Document:

ex10-27.htm

Exhibit 10.27

 

DATED

11th August 2008

 

	 	(1)	HUDDERSFIELD & DISTRICT

TEXTILE TRAINING CO. LIMITED	 
	 	 	 	 
	and
	 
	 	(2)	APPLIED DNA SCIENCES	 

 

AGREEMENT NUMBER:

 

CD/88

 

  

1

  

	
TABLE OF CONTENTS

	  	
 

 

	 	 	
PAGE

	 	 
	
PARTICULARS

	
4

	 	 
	
RECITALS:

	
6

	 	 
	
1.

	
DEFINITIONS AND INTERPRETATION

	
6

	 	 	 
	
2.

	
CONTRACTOR’S WARRANTIES AND REPRESENTATIONS

	
9

	 	 	 
	
3.

	
DURATION

	
10

	 	 	 
	
4.

	
DELIVERY OF THE PROJECT

	
10

	 	 	 
	
5.

	
PROCUREMENT

	
11

	 	 	 
	
6.

	
PAYMENT OF GRANT

	
12

	 	 	 
	
7.

	
FUNDING SOURCES

	
14

	 	 	 
	
8.

	
PROJECT MANAGEMENT

	
15

	 	 	 
	
9.

	
ASSIGNMENT AND SUB-CONTRACTING

	
15

	 	 	 
	
10.

	
PROJECT RECORDS AND REPORTING

	
16

	 	 	 
	
11.

	
COMPLIANCE WITH LEGISLATION

	
17

	 	 	 
	
12.

	
CAPITAL ASSETS

	
18

	 	 	 
	
13.

	
INTELLECTUAL PROPERTY

	
18

	 	 	 
	
14.

	
GENERAL INDEMNITY AND INSURANCE

	
19

	 	 	 
	
15.

	
RECOVERY OF GRANT

	
20

	 	 	 
	
16.

	
TERMINATION

	
21

	 	 	 
	
17.

	
HUDDERSFIELD & DISTRICT TEXTILE TRAINING CO LTD PUBLICITY REQUIREMENTS

	
22

	 	 	 
	
18.

	
TRANSFER OF RESPONSIBILITY ON EXPIRY OR TERMINATION

	
22

	 	 	 
	
19.

	
SEVERABILITY

	
22

	 	 	 
	
20.

	
AMENDMENTS

	
23

	 	 	 
	
21.

	
EXCESS PROFITS AND DEVELOPMENTS

	
23

	 	 	 
	
22.

	
WAIVER

	
23

	 	 	 
	
23.

	
NOTICES

	
23

	 	 	 
	
24.

	
REPUTATION OF HUDDERSFIELD & DISTRICT TEXTILE TRAINING CO LTD

	
24

 

  

2

  

 

	
25.

	
NON SOLICITATION AND CONFLICT OF INTEREST

	
24

	 	 	 
	
26.

	
NO PARTNERSHIP OR AGENCY

	
24

	 	 	 
	
27.

	
GOVERNING LAW AND JURISDICTION

	
24

	 	 	 
	
28.

	
ENTIRE AGREEMENT

	
24

	 	 	 
	
29.

	
INTEREST ON LATE PAYMENTS

	
24

	 	 	 
	
30.

	
VAT

	
25

	 	 	 
	
31.

	
FREEDOM OF INFORMATION ACT 2000

	
25

	 	 	 
	
32.

	
THIRD PARTY RIGHTS

	
26

	 	 	 
	
SCHEDULE 1 PROJECT OPERATIONAL PLAN

	
27

	 	 
	
SCHEDULE 2 SUMMARY OF QUALIFYING EXPENDITURE, TOTAL PROJECT EXPENDITURE AND FUNDING SOURCES

	
30

	 	 
	
SCHEDULE 3 PROFILE OF PLANNED MONTHLY FINANCIAL CLAIMS TO BE MADE AGAINST THE AGREEMENT

	
31

 

  

3

  

 

PARTICULARS

	
Terms

	
Definitions

	  	  
	
1. DATE:

	
11th August 2008

	  	  
	
2.

	
HUDDERSFIELD & DISTRICT TEXTILE TRAINING CO LTD Textile House, Red Doles Lane, Huddersfield, West Yorkshire, HD2 1YF

	  	  
	
3. CONTRACTOR

	
APPLIED DNA SCIENCES 25 Health Sciences Drive Stony Brook, NY 11790 USA

	  	  
	
4. CONDITIONS PRECEDENT

	
(a) Huddersfield & District Textile Training Co Ltd being satisfied that the Contractor has sufficient funding (whether from its own resources or otherwise) to carry out and complete the Project in accordance with this Agreement;

	  	  
	  	
(b) Huddersfield & District Textile Training Co Ltd shall have received such evidence as may be necessary to establish that the representations and warranties by the Contractor in this Agreement are true and accurate in all respects and are not misleading; and

	  	  
	
5. CONDITIONS PRECEDENT END DATE

	
not applicable

	  	  
	
6. CONTRACTOR’S BANK ACCOUNT

	  
	  	  
	
7. CONTRACTOR’S MANAGER

	
Jim Hayward of Applied DNA Sciences or any replacement from time to time agreed in writing by Huddersfield & District Textile Training Co Ltd in accordance with Clause 8

	  	  
	
8. EFFECTIVE DATE

	
11th August 2008

	  	  
	
9. INSTALMENT PERIOD

	
the period of one month from the Effective Date and each subsequent period of one month until 19th December 2008

 

  

4

  

 

	
10. MAXIMUM AMOUNT

	  	
The maximum amount available to be claimed by the Contractor under this Agreement being (subject to Clause 6.5 and any other provisions of this Agreement) fifty thousand pounds, (£50,000) including non-recoverable VAT which is allocated between the following Financial Years as follows:-

	  	  	  
	 	 	
Financial Year 

	Allocation
	 	 	 	 
	  	  	
2008-2009

	
£50,000

	  	  	
2009-2010

	
£ 0

	  	  	
2010-2011

	
£ 0

	  	  	  
	
11. TERM

	
:

	
The period from the Effective Date until 19th December 2008 or until termination in accordance with this Agreement (whichever is earlier)

	  	  	  
	
12. PROJECT NAME

	
:

	
Technical Textiles Capacity Building

	  	  	  
	
13. PROJECT REFERENCE NUMBER

	
:

	
901647 being Yorkshire Forward’s Project Reference Number for the Project

	  	  	  
	
14. QUALIFYING EXPENDITURE

	
:

	
Those items of expenditure (being part of the Project Expenditure) identified in the table in Schedule 2

	  	
   as

	  
	  	  	
being funded by Huddersfield & District Textile Training Co Ltd but excluding all other Project Expenditure

	  	  	  
	
15. HUDDERSFIELD & DISTRICT TEXTILE TRAINING CO LTD’S  REPRESENTATIVE

	  	
Bill Macbeth, of Huddersfield & District Textile Training Co Ltd, Textile House, Red Doles Lane, Huddersfield, West Yorkshire, HD2 1YF or such other person or persons from time to time appointed in replacement by Huddersfield & District Textile Training Co Ltd and notified in writing to the Contractor.

 

  

5

  

 

THIS AGREEMENT is made on the date set out in paragraph 1 of the Particulars

 

BETWEEN:

 

	
(1)

	
HUDDERSFIELD & DISTRICT TEXTILE TRAINING CO LTD whose head office is at Textile House, Red Doles Lane, Huddersfield, West Yorkshire, HD2 1YF and

 

	
(2)

	
THE CONTRACTOR (as described in the Particulars)

 

RECITALS:

 

	
(A)

	
The Contractor has requested grant funding from Huddersfield & District Textile Training Co Ltd for the Project which falls within one or more of the objectives referred to above.

 

	
(B)

	
Huddersfield & District Textile Training Co Ltd has agreed to provide the Grant for the Project subject to and on the basis of the terms and conditions set out below.

 

	
(C)

	
Huddersfield & District Textile Training Co Ltd and the Contractor declare that the Conditions Precedent referred to in paragraph 4 of the Particulars have been fulfilled

 

IT IS AGREED as follows:

 

	
1.

	
DEFINITIONS AND INTERPRETATION

 

	
1.1

	
In this Agreement unless the context otherwise requires the following words and expressions shall have the following meanings and the definitions set out on the Particulars pages at the front of this Agreement are incorporated into this Agreement:

 

“Approved Claim Form” means the standard claim form which the Contractor must submit to claim instalments of the Grant such document to be in the form from time to time specified by Huddersfield & District Textile Training Co Ltd;

 

“Base Interest Rate” means the base rate of Barclays Bank Plc (or the base rate of such other bank as Huddersfield & District Textile Training Co Ltd may from time to time stipulate) or if such base rate shall not be readily available at any time or times such other rate as Huddersfield & District Textile Training Co Ltd shall determine;

 

“Beneficiary Data” means information about an individual person or business directly benefiting from the Project ie the person or business who is or will be the ultimate recipient of a benefit;

 

“Capital Asset” means any item of equipment or other moveable asset which has a purchase value of £1,000 or more and which (a) on the date of its purchase by the Contractor has a useful life of more than one year, and (b) is purchased wholly or partly out of funds provided under this Agreement;

 

“Consents” means any approval, consent, exemption, licence, permission or registration by or from any governmental or other authority or any other person or authority in relation to the Project or any part of it or otherwise required to enable the same to be lawfully carried out and maintained;

 

“Control” means the ability to direct the affairs of the Contractor whether by virtue of ownership of shares, control of the board of directors, contract or otherwise;

 

  

6

  

 

