the mails, if
mailed by registered or certified mail, and in each case addressed as follows:
 
If to Consultant:          Michael El-Hillow
171 Wharf Road
Yarmouth, ME 04096

If to the Company:        MTM Technologies, Inc.
1200 High Ridge Road
Stamford, Connecticut 06905
Attn.: Chief Executive Officer

With a copy to:        MTM Technologies, Inc.
Stamford, CT 06905
Attn: General Counsel

Either party may change the address to which notices to such party are to be
sent by giving notice of such change of address in the manner provided by this
Section 7.
 
8.       Waiver of Breach.
 
Any waiver of any breach of this Agreement shall not be construed to be a
continuing waiver or consent to any subsequent breach on the part either of
Consultant or of the Company.
 
9.       Severability.
 
To the extent any provision of this Agreement or portion thereof shall be
invalid or unenforceable, it shall be considered deleted therefrom and the
remainder of such provision and of this Agreement shall be unaffected and shall
continue in full force and effect.
 
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10.      Counterparts.
 
This Agreement may be executed in one or more counterparts, each of which shall
be deemed to be an original but all of which together will constitute one and
the same instrument.
 
11.      Governing Law.
 
This Agreement shall be construed, interpreted and enforced in accordance with
the laws of the State of New York, without giving effect to the choice of law
principles thereof.
 
12.      Entire Agreement.
 
This Agreement contains the entire agreement between the Company and Consultant
with respect to Consultant’s provision of future personal services to the
Company.
 
13.      Amendment.
 
No provision of this Agreement may be canceled or amended by the parties hereto
except by an instrument in writing signed on behalf of each of the parties
hereto. A provision of this Agreement may be waived only by a written instrument
signed by the party against whom or which enforcement of such waiver is sought.
 
14.      Dispute Resolution.
 
(a)    Except as specifically provided herein, any dispute or controversy
arising under or in connection with this Agreement shall be, upon the demand of
either party, subject to a non-binding mediation proceeding before a mediator on
the panel of the CPR Institute for Dispute Resolution, such mediator to be
agreed upon by the parties.
 
(b)     If a mediator is not agreed upon or if mediation is not successful, any
dispute or controversy between the Company and Consultant arising under or in
connection with this Agreement (except any claim by the Company relating to
Consultant’s breach of Section 10 of the Severance Agreement, shall be settled
by binding arbitration before a single arbitrator in New York, New York pursuant
to the Employment Dispute Resolution Rules of the American Arbitration
Association (“AAA”). Each party shall bear its own costs, expenses and fees,
including, without limitation, attorneys’ fees and experts’ fees with respect to
any such arbitration. The parties shall share equally the fees of the arbitrator
and the AAA. Judgment upon any resulting arbitration award may be entered in any
court of competent jurisdiction.
 
(c)     Neither party shall be required to mediate or arbitrate any dispute
arising between it and the other party relating to any breach of Section 10 of
the Severance Agreement, but shall have the right to institute judicial
proceedings in the United States District Court for the Southern District of New
York or in a state court having jurisdiction located in the State of New York,
County of New York, with respect to such dispute or claim. Each party hereby
consents to, and waives any objection to, the personal jurisdiction and venue of
the aforesaid courts, and waives any claim that the aforesaid courts constitute
 
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an inconvenient forum and any right to trial by jury. If such judicial
proceedings are instituted, the parties agree that such proceedings shall not be
stayed pending the outcome of any arbitration proceedings hereunder.
 
15.      Insider Trading.
 
Consultant acknowledges and agrees that he is subject to the terms and
conditions of the Company’s Insider Trading Policy, as the same exists from time
to time, and that he will comply with the terms of such policy.
 
16.      Other Activities.
 
Subject to the restrictions imposed upon Consultant by the provisions of Section
10 of the Severance Agreement, the parties agree that Consultant may enter into
agreements to provide consulting services to other persons or entities.
 
 

 

 
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.
 
 
MTM TECHNOLOGIES, INC.
 
By:
/s/ Francis J. Alfano    /s/ Michael El-Hillow  
Name: Francis J. Alfano
 
MICHAEL EL-HILLOW
 
Title:   Chief Executive Officer
   

 
 
 
 
 
(Signature page to El-Hillow Consulting Agreement)
 
 
 
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