“Developments” means all materials and information coming into existence during the Term relating to the Project including learning and training material, Intellectual Property, website design, source codes and software whether wholly or partly funded by Huddersfield & District Textile Training Co Ltd;

 

“Diversity” means, in the context of this contract, the promotion of a culture that values what people’s individual differences can bring to an undertaking in the pursuit of a just and fair society within the framework of the Regional Economic Strategy;

 

“Environmental Information Regulations” means the Environmental Information Regulations 2004;

 

“Events of Default” means any of the events or circumstances described in clause 16.2;

 

“EU” means European Union;

 

“Financial Year” means Yorkshire Forward’s financial year that runs from 1 April to 31 March;

 

“FOIA” means the Freedom of Information Act 2000 and any subordinate legislation made under this Act from time to time together with any guidance and/or codes of practice issued pursuant to or in relation to such legislation;

 

“Grant” means the amount to be provided by Huddersfield & District Textile Training Co Ltd as reimbursement of actual Qualifying Expenditure paid and incurred by the Contractor in relation to the Project up to the Maximum Amount and subject to the terms of this Agreement;

 

“Her Majesty’s Government” means the duly elected Government for the time being during the reign of Her Majesty (and her successors) and/or any department, committee, office, agency, servant or officer of such Government;

 

“ICT” means information and communications technology;

 

“Information” has the meaning given under section 84 of the FOIA and shall include all environmental information within the meaning given to it in the Environmental Information Regulations;

 

“Intellectual Property” means any or all of the following: patents, trade marks, service marks, drawings, designs, registered designs, utility models, design right, copyright (including copyright in computer software), database rights, inventions, trade secrets and other confidential information, technical information, know-how, business or trade names, rights to prevent passing off, and all other intellectual property rights and rights of a similar or corresponding nature in any part of the world, whether registered or not or capable of registration or not and including all applications and the right to apply for any of the foregoing rights;

 

“Outputs” means the Outputs listed in paragraph 13 of Schedule 1;

 

“Particulars” means the Particulars pages at the front of this Agreement;

 

“Project” means the activities and/or services to be performed and outputs to be achieved by the Contractor as described in Schedule 1;

 

“Project Expenditure” means the expenditure paid and incurred by the Contractor in relation to the Project;

 

  

7

  

 

“Project Intellectual Property” means all Intellectual Property arising from or which comes into existence as a result of carrying out the Project;

 

“Project Operational Plan” means the plan contained in Schedule 1;

 

“Public Sector Bodies” means all bodies, whether public, private, or mixed, in respect to the tasks they undertake that are paid by public funds including (without limitation) any government department or authority, any non departmental government body and any local and public authority;

 

“Quarter Day” means 30 June, 30 September, 31 December and 31 March in each Financial Year;

 

“Regional Brand Logo” means the ‘Yorkshire Alive with Opportunity!’ logo as specified in Schedule 4;

 

“Requests for Information” shall have the meaning set out in FOIA and shall in addition include all requests for environmental information made in accordance with the Environmental Information Regulations and/or pursuant to any other statutory requirements;

 

“Sustainable Development” means social progress that recognises the needs of everyone, effective protection of the environment, prudent use of natural resources and economic development that is inclusive, efficient and stable;

 

“Statement of Grant Expenditure” means a full summary of income and expenditure incurred by the Contractor within the terms and conditions of this Agreement given by Huddersfield & District Textile Training Co Ltd in the preceding Financial Year;

 

“Trade Marks” means any logos, marks, names (including trade names) and trade mark registrations and applications for registration made, owned or used by Yorkshire Forward including without limitation the Regional Brand Logo and the Huddersfield & District Textile Training Co Ltd Logo;

 

“VAT” means value added tax payable by virtue of the Value Added Tax Act 1994 and any similar tax from time to time in addition to it, replacing it or performing a similar fiscal function;

 

“Working Day” means a day on which clearing banks in the City of London are (or would be but for a strike, lock-out or other stoppage affecting a particular bank or banks generally) open during banking hours and “Working Days” shall be construed accordingly;

 

“Yorkshire Forward Logo means the ‘Yorkshire Forward’ logo as specified in Schedule 4;

 

	
1.2

	
References to Clauses, sub-clauses and Schedules are to clauses, sub-clauses and schedules in this Agreement unless otherwise stated.

 

	
1.3

	
Headings are for convenience only and shall not affect the interpretation of this Agreement.

 

	
1.4

	
In this Agreement references to the masculine include the feminine and the neuter, and the singular shall include the plural, and vice versa as the context admits or requires.

 

  

8

  

 

	
1.5

	
In this Agreement references to any statute or statutory provision shall, unless the context otherwise requires, be construed as a reference to that statute or statutory provision as from time to time amended, consolidated, modified, extended, re-enacted or replaced.

 

	
1.6

	
Where there are two or more persons included in the expression “the Contractor” the obligations and warranties expressed to be entered into or given by the Contractor shall be deemed to be entered into or given by such persons jointly or severally.

 

	
1.7

	
Wherever in this Agreement there is a right of inspection for Huddersfield & District Textile Training Co Ltd in relation to the Project including (without limitation) a right to review, inspect and copy any documentation and right of entry on to any premises to review the Project or to inspect any documentation such rights shall extend to any agents, employees or licensees nominated from time to time by Huddersfield & District Textile Training Co Ltd.

 

	
1.8

	
All the schedules shall be part of this Agreement and all the obligations of the parties contained therein are legal and binding obligations in this Agreement.

 

2.           CONTRACTOR’S WARRANTIES AND REPRESENTATIONS

 

The Contractor represents and warrants to Huddersfield & District Textile Training Co Ltd that:

 

	
2.1

	
the Contractor is validly existing and that the execution on behalf of the Contractor of this Agreement has been validly authorised and the obligations expressed as being assumed by the Contractor under this Agreement constitute valid legal and binding obligations of the Contractor enforceable against the Contractor in accordance with their terms;

 

	
2.2

	
neither the execution of this Agreement by the Contractor nor the performance or observation of any of its obligations under it will:

 

	
  

	
2.2.1

	
conflict with or result in any breach of any law or enactment or any deed, agreement or other instrument, obligation or duty to which the Contractor is bound; or

 

	
  

	
2.2.2

	
cause any limitation on any of the powers whatsoever of the Contractor or on the right or ability of the directors of the Contractor to exercise such powers, to be exceeded;

 

	
2.3

	
the Contractor is not in default under any law or enactment or under any deed agreement or other instrument or obligation by which it is bound so as to affect adversely its ability to perform its obligations under this Agreement;

 

	
2.4

	
all Consents required in connection with the execution, delivery, issue, validity or enforceability of this Agreement have been obtained and have not been withdrawn;

 

	
2.5

	
no litigation or administrative or arbitration proceeding before any court, tribunal, Government authority or arbitrator is presently taking place, pending or (to the knowledge, information and belief of the Contractor) threatened against, or against any of the assets of the Contractor which might have a material adverse effect on its business, assets, condition or operations or might affect adversely its ability to perform its obligations under this Agreement;

 

  

9

  

 

	
2.6

	
all information, documents and accounts of the Contractor submitted to Huddersfield & District Textile Training Co Ltd for its appraisal of the Project for the purposes of this Agreement are true and accurate and no change has occurred since the date on which such information was supplied which renders the same untrue or misleading in any respect and that there has been no material adverse change in the business, assets, operations or prospects of the Contractor since such information was provided;

 

	
2.7

	
the Contractor has disclosed to Huddersfield & District Textile Training Co Ltd all information which would or might reasonably be thought to influence Huddersfield & District Textile Training Co Ltd in awarding the Grant to the Contractor or the amount thereof;

 

	
2.8

	
no person having any charge or other form of security over the assets of the Contractor has enforced or given notice of its intention to enforce such security;

 

	
2.9

	
the Contractor is not aware, after due enquiry, of anything which materially threatens the delivery and completion of the Project in accordance with this Agreement;

 

	
2.10

	
no Event of Default has occurred and is continuing; and

 

	
2.11

	
the representations in clauses 2.1 – 2.10 above will be deemed to be repeated by the Contractor when each claim for an instalment of Grant is submitted pursuant to clause 6 as if made with reference to the facts and circumstances existing at such date

 

and the Contractor acknowledges that Huddersfield & District Textile Training Co Ltd has relied on and will rely on this information in agreeing to pay the Grant.

 

3.            DURATION

 

This Agreement shall commence on the Effective Date and (subject to clauses 6.1(c), 15, 16 and any of the other provisions of this Agreement) shall continue for the duration of the Term.

 

4.            DELIVERY OF THE PROJECT

 

4.1          The Contractor agrees with Huddersfield & District Textile Training Co Ltd that:-

 

(a)           It shall commence the Project by the Effective Date;

 

	
  

	
(b)

	
It shall diligently carry out and complete the Project promptly and efficiently in accordance with all the Consents and shall achieve all the aims and objectives of the Project Operational Plan as set out in Schedule 1; and

 

	
  

	
(c)

	
It shall deliver all the Outputs by the relevant dates as set out in paragraph 13 of Schedule 1.

 

	
4.2

	
The Contractor shall:

 

	
  

	
(a)

	
Permit Huddersfield & District Textile Training Co Ltd at all reasonable times and upon such notice as is reasonable in all circumstances to inspect the Project and progress made;

 

	
  

	
(b)

	
Attend regular review meetings with Huddersfield & District Textile Training Co Ltd to discuss progress. Such meetings may be required by Huddersfield & District Textile Training Co Ltd on a monthly basis but in any event will be no less than quarterly in each Financial Year;

 

  

10

  

 

	
  

	
(c)

	
Cooperate fully and provide all information and assistance as required by Huddersfield & District Textile Training Co Ltd for the purpose of review and evaluation of the Project, the Grant and this Agreement, such reviews to be at Huddersfield & District Textile Training Co Ltd’s discretion and may take place at any time and at reasonable notice to the Contractor.

 

	
4.3

	
The Contractor shall ensure that the Project promotes Diversity and demonstrates a commitment to equal opportunities.

 

	
4.4

	
The Contractor shall ensure that the planning and operation of the Project reflect the principles of Sustainable Development to ensure sustainability within the region.

 

	
4.5

	
The Contractor shall promptly notify Huddersfield & District Textile Training Co Ltd in writing as soon as it becomes aware that it does not intend to claim the Maximum Amount of the Grant available for the Project.

 

	
4.6

	
Where this Agreement covers projects delivering business support, skills, social inclusion or innovation Huddersfield & District Textile Training Co Ltd reserves the right to impose at any time during the term and at no extra cost to Huddersfield & District Textile Training Co Ltd, additional monitoring and publicity requirements relevant to other funding programmes. Contractors will be given a minimum of 30 days’ notice in writing of the introduction and detail of such requirements and will be offered administrative support in their introduction.

 

	
4.7

	
Huddersfield & District Textile Training Co Ltd are committed to creating sustainable communities that are safer, greener, cleaner and more prosperous. Where applicable the Contractor shall ensure that the planning and operation of the Project reflect the concept of crime prevention through environmental design to prevent crime and disorder in the region.

 

	
4.8

	
The Contractor shall abide by all United Kingdom and EU State Aid laws that are applicable.  Where the Contractor is a public authority, it should satisfy itself whether State Aid laws apply to the Project in consultation with the Department of Trade and Industry.  Recipients of illegal State Aid will risk being held responsible for meeting the cost of any penalty applied in the event that the Project is found to have infringed the State Aid laws and also risk actions for damages from third parties. The Contractor agrees to provide any information necessary to allow Huddersfield & District Textile Training Co Ltd to complete any returns required under the State Aid laws.

 

5.            PROCUREMENT

 

	
5.1

	
All procurement of works, equipment, goods and services shall be based on value for money and in accordance with all relevant law including EU Procurement Directives if applicable.

 

	
5.2

	
For all purchases the Contractor shall comply with the requirements of this clause 5 unless it has the prior written consent of Huddersfield & District Textile Training Co Ltd.

 

	
5.3

	
All purchases by the Contractor with a contract value of over £10,000 shall be subject to competitive tendering in accordance with UK and EU public sector procurement rules including, where appropriate, through the Official Journal of the EU. At least three (and wherever feasible a minimum of five) written tenders should be obtained. In determining how this requirement should be met, the Contractor must take account of public sector accountability and probity, and shall document the decision making process.

 

  

11

  

 

	
5.4

	
The Contractor will not split purchases to fall below the thresholds set out in this clause 5 nor extend existing contracts so that the total value of the contract for its duration exceeds these thresholds.

 

	
5.5

	
For all purchases the Contractor shall select a supplier from the potential suppliers on the basis of:

 

(a)           overall value for money;

 

(b)           suitable skills and experience

 

(c)           its equal opportunities obligations set out at clause 11; and

 

in making the selection of the supplier use a fair and documented decision making process and take account of public sector accountability and probity.

 

	
5.6

	
Huddersfield & District Textile Training Co Ltd reserves the right after reasonable notice to the Contractor to vary from time to time the requirements relating to procurement processes in line with Huddersfield & District Textile Training Co Ltd’s own procurement guidelines and procedures.

 

6.            PAYMENT OF GRANT

 

	
6.1

	
Unless paragraph (C) of the recitals to this Agreement shall contain a declaration by the parties that all the Conditions Precedent have been fulfilled as at the date of this Agreement:0

 

	
  

	
(a)

	
Huddersfield & District Textile Training Co Ltd shall not be obliged to pay any part of the Grant to the Contractor unless it is satisfied (acting reasonably) that the Conditions Precedent specified have been met.

 

	
  

	
(b)

	
Huddersfield & District Textile Training Co Ltd may in its absolute discretion and on such terms as it may specify agree to pay part of the Grant to the Contractor before some or all of the Conditions Precedent have been met but if Huddersfield & District Textile Training Co Ltd does so this will not prejudice its right to refuse to pay any further funding until the Conditions Precedent are met.

 

	
  

	
(c)

	
If any of the Conditions Precedent have not been fully complied with by the Conditions Precedent End Date or such later date as Huddersfield & District Textile Training Co Ltd may in its absolute discretion agree (whether or not the previous date fixed hereunder is past) Huddersfield & District Textile Training Co Ltd may by notice in writing to the Contractor determine this Agreement and all sums paid under this Agreement shall forthwith be repaid to Huddersfield & District Textile Training Co Ltd together with interest thereon at the Base Interest Rate from the date of demand until the date of repayment. 

 

	
6.2

	
Subject to the provisions of this Agreement Huddersfield & District Textile Training Co Ltd shall make payments of the Grant into the Contractor’s Bank Account specified in the Particulars (not exceeding in total the Maximum Amount) in instalments as follows:-

 

	
  

	
(a)

	
Each instalment will be paid within Forty Working Days of receipt by Huddersfield & District Textile Training Co Ltd of a valid claim for an instalment of the Grant submitted in accordance with this clause;

 

  

12

  

 

	
  

	
(b)

	
Payments of instalments of the Grant shall (subject to the limits contained in this clause 6) be made by reference to the amount of Qualifying Expenditure to which the relevant claim relates;

 

	
  

	
PROVIDED THAT the total amount of all payments made by Huddersfield & District Textile Training Co Ltd under this Agreement shall not in any event exceed the Maximum Amount.

 

	
6.3

	
Unless Huddersfield & District Textile Training Co Ltd otherwise agree Huddersfield & District Textile Training Co Ltd shall not be liable to provide (or as the case may be continue to provide) the Grant (or any instalment thereof):-

 

(a)          Unless a claim by the Contractor for an instalment of the Grant shall:-

 

	
  

	
(i)

	
be submitted in the form of the Approved Claim Form and certify that the amount claimed is in accordance with this Agreement and that the claim does not include any Project Expenditure being claimed from any other person or from Huddersfield & District Textile Training Co Ltd within the terms of any other arrangement with Huddersfield & District Textile Training Co Ltd;

 

	
  

	
(ii)

	
relate to Qualifying Expenditure in relation to which the Contractor has not submitted any other claim to Huddersfield & District Textile Training Co Ltd;

 

	
  

	
(iii)

	
be submitted to Huddersfield & District Textile Training Co Ltd’s Representative within 3 days of the end of the Instalment Period in respect of which the Qualifying Expenditure was paid;

 

	
  

	
(iv)

	
include (to the reasonable satisfaction of Huddersfield & District Textile Training Co Ltd) evidence that the Qualifying Expenditure to which the claim relates has been incurred and that payment has been made by the Contractor;

 

(b)          If an Event of Default has occurred and is continuing;

 

	
  

	
(c)

	
If the representations and warranties made in clause 2 do not remain true and correct in all material respects;

 

	
6.4

	
If Huddersfield & District Textile Training Co Ltd shall reasonably determine that any expenditure instalment of the Grant paid is not Qualifying Expenditure or if at any time Huddersfield & District Textile Training Co Ltd has paid more than it is liable to pay under any provision of this Agreement the Contractor shall forthwith on demand in writing pay to Huddersfield & District Textile Training Co Ltd the amount stipulated by Huddersfield & District Textile Training Co Ltd as being overpaid.

 

	
6.5

	
Huddersfield & District Textile Training Co Ltd reserves the right to vary the Maximum Amount if the Contractor receives any public sector financial assistance for the Project (other than that specified in Schedule 2) or the acceptance of an offer thereof.

 

6.6          The Contractor acknowledges that:-

 

	
  

	
(a)

	
The Qualifying Expenditure allocated to a particular activity heading in Schedule 2 is available for that activity heading only;

 

  

13

  

 

	
  

	
(b)

	
The Grant allocated to a particular Financial Year by paragraph 10 of the Particulars is available for that Financial Year only; and

 

	
  

	
(c)

	
The allocation of items of Qualifying Expenditure in the summary set out in Schedule 2 against which the payment of the Grant shall be made shall not be altered without the prior written consent of Huddersfield & District Textile Training Co Ltd.

 

	
6.7

	
Huddersfield & District Textile Training Co Ltd has detailed in Schedule 3 a profile of planned monthly financial claims it expects to receive for each instalment period. The Contractor shall submit to Huddersfield & District Textile Training Co Ltd with each claim a revised claim profile where this differs from the initial forecast set out in Schedule 3. For the avoidance of doubt Huddersfield & District Textile Training Co Ltd shall not be obliged to accept or approve any revised claim profile nor does any acceptance or approval of any revised claim profile amend or vary any of the other provisions in this clause 6.

 

	
6.8

	
The Contractor acknowledges that the summary of payments set out in Schedule 2 includes the amount (if any) set aside for administration of the Project.

 

	
6.9

	
For the avoidance of doubt the Contractor shall not claim or use any part of the Grant in respect of the following:-

 

(a)           Any activity other than the Project;

 

	
  

	
(b)

	
To support or assist activities which are political or of an exclusive religious nature or which may bring Huddersfield & District Textile Training Co Ltd into disrepute;

 

	
  

	
(c)

	
For work services or activities for which a person has a statutory duty to provide (except with the prior written consent of Huddersfield & District Textile Training Co Ltd);

 

	
  

	
(d)

	
Any amounts payable as a result of the default of the Contractor;

 

(e)           Any loss or damage resulting from an insured risk;

 

(f)           Any additional costs incurred due to increasing expenses of the Project;

 

(g)           Redundancy costs of staff; or

 

(h)           Any Project Expenditure other than Qualifying Expenditure.

 

7.            FUNDING SOURCES

 

	
7.1

	
The Contractor warrants to Huddersfield & District Textile Training Co Ltd that the funding sources for the Project as set out in Schedule 2 are true and correct in all material respects.

 

	
7.2

	
The Contractor shall notify Huddersfield & District Textile Training Co Ltd’s Representative in writing of the amounts of any other funding (additional to those described in Schedule 2) including any other public sector funding (if any) and/or guarantees secured or offered for the Project as soon as it is approved.

 

	
7.3

	
The Contractor shall not use the Project as a source of match funding to obtain EU grants or monies without the prior written consent of Huddersfield & District Textile Training Co Ltd.

 

  

14

  

 

8.             PROJECT MANAGEMENT

 

	
8.1

	
The Contractor shall manage the Project in accordance with the terms of this Agreement and shall nominate the Contractor’s Manager to manage the Project who is suitably qualified and experienced. The Contractor’s Manager shall be Huddersfield & District Textile Training Co Ltd’s main contact point for the Project.  The Contractor shall be responsible to Huddersfield & District Textile Training Co Ltd for ensuring that the Contractor’s Manager delivers the Project and provides all monitoring information required by Huddersfield & District Textile Training Co Ltd.

 

	
8.2

	
The Contractor shall notify Huddersfield & District Textile Training Co Ltd in writing of any changes to the Contractor’s Manager.

 

	
8.3

	
The Contractor shall immediately notify Huddersfield & District Textile Training Co Ltd in writing of any circumstances that may result in a possible breach of any of the terms of this Agreement including, without limitation, any concerns relating to the financial stability of the Contractor, the management of the Project and probity issues.

 

	
8.4

	
The Contractor shall promptly comply with all reasonable requests or directions of Huddersfield & District Textile Training Co Ltd’s Representative in respect of the Project.

 

9.            ASSIGNMENT AND SUB-CONTRACTING

 

	
9.1

	
The Contractor’s rights to the Grant pursuant to this Agreement are exclusive to the Contractor and are not assignable or transferable.

 

	
9.2

	
The Contractor shall not sub-contract any of its obligations under this Agreement without the prior written consent of Huddersfield & District Textile Training Co Ltd and such consent (if given) may be made subject to any conditions which Huddersfield & District Textile Training Co Ltd considers necessary and Huddersfield & District Textile Training Co Ltd may withdraw its consent to any sub-contractor where it has reasonable grounds to no longer approve of the sub-contractor or the sub-contracting arrangement and such grounds will be notified in writing to the Contractor.

 

	
9.3

	
Where Huddersfield & District Textile Training Co Ltd has on or prior to the date of this Agreement given its consent to the Contractor using any sub-contractor for any works the details of such sub-contractor and the extent of their involvement will be set out in paragraph 9 of Schedule 1 of this Agreement but Huddersfield & District Textile Training Co Ltd may withdraw its consent to any such sub-contractor at any time where it has reasonable grounds to no longer approve of the sub-contractor or the sub-contracting arrangement.

 

	
9.4

	
Any use by the Contractor of any sub-contractor approved by Huddersfield & District Textile Training Co Ltd shall not absolve or release the Contractor from its liabilities and obligations under this Agreement to comply with all the obligations contained herein.

 

  

15

  

 

10.           PROJECT RECORDS AND REPORTING

 

10.1         Project Records

 

The Contractor shall:-

 

	
  

	
(a)

	
Keep a full, proper and auditable record of the progress of the Project and the Project Expenditure which shall be available at any time during the Term for inspection by Huddersfield & District Textile Training Co Ltd;

 

	
  

	
(b)

	
Keep full and accurate records of all Outputs, outcomes and other results achieved from the Project.

 

	
  

	
(c)

	
Collect and report on the Beneficiary Data as described in Schedule 1.  The reports shall be included in the progress reports referred to in clause 10.2 below or in such other format and at such other time as shall be required by Huddersfield & District Textile Training Co Ltd.  The Contractor must ensure that all Beneficiary Data is auditable (i.e. that they are able to trace the beneficiary outputs back to the source data).

 

10.2         Reporting

 

The Contractor shall:-

 

	
  

	
(a)

	
Use the Approved Claim Form provided by Huddersfield & District Textile Training Co Ltd for claiming instalments of the Grant under clause 6 which shall contain a monthly progress report which is completed by the Contractor describing the progress achieved on the Project. Such report to be in a format from time to time prescribed by Huddersfield & District Textile Training Co Ltd and containing such information as may be reasonably required by Huddersfield & District Textile Training Co Ltd.

 

	
  

	
(b)

	
Provide a more detailed written project report to Huddersfield & District Textile Training Co Ltd not less than once in every quarter during each Financial Year during the Term detailing progress on the Project by the dates specified in paragraph 10 of Schedule 1. Each such report shall be in a format from time to time prescribed by Huddersfield & District Textile Training Co Ltd but shall include:

 

(i)           Progress against the Project Operational Plan set out in Schedule 1;

 

	
  

	
(ii)

	
Confirmation of the Project Expenditure and Qualifying Expenditure which has previously been incurred and which is likely to be incurred during the forthcoming Financial Year;

 

	
  

	
(iii)

	
Confirmation of the Outputs actually achieved during the previous quarter and confirmation of the cumulative Outputs achieved since the Date of this Agreement;

 

	
  

	
(iv)

	
An estimate of the Outputs which are likely to be achieved in the following Financial Year;

 

	
  

	
(v)

	
The Contractor’s estimate of any shortfall or expected shortfall in the delivery of any Outputs and the Contractor’s proposal to rectify the position;

 

	
  

	
(vi)

	
The Contractor’s estimate of any shortfall or expected shortfall in the Project Expenditure and/or Qualifying Expenditure and/or any cost overruns or expected cost overruns in the Project; and the Contractor’s proposal to rectify the position;

 

  

16

  

 

	
  

	
(vii)

	
Such environmental and sustainability monitoring information which Huddersfield & District Textile Training Co Ltd shall require in relation to the Project; and

 

	
  

	
(viii)

	
The Beneficiary Data collected which is referred to in clause 10.1(c).

 

10.3         Financial Records

 

(a)           The Contractor shall retain documentary evidence of:-

 

	
  

	
(i)

	
All capital and revenue purchases to support the amounts claimed from Huddersfield & District Textile Training Co Ltd. This shall include an invoice register of suppliers’ and sub-contractors’ invoices and all other documents relating to the purchase of all capital and revenue items funded by Huddersfield & District Textile Training Co Ltd.

 

	
  

	
(ii)

	
Output generation to support the project progress reports, including those reports submitted on the Approved Claim Form for claiming instalments of Grant. Huddersfield & District Textile Training Co Ltd reserves the right to access and use any such output information held on databases, spreadsheets etc. by the Contractor for its own purposes.

 

	
  

	
(b)

	
The Contractor shall allow access to its business premises on 2 days notice during 9.00 a.m. – 5.00 p.m. to Huddersfield & District Textile Training Co Ltd’s internal auditors or its other duly authorised staff or agents, Government Office, European Commission or the National Audit Office to inspect such documents as Huddersfield & District Textile Training Co Ltd considers necessary in connection with this Agreement. Huddersfield & District Textile Training Co Ltd shall be entitled to interview employees of the Contractor in order to obtain oral and/or written explanations of documents and the Contractor shall provide access to the relevant employees at such times as may be reasonably required to enable Huddersfield & District Textile Training Co Ltd to do so. Huddersfield & District Textile Training Co Ltd reserves the right to have such staff or agents carry out examinations into the probity, economy, efficiency and effectiveness with which the Contractor has used Huddersfield & District Textile Training Co Ltd’s resources in the performance of this Agreement.

 

11.           COMPLIANCE WITH LEGISLATION

 

In carrying out this Agreement the Contractor and sub-contractors shall comply in all respects with all relevant legislation, and in particular;

 

	
11.1

	
The Contractor shall not unlawfully discriminate within the meaning and scope of the provisions of the Race Relations Amendment Act 2000, the Sex Discrimination Act 1975, the Human Rights Act 2000, the Disability Discrimination Act 1975 or relating to discrimination in employment on the grounds of age, sexual orientation or religious beliefs.

 

	
11.2

	
Unless there is justifiable exception, the Project shall comply with all regulations that pertain to the equal opportunities agenda.

 

	
11.3

	
The Contractor shall comply fully with the Data Protection Act 1998 and any subsequent amendments. Personal data arising as a result of the Project shall not be processed and/or transmitted to a third party without the written permission of Huddersfield & District Textile Training Co Ltd.

 

  

17

  

 

	
11.4

	
The Contractor shall comply with all relevant requirements contained in or having effect under the legislation relating to health, safety and welfare at work.

 

	
11.5

	
The Contractor will inform Huddersfield & District Textile Training Co Ltd of any environmental incident or infringement during the project lifetime at the earliest opportunity and will take all reasonable steps to minimise (and if required, remedy) the adverse environmental impacts of such an occurrence.

 

12.           CAPITAL ASSETS

 

	
12.1

	
During its useful life, no Capital Asset should be sold, charged or otherwise disposed of by the Contractor without prior written consent of Huddersfield & District Textile Training Co Ltd.  At Huddersfield & District Textile Training Co Ltd’s sole option such consent may be made conditional upon the refund to Huddersfield & District Textile Training Co Ltd of the whole or (as the case may be) proportionate part of the proceeds of sale of the asset less any necessary sale expenses.

 

	
12.2

	
All Capital Assets must be kept insured against loss or damage for their full replacement value, and with a reputable insurer.  The Contractor shall, upon Huddersfield & District Textile Training Co Ltd’s request, provide a copy of such insurance policy, together with the receipt for the payment of the last premium paid in respect of the policy.  For the avoidance of doubt, in the event of any loss of, or damage to any Capital Asset, Huddersfield & District Textile Training Co Ltd will not be obliged to pay for its replacement or repair.

 

	
12.3

	
The Contractor should keep a register of all Capital Assets and their location, which should be accessible at all times.  Where the Grant is used for the purchase of furniture and ICT equipment all items must be included on the asset register if their individual value is more than £500.

 

13.           INTELLECTUAL PROPERTY

 

	
13.1

	
All Project Intellectual Property shall be proprietary to and owned by Huddersfield & District Textile Training Co immediately on its coming into existence.

 

	
13.2

	
The Huddersfield & District Textile Training Co Ltd will grant to Yorkshire Forward an irrevocable, world-wide, royalty-free transferable non-exclusive right and licence (with freedom to sublicense) of the Project Intellectual Property and to use and exploit all the Project Intellectual Property.

 

	
13.3

	
Notwithstanding termination of this Agreement for any reason whatsoever the Contractor shall at its expense do and execute, and shall procure that its employees and any sub-contractor engaged in the performance of the Project do and execute any further thing or document as may be required by Huddersfield & District Textile Training Co Ltd to give effect this clause.

 

13.4        The Contractor warrants:

 

	
  

	
(a)

	
that the Project Intellectual Property will not infringe the rights of any third party and no third party has threatened or so far as it is aware is currently threatening proceedings in respect of such infringement; and

 

  

18

  

 

	
  

	
(b)

	
that it is able to conduct the Project without breaching any obligations it may owe to any third party now or, as far as it is at present aware, in the future and hereby undertakes to carry out the Project without breaching any such obligations and further undertakes not to assume any obligations to any third party which would be inconsistent with such undertaking.  Without limitation, it warrants that it shall acquire all rights in any Project Intellectual Property obtained or developed by any third party in the course of or in connection with the Project or shall be duly allowed to licence the same as contemplated under this Agreement.

 

	
13.5

	
The Contractor shall indemnify and hold Huddersfield & District Textile Training Co Ltd harmless (and keep indemnified and hold harmless notwithstanding termination of this Agreement) against any and all loss or damage (including without limitation any economic loss or other loss of profits, business or goodwill or any consequential loss) suffered by Huddersfield & District Textile Training Co Ltd as a result of the Contractor’s breach of any or all the warranties in Clause 13.

 

14.           GENERAL INDEMNITY AND INSURANCE

 

	
14.1

	
The Contractor shall indemnify Huddersfield & District Textile Training Co Ltd in full from and against:-

 

	
  

	
(a)

	
all costs, claims, damages, liabilities, expenses and proceedings arising from or in connection with any breach or non performance of the terms of this Agreement or otherwise arising through the act or default of the Contractor; and

 

	
  

	
(b)

	
without prejudice to the generality of the foregoing, all costs, claims, damages, liabilities, expenses and proceedings arising under statute or at common law in respect of any personal injury to or death of any person whomsoever or loss or damage to property whether belonging to Huddersfield & District Textile Training Co Ltd or otherwise arising out of or in the course of or caused by the performance of the Project.

 

	
14.2

	
The Contractor shall ensure that it has and maintains at all times:-

 

	
  

	
(a)

	
adequate insurance cover with a insurer of good repute to cover all claims and liabilities under this Agreement or any other claims or demands which may be brought or made by it by any person suffering any injury, damage or loss in connection with the Project; and

 

	
  

	
(b)

	
employer’s liability insurance cover with a reputable insurer for a sum of not less than £5,000,000.

 

	
14.3

	
The Contractor shall:-

 

	
  

	
(a)

	
upon request by Huddersfield & District Textile Training Co Ltd at any time produce to Huddersfield & District Textile Training Co Ltd a copy or copies of the policies of insurance referred to in this clause together with the receipt for or evidence of the payment of the last premium in respect of each such policy or other documentary evidence to the satisfaction of Huddersfield & District Textile Training Co Ltd that the policy or policies are properly maintained; and

 

	
  

	
(b)

	
comply with all legislation including (without limitation) the Employer’s Liability (Compulsory Insurance) Regulations 1998 with regard to the disclosure and/or display of the insurance policies.

 

  

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15.           RECOVERY OF GRANT

 

	
15.1

	
Huddersfield & District Textile Training Co Ltd may reduce suspend or withhold the Grant or require all or part of the Grant to be repaid (or require Capital Assets to be transferred where the purchase was wholly funded by Huddersfield & District Textile Training Co Ltd) if:

 

(a)          it judges the performance of the Project to be unsatisfactory;

 

	
  

	
(b)

	
the Contractor fails to comply with any term or condition of this Agreement in any material respect;

 

(c)           the Grant is terminated in accordance with clause 16 (Termination);

 

	
  

	
(d)

	
there is a substantial change to the Project which Huddersfield & District Textile Training Co Ltd has not approved;

 

	
  

	
(e)

	
any attempt is made to transfer or assign any rights interests or obligations created under this Agreement without the prior written consent of Huddersfield & District Textile Training Co Ltd;

 

	
  

	
(f)

	
any information provided in the application for funding or in a claim for payment or in subsequent or supporting correspondence is found to be incorrect or incomplete to an extent which Huddersfield & District Textile Training Co Ltd considers to be material;

 

	
  

	
(g)

	
a charge is taken on a Capital Asset without the prior consent of Huddersfield & District Textile Training Co Ltd;

 

(h)          there is an unauthorised attempt to dispose of a Capital Asset;

 

	
  

	
(i)

	
there is a failure to keep and maintain the records required by Huddersfield & District Textile Training Co Ltd;

 

	
  

	
(j)

	
there is a failure by the Contractor to provide reports on time as required by this Agreement;

 

(k)          the Grant has not been used for the purpose for which it was given;

 

	
  

	
(l)

	
there is financial irregularity within the Contractor which is not rectified within the timescale specified by Huddersfield & District Textile Training Co Ltd;

 

(m)          there has been an overpayment of Grant;

 

	
  

	
(n)

	
there is a change in the Contractor’s activities which are inconsistent with the Outputs;

 

	
  

	
(o)

	
Huddersfield & District Textile Training Co Ltd has to repay funding from which the Grant was allocated;

 

	
  

	
(p)

	
Huddersfield & District Textile Training Co Ltd is required to do so as a result of a decision by the EU or as a result of any obligation arising under EU Law.

 

	
  

	
(q)

	
Huddersfield & District Textile Training Co Ltd believes that all necessary approvals to lawfully deliver the Project have not been obtained or all relevant legislation has not been complied with;

 

	
  

	
(r)

	
Huddersfield & District Textile Training Co Ltd has consented to a change in the Project which in its opinion reduces the amount of Grant needed; and

 

  

20

  

 

	
  

	
(s)

	
any other circumstances or events that in the reasonable opinion of Huddersfield & District Textile Training Co Ltd are likely to adversely affect the Contractor’s ability to deliver the Project in accordance with the terms of this Agreement or result in a risk that the Project as approved will not be completed.

 

	
15.2

	
The provisions of clause 15.1 are without prejudice to Huddersfield & District Textile Training Co Ltd’s rights in clause 16.

 

	
15.3

	
The Contractor agrees that on receipt of notice requiring repayment of all or any part of the Grant that it will make such repayment within 20 Working Days of receipt of such notice.

 

16.           TERMINATION

 

	
16.1

	
Without prejudice to any other rights to which it may be entitled, either party may give notice in writing to the other terminating this Agreement with immediate effect if the other party commits a material breach of any of the terms of this Agreement and (if such a breach is remediable) fails to remedy that breach within 30 days of that party being notified of the breach.

 

	
16.2

	
Huddersfield & District Textile Training Co Ltd may give notice in writing to the Contractor terminating this Agreement with immediate effect if:

 

	
  

	
(a)

	
an order is made or a resolution is passed for the winding up of the Contractor or a provisional liquidator is appointed or if an order is made for the appointment of an administrator to manage the affairs, business and property of the Contractor or if a receiver is appointed of any of the Contractor’s assets or undertaking or if circumstances arise which entitle the Court or a creditor to appoint a receiver or manager or which entitle the Court to make a winding up order or if the Contractor makes or proposes any composition or voluntary arrangement with its creditors or if the Contractor takes or suffers any similar or analogous action in consequence of debt or in any jurisdiction other than England;

 

	
  

	
(b)

	
there is a change of Control of the Contractor;

 

	
  

	
(c)

	
the Contractor purports to assign its rights or obligations under this Agreement;

 

	
  

	
(d)

	
Huddersfield & District Textile Training Co Ltd invokes the provisions described in clause 15;

 

	
  

	
(e)

	
the Contractor fails to achieve the Outputs set out in Schedule 1;

 

	
  

	
(f)

	
the Contractor ceases to carry on business;

 

	
  

	
(g)

	
the Contractor is convicted (or being a company, any officers or representatives of the Contractor are convicted) of a criminal offence related to the business or professional conduct of the Contractor;

 

	
  

	
(h)

	
the Contractor commits (or being a company, any officers or representatives of the Contractor commit) an act of grave misconduct in the course of its business;

 

	
  

	
(i)

	
the Contractor fails (or being a company, any officers or representatives of the Contractor fail) to fulfil his/its obligations relating to the payment of Social Security contributions;

 

  

21

  

 

	
  

	
(j)

	
the Contractor fails (or being a company, any officers or representatives of the Contractor fail) to fulfil his/its obligations relating to payment of taxes; or

 

	
  

	
(k)

	
the Contractor fails (or being a company, any officers or representatives of the Contractor fail) to disclose any serious misrepresentation in supplying information required by Huddersfield & District Textile Training Co Ltd in or pursuant to this Agreement.

 

	
16.3

	
Termination of this Agreement however caused shall be without prejudice to any rights or liabilities accrued at the date of termination, but for the avoidance of doubt Huddersfield & District Textile Training Co Ltd shall not be obliged to make any further payments to the Contractor after such termination.

 

	
16.4

	
Nothing in this clause 16 shall affect the coming into, or continuance in force of any provision of this Agreement that is expressly or by implication intended to come into force or continue in force upon termination of this Agreement.

 

	
17.

	
HUDDERSFIELD & DISTRICT TEXTILE TRAINING CO LTD PUBLICITY REQUIREMENTS

	
  

	 

	
17.1

	
The Contractor shall comply with all the obligations and requirements set out in Schedule 4.

 

18.           TRANSFER OF RESPONSIBILITY ON EXPIRY OR TERMINATION

 

	
18.1

	
If upon or at any time within 6 months after the expiry or sooner determination of this Agreement Huddersfield & District Textile Training Co Ltd shall notify the Contractor that any nominee of Huddersfield & District Textile Training Co Ltd or any other person will be undertaking work which is a continuation of the Project or similar in nature to the Project then the Contractor shall, at no additional cost to Huddersfield & District Textile Training Co Ltd, promptly provide such information and assistance and comply with such timetable as Huddersfield & District Textile Training Co Ltd may reasonably require.  Huddersfield & District Textile Training Co Ltd shall be entitled to require the provision of such information and assistance both prior to and for a reasonable period after, the expiry or other determination of this Agreement.

 

	
18.2

	
Such assistance may include (without limitation) the delivery of documents and data in the possession or control of the Contractor that relate to this Agreement, the Project and its results including the documents and data, if any, referred to in the Schedules.

 

19.           SEVERABILITY

 

If any part of this Agreement becomes invalid, illegal or unenforceable the parties shall in such an event negotiate in good faith in order to agree the terms of a mutually satisfactory provision to be substituted for the invalid, illegal or unenforceable provision which as nearly as possible validly gives effect to their intentions as expressed in this Agreement.  Failure to agree on such a provision within six months of commencement of those negotiations shall result in automatic termination of this Agreement.  The obligations of the parties under any invalid, illegal or unenforceable provision of this Agreement shall be suspended during such a negotiation.

 

  

22

  

 

20.           AMENDMENTS

 

Save as expressly provided in this Agreement, no amendment or variation of this Agreement shall be effective unless in writing and signed by a duly authorised representative of each of the parties to it.  The Contractor shall comply with any formal procedures for amending or varying contracts that Huddersfield & District Textile Training Co Ltd may have in place from time to time.

 

21.           EXCESS PROFITS AND DEVELOPMENTS

 

	
21.1

	
The Contractor shall immediately disclose to Huddersfield & District Textile Training Co Ltd and in such detail as Huddersfield & District Textile Training Co Ltd may reasonably require all Developments that it may create or put into use during the Term and the requirements of clauses 21.1 to 21.5 inclusive shall apply to all Developments, unless otherwise agreed in writing by Huddersfield & District Textile Training Co Ltd.

 

	
21.2

	
Developments shall remain the exclusive property of the Huddersfield & District Textile Training Co Ltd but Yorkshire Forward shall have a non-exclusive perpetual irrevocable world-wide royalty-free licence to use and exploit all Developments with the right to grant sub-licences.

 

	
21.3

	
The Contractor shall pay to Huddersfield & District Textile Training Co Ltd a share of any capital or income receipts received by the Contractor from the Project or arising out of the Developments at any time during the Term such share to be determined by Huddersfield & District Textile Training Co Ltd and which may be the whole of the receipts up to the amount of the Grant unless Huddersfield & District Textile Training Co Ltd is satisfied that any such receipts are to be used by the Contractor solely for the benefit of the Project.

 

	
21.4

	
The Contractor shall immediately notify Huddersfield & District Textile Training Co Ltd of any capital and/or income receipts (including rental income) received at any time during the Term.

 

	
21.5

	
Pending an assessment of the amount to be so paid under clause 21.3 the Contractor shall create a separate account for the full value of such capital and/or income receipts and shall hold the same on trust for Huddersfield & District Textile Training Co Ltd.

 

22.           WAIVER

 

No delay or omission by either party in exercising any right, power, privilege or remedy under this shall operate to impair such right, power, privilege or remedy or be construed as a waiver thereof.  Any single or partial exercise of any such right, power, privilege or remedy shall not bar the exercise or enforcement of it at any time or times thereafter.

 

23.           NOTICES

 

	
23.1

	
Any notice or communication required or given by either party to the other party in connection with this Agreement shall be in writing and delivered by hand or by first class or registered post to the relevant address or addresses prescribed in this Clause 23 of the party to whom the notice is to be given (or such other address as the recipient may have notified to the sending party in writing) and any notice so sent shall be deemed, if delivered by hand, to have been served at the time of delivery and if posted by first class or registered post to have been served on the second business day following the date of posting.

 

  

23

  

 

	
23.2

	
All notices or communications to Huddersfield & District Textile Training Co Ltd shall (unless Huddersfield & District Textile Training Co Ltd shall give notice to the Contractor otherwise) be delivered to Huddersfield & District Textile Training Co Ltd at the address stated in paragraph 15 of the Particulars and marked for the attention of Huddersfield & District Textile Training Co Ltd’s Representative.

 

	
23.3

	
All notices or communications to the Contractor shall (unless the Contractor shall give notice to Huddersfield & District Textile Training Co Ltd otherwise) be delivered to the Contractor at the address stated in paragraph 3 of the Particulars and marked for the attention of the Contractor’s Manager.

 

24.           REPUTATION OF HUDDERSFIELD & DISTRICT TEXTILE TRAINING CO LTD

 

	
24.1

	
The Contractor shall not, and shall use its best endeavours to procure that its employees, agents and/or sub-contractors shall not, knowingly do or omit to do, anything in relation to this Agreement or in the course of their other activities, that may bring the standing of Huddersfield & District Textile Training Co Ltd into disrepute or attract adverse publicity for Huddersfield & District Textile Training Co Ltd.

 

	
24.2

	
The Contractor shall at all times perform the Project with due regard to the need for those in a public service environment to observe the highest standards of efficiency, economy, probity, courtesy, consideration and hygiene.

 

25.           NON SOLICITATION AND CONFLICT OF INTEREST

 

	
  

	
The Contractor should not solicit knowledge or services from any Huddersfield & District Textile Training Co Ltd employee in any way directly or indirectly for favour that may compromise the relationship of the Contractor and that of Huddersfield & District Textile Training Co Ltd or any of its employees that may present a conflict of interest.

 

26.           NO PARTNERSHIP OR AGENCY

 

	
  

	
This Agreement does not create a relationship of partnership or agency between the parties and the Contractor must not represent itself to others as an agent of Huddersfield & District Textile Training Co Ltd.

 

27.           GOVERNING LAW AND JURISDICTION

 

This Agreement shall be governed by and construed in accordance with English law and each party hereby submits to the exclusive jurisdiction of the English courts.

 

28.           ENTIRE AGREEMENT

 

This agreement constitutes the entire understanding between the parties with respect to the subject matter of this agreement and supersedes all prior agreements, negotiations and discussions between the parties relating to it.

 

29.           INTEREST ON LATE PAYMENTS

 

If the Contractor fails to pay to Huddersfield & District Textile Training Co Ltd any sums due under this Agreement within 10 Working Days of demand interest shall accrue at the Base Interest Rate on the amount due to be paid from the due date until payment is made.

 

  

24

  

30.           VAT

 

The Grant does not represent consideration for a taxable supply to the Contractor and is therefore not subject to VAT.  In the event that HM Revenue and Customs  rule that VAT is payable, then the amount of the Grant shall be deemed to be inclusive of VAT. The Contractor acknowledges that Huddersfield & District Textile Training Co Ltd shall not be obliged to make any further payment in addition to the Grant in respect of any VAT which may be payable on Grant funded activities.

 

31.           FREEDOM OF INFORMATION ACT 2000

 

	
31.1

	
Where Information that might be disclosable in response to a Request for Information  addressed to Huddersfield & District Textile Training Co Ltd relates to the Contractor, Huddersfield & District Textile Training Co Ltd shall use its reasonable endeavours to consult with the Contractor, prior to any disclosure and, at the Contractor’s request, consider the application of any relevant exemptions under the FOIA or the Environmental Information Regulations (as appropriate).

	
31.2

	
If Huddersfield & District Textile Training Co Ltd shall at any time notify the Contractor that it has received a Request for Information addressed to Huddersfield & District Textile Training Co Ltd in respect of which Huddersfield & District Textile Training Co Ltd requires the Contractor’s assistance then:-

	
  

	
(a)

	
where the Request for Information relates to Information which is held on behalf of Huddersfield & District Textile Training Co Ltd by the Contractor or any of its sub-contractors, the Contractor shall at its own cost supply and procure that its sub-contractors supply to Huddersfield & District Textile Training Co Ltd such Information and documents requested by Huddersfield & District Textile Training Co Ltd in such form as reasonably prescribed by Huddersfield & District Textile Training Co Ltd; and

	
  

	
 (b)

	
the Contractor shall at its own cost provide and procure that its sub-contractors provide all reasonable assistance required by Huddersfield & District Textile Training Co Ltd; in order to allow Huddersfield & District Textile Training Co Ltd to comply with such Request for Information within the period or periods when it is obliged to respond to such Request for Information.

	
31.3

	
The Contractor shall ensure that all Information produced in the course of the Project in relation to the Project and/or this Agreement is retained for disclosure and shall permit Huddersfield & District Textile Training Co Ltd to inspect such records as required from time to time.

 

	
31.4

	
In the event that the Contractor shall at any time receive any Request for Information addressed to itself relating to the Project, this Agreement or any activities or business of Huddersfield & District Textile Training Co Ltd and which it reasonably considers it is required to respond to in accordance with its obligations under FOIA or Environmental Information Regulations or other statutory requirement, it will use its reasonable endeavours to consult with Huddersfield & District Textile Training Co Ltd, prior to any disclosure, and at the request of Huddersfield & District Textile Training Co Ltd consider the application of any relevant exemptions under the FOIA or the Environmental Information Regulations (as appropriate).

 

  

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31.5

	
If the Contractor shall at any time notify Huddersfield & District Textile Training Co Ltd that it has received a Request for Information addressed to the Contractor in respect of which the Contractor requires Huddersfield & District Textile Training Co Ltd’s assistance then:-

	
  

	
(a)

	
where the Request for Information relates to Information which is held on behalf of the Contractor by Huddersfield & District Textile Training Co Ltd or any of its sub-contractors, Huddersfield & District Textile Training Co Ltd shall [at its own cost] supply and procure that its sub-contractors supply to the Contractor such Information and documents requested by the Contractor in such form as reasonably prescribed by the Contractor; and

	
  

	
 (b)

	
Huddersfield & District Textile Training Co Ltd shall [at its own cost] provide and procure that its sub-contractors provide all reasonable assistance required by the Contractor;

in order to allow the Contractor to comply with such Request for Information within the period or periods when it is obliged to respond to such Request for Information.

 

	
31.6

	
In the event the Contractor shall at any time receive any Request for Information addressed to Huddersfield & District Textile Training Co Ltd, then:

	
  

	
(a)

	
the Contractor shall supply the Request for Information to Huddersfield & District Textile Training Co Ltd within 2 Working Days of receipt;

	
  

	
(b)

	
the Contractor shall not respond to such Request for Information.

	
31.6

	
Nothing in this Agreement shall prevent Huddersfield & District Textile Training Co Ltd from disclosing any Information whether relating to the Project or this Agreement or otherwise which Huddersfield & District Textile Training Co Ltd considers it is required to disclose in order to comply with FOIA and/or the Environmental Information Regulations and any other statutory requirements whether or not existing at the date of this Agreement and Huddersfield & District Textile Training Co Ltd reserves the right to make such disclosure without reference to the Contractor.

	
31.7

	
Nothing in this Agreement shall prevent the Contractor from disclosing any Information whether relating to the Project or this Agreement or otherwise which the Contractor considers it is required to disclose in order to comply with FOIA and/or the Environmental Information Regulations and any other statutory requirements whether or not existing at the date of this Agreement and the Contractor reserves the right to make such disclosure without reference to Huddersfield & District Textile Training Co Ltd.

32.           THIRD PARTY RIGHTS

	
  

	
Save as expressly provided in this Agreement, no term of this Agreement shall be enforceable under the Contracts (Rights of Third Parties) Act 1999 by a third party (being any person other than the parties and their permitted successors and assignees).

 

  

26

  

 

SCHEDULE 1

Project  Operational Plan

 

1. Background and Baseline Position

Demand for technical textiles is growing and the value of the EU market is estimated at €36bn (Source: Euratex ‘The Future is Textiles’ June 2006). The sector is increasingly important as a supplier to strategically important Yorkshire and the Humber industries – AEM, healthcare and environmental technologies – and end uses are very diverse. Applications range from transport and construction (where better performance characteristics of fibres and textile-based materials – strength-weight ratio, durability, flexibility, insulation, fire and heat resistance – enable them to replace traditional metals wood and plastic) to ‘smart or intelligent’ clothing (which can, for example, adapt insulation according to temperature or generate electricity to power medical or other electronic devices).

In many respects, companies in Yorkshire and the Humber region are well placed to take advantage of the opportunities offered by high growth/high values markets for technical textiles, building on the region’s capacity and skills in traditional textile industries, its continuing reputation for high quality fabrics in international markets and access to universities undertaking leading edge research. Indeed, many companies have already done so – The Yorkshire and Humber Technical Textiles Cluster Competitiveness Strategy 2004-2009 estimated that 102 were active in the technical textile supply chain in 2004 of which 56 were textile manufacturers – but the transition is not always easy and companies face significant problems.

Set against challenges to the industry is the size of the opportunity that technical textiles offer to conventional textile companies in Yorkshire and the benefits of gaining access to new markets for companies which are under threat in their traditional markets from competitors in low cost countries.

The overall aim of the Huddersfield & District Textile Training Co Ltd 901647 project is to create a textile innovation and technology transfer centre for ‘close to market’ research and development primarily in the field of technical textiles which will help companies identify and develop new capabilities to exploit opportunities in this growing world market.

 

2. Scope

The Textile Centre of Excellence (TCoE) will manage the initial development of 4 pilot projects as proof of principle technologies or applications.

Proof of principle is defined as the ‘demonstration of the commercial potential of a discovery or invention’.

This agreement refers to the project: “Developing and implementing the use of DNA across a range of processes and products for anti-counterfeiting purposes: Feasibility Study”

 

3. Assumptions

The pilot / feasibility projects will be project managed by the Textile Centre of Excellence.

The other funders will support the pilot / feasibility projects in line with the proposals in Section 6.

 

  

27

  

 

The pilot / feasibility projects will be successful.

There will be evidence that will help justify the need for full design and development programmes.

The pilot developments have the potential to provide technologies that will benefit many companies in the region but the costs are too high for any single company. Full development will not go ahead without the evidence required to justify full development funding.

 

4. Aims

To develop a successful pilot project as proof of principle technologies or applications which will help justify the need for full design and development programmes.

 

5. Objectives

To undertake a pilot project as proof of principle technologies or applications.

To provide evidence to justify the need for a full design and development programme.

To provide evidence that justifies funding for the full design and development of the project.

 

6. Deliverables, Activities, Resources and Milestones

6.1           Feasibility Project: “Developing and implementing the use of DNA across a range of processes and products for anti-counterfeiting purposes”.

Project Summary: Developing and implementing the use of DNA across a range of processes and products for anti-counterfeiting purposes. The recent communication from the European Commission ‘Effective Enforcement on the Ground Against Counterfeiting and Piracy’ has described the “alarming” levels of counterfeiting in Europe and the “damaging effects to job creation... and the health and safety of consumers”. This proposal is to develop ’proof of principle’ for the utilisation of modified plant DNA enabling the authentification of textiles produced in the region at all points of the supply chain through to the end user.  This application would deliver immediate and significant competitive advantage to the region’s high quality textile manufacturers. The outcome of this project will also be the identification of potential applications in other industries that will provide unique and guaranteed protection against counterfeiting. The outcome will be used to support future proposals for further development of applications across a wide range of sectors and products produced in the region.

Research Partner: Applied DNA Sciences, Stony Brook University, New York (Jim Hayward).

Industry Partner(s): National Wool Textile Export Corporation (Peter Ackroyd), WT Johnson & Sons Ltd (Paul Johnson), 4 other textile manufacturers.

Timescale: August to December 2008.

 

  

28

  

 

Project Stages:

	  	
Activity

	
Timeframe

	
1

	
Brief agreed with ADNAS.

	
August 08

	
2

	
Supply chain mapped to identify potential points of testing and market advantages of product protection.

	
August 08

	
3

	
Partner ‘process charts’ completed.

	
August 08

	
4

	
Applications for pilot stages agreed.

	
August 08

	
5

	
Manufacturing logistics, timeframe, equipment requirements, financial requirements and terms of business agreed.

	
August 08

	
6

	
DNA development timetable and methodology agreed.

	
August 08

	
7

	
Testing methodologies and implementation in place.

	
September 08

	
8

	
Testing pilots in the region.

	
September 08

	
9

	
First production run (thread methodology).

	
October 08

	
10

	
Second production run (finishing methodology).

	
October 08

	
11

	
Testing in place with supply chain partners.

	
October 08

	
12

	
Testing programme and evaluation of results

	
November 08

	
13

	
Proposals for roll-out prepared (Steering Group).

	
December 08

Costings

 

	Management (ADNAS) 	£10,000
	Laboratory 	£10,000
	Materials Costs (primers & other solvents) 	£12,500
	Testing Costs in Yorkshire & Humber

(staffing, materials, equipment)	£10,000
	Travel & Accommodation (NY to Leeds –

Project Manager & Technician)	£7,500 
	 	 
	Funding	£50,000

 

Change Management

Any significant changes to this contract which involve more than a 10% variance in terms of outputs and / or expenditure by quarter must be agreed in writing with Huddersfield & District Textile Training Co Ltd.

 

	
7.

	
Progress Reporting

 

Progress Reports

Monthly, to be received at Huddersfield & District Textile Training Co Ltd no later than the 5th of the following month

 

Grant Claim

The Contractor will submit a separate monthly grant claim

 

  

29

  

SCHEDULE 2

Summary Of Qualifying Expenditure, Total Project Expenditure And Funding Sources

	
EXPENDITURE ITEM

	
Applied DNA Sciences  QUALIFYING EXPENDITURE

(£000s)

	  	
OTHER FUNDING

SOURCES EXPENDITURE

(£000s)

	  	
2008/09

	
2009/10

	
2010/11

	
2011/121

	
2012/131

	
Total

	  	
European

	
Contractor’s

Own Funds

	
Other

	
Total

	
1a) Revenue Costs

	  	  	  	  	  	  	  	  	  	  	  
	
 Project 08/02

	
50,000

	  	  	  	  	
50,000

	  	  	  	  	  
	
Revenue Costs Sub-Total

	
50,000

	  	  	  	  	
50,000

	  	  	  	  	  
	  	  	  	  	  	  	  	  	  	  	  	  
	
1b) Capital Costs

	  	  	  	  	  	  	  	  	  	  	  
	  	  	  	  	  	  	  	  	  	  	  	  
	
Capital Costs Sub-Total

	
0

	  	  	  	  	
0

	  	  	  	  	  
	  	  	  	  	  	  	  	  	  	  	  	  
	
TOTAL EXPENDITURE

	
50,000

	  	  	  	  	
50,000

	  	  	  	  	  
	  	  	  	  	  	  	  	  	  	  	  	  

 

  

30

  

SCHEDULE 3

Profile Of Planned Monthly Financial Claims To Be Made Against The Agreement

 

	
FINANCIAL YEAR

	
£ CAPITAL

	
£ REVENUE

	
£ TOTAL

	
2008/09

	  	  	  
	
April

	  	  	  
	
May

	  	  	  
	
June

	  	  	  
	
July

	  	  	  
	
August

	  	  	  
	
September

	  	
15,000

	
15,000

	
October

	  	
15,000

	
15,000

	
November

	  	
7,000

	
7,000

	
December

	  	
7,000

	
7,000

	
January

	  	
6,000

	
6,000

	
February

	  	  	  
	
March

	  	  	  
	
TOTAL TO BE CLAIMED

(including non-recoverable VAT)

	  	
50,000

	
50,000

 

  

31

  

AS WITNESS the hands of the duly authorised representatives of the parties hereto the day and year first above written.

 

SIGNED BY   /s/ Bill Macbeth

Duly authorised for and on behalf of:

HUDDERSFIELD & DISTRICT TEXTILE TRAINING CO LTD

(YORKSHIRE & HUMBER

REGIONAL DEVELOPMENT AGENCY)

 

	
DATE: 

	
1 September 2008

	
Name:  

	
Bill Macbeth

	  	  	  	  
	  	  	
Position:

	
Managing Director

	  	  	  	  
	  	  	
Address:

	
Huddersfield & District Textile

	
Training Co Ltd

	  	  
	  	  	  	
Victoria House

	  	  	  	
2 Victoria Place

	  	  	  	
Leeds

	  	  	  	
LS11 5AE

 

SIGNED BY  /s/ James A. Hayward

Duly authorised for and on behalf of:

Applied DNA Sciences   

 

	
DATE: 27 August 2008

	
Name: James A. Hayward

	  	  
	  	
Position: Chief Executive Officer

	  	  
	  	
Address: 25 Health Sciences Drive, Suite 213

	  	
 Stony Brook, NY 11790

	  	
 USA

 

32ex10-38.htm

Exhibit 10.38

 

EMPLOYMENT AGREEMENT

 

This EMPLOYMENT AGREEMENT (the “Agreement”) is entered into this 24th day of January, 2011 (the “Effective Date”), by and between Benihana Inc., a Delaware corporation with its principal corporate office located at 8685 Northwest 53rd Terrace, Miami, Florida  33166 (the “Company”), and Cristina L. Mendoza (the “Executive”).

 

RECITALS

 

WHEREAS, the Company believes that the Executive’s services are integral to the success of the Company.  The Company desires to formalize the employment of the Executive on terms that will reinforce and encourage the Executive’s attention and dedication to the Company.

 

WHEREAS, the Company desires to employ the Executive as of the Effective Date, on the terms and conditions set forth in this Agreement, and the Executive desires to be so employed.

 

NOW, THEREFORE, in consideration of the premises and of the mutual promises, representations and covenants herein contained, the Company and the Executive hereby agree as follows:

 

AGREEMENT

 

1.            Scope of Employment.  The Company agrees to employ the Executive, and the Executive agrees to be employed by the Company, as General Counsel of the Company.  The Executive shall have the responsibilities and authority of such position as set forth in the Company’s by-laws and such other responsibilities commensurate with the Executive’s title and position as may be reasonably determined and assigned to the Executive by the Board of Directors of the Company (the “Board”).  The Executive shall devote her full business time, attention and energies to Company affairs.

 

2.            Term.  The Executive’s employment under this Agreement shall commence on the Effective Date and shall continue until terminated by either party as provided in this Agreement.

 

3.            Compensation.

 

(a)           Base Salary.  The Company agrees to pay the Executive, and the Executive agrees to accept, in payment for services to be rendered by the Executive hereunder, a base salary of $260,000.00 per annum (the “Base Salary”).  The Base Salary shall be paid in approximately equal installments, less such sums as may be required to be deducted or withheld under the provisions of federal, state or local law, in accordance with the Company’s customary payroll practices.  The Board will review the Executive’s performance and Base Salary annually, with the understanding that said review may result in an additional increase in Base Salary but in no circumstances shall it result in a decrease in Base Salary.  For all purposes under this Agreement, the term “Base Salary” shall refer to the Executive’s base salary under this Section 3(a).

 

  

1

  

 

(b)           Annual Bonus.  In addition to the Base Salary, the Executive also shall be eligible to receive an annual cash bonus (the “Bonus”) of up to 50% of her Base Salary, the amount and payment of which shall be based on the Company’s attainment of financial and other targets established at or near the beginning of each annual bonus period in good faith by the Company in writing after consultation with the Executive.  Any such bonus will be paid to the Executive in a lump sum, reduced by appropriate withholding tax and other deductions required by applicable law, after the Company determines whether and to what extent the targets have been attained and, in any event, no later than the 15th day of the third month after the end of the Company’s fiscal year to which the bonus relates.

 

(c)           Equity Compensation.  The Company will issue to the Executive a Restricted Stock Grant under the Company’s 2007 Equity Incentive Plan (the “Plan”) with respect to a total of 75,000 shares of the Company’s Common Stock, subject to the terms and conditions of the Plan and Restricted Stock Agreement in the form attached hereto as EXHIBIT A (“Restricted Stock Agreement”), reflecting the grant of Restricted Stock under the Plan.

 

(d)           Jefferies-Advised Sale of Company Incentive Compensation.  If the Executive remains a full time employee of the Company from the date hereof until the occurrence of a Jefferies-Advised Sale of the Company, as defined below, or if a Jefferies-Advised Sale of the Company occurs within six (6) months of the termination of the Executive’s employment either by the Company without Cause or by the Executive for Good Reason, the Executive shall be entitled to a lump sum payment immediately following the Jefferies-Advised Sale of the Company, and in any event within five (5) days after such Sale, in an amount determined pursuant to the following table:

 

	
Share price of Common Stock in Jefferies-

Advised Sale of the Company

	
Percentage of Base Salary Due to the 

Executive

	
$15 or more

	
150%

	
$13 or more, but less than $15

	
100%

	
$10 or more, but less than $13

	
75%

	
Less than $10

	
25%

 

(e)           Jefferies-Advised Sale.  For purposes of this Agreement, a “Jefferies-Advised Sale of the Company” shall be as defined for a “Jefferies-Advised Sale” in the Restricted Stock Agreement, which definition is incorporated by reference in this Agreement.

 

  

2

  

 

4.             Reimbursement of Expenses, Paid Time Off, Fringe Benefits.

 

(a)           Expenses.  The Company shall pay, or promptly reimburse the Executive for, all reasonable expenses incurred by the Executive in performing her duties for the Company during the Term of this Agreement upon the presentation of reasonably itemized statements of such expenses in accordance with the Company’s policies and procedures now in effect or as such policies and procedures may be modified from time to time, but with such reimbursement paid in all events not later than the last day of the calendar year following the calendar year in which the expense was incurred.

 

(b)           Paid Time Off.  The Executive shall be entitled to the number of weeks of paid time off per year provided to the Company’s senior executive officers in accordance with Company’s vacation or other paid time off policies.

 

(c)           Welfare, 401(k) and Similar Benefit Plans.  During the Term of this Agreement, the Executive shall be entitled to participate in and be covered under all the welfare benefit plans or programs maintained by the Company from time to time, including, without limitation, all medical, hospitalization, dental, disability, accidental death and dismemberment and travel accident insurance plans and programs.  In addition, during the Term of this Agreement, the Executive shall be eligible to participate in and be covered under all 401(k), retirement, savings and other employee benefit and perquisite plans and programs maintained from time to time by the Company.

 

5.            Termination.  This Agreement, and the Executive’s employment hereunder, may be terminated under the following circumstances:

 

(a)            Death or Disability.  This Agreement, and the Executive’s employment hereunder, shall terminate upon the Executive’s death or disability (which shall be deemed to have occurred if the Executive is physically or mentally unable to perform her duties hereunder for more than 30 days in any three (3) month period).

 

(b)            By the Executive.  The Executive shall have the right to terminate this Agreement, and the Executive’s employment hereunder, for any reason or for no reason, including, without limitation, for Good Reason (as hereinafter defined).  For purposes hereof, the term “Good Reason” shall mean any one or more of the following events, unless the Executive specifically agrees in writing that such event shall not be Good Reason:

 

(i)           a material reduction of the Executive’s Base Salary;

 

(ii)          a material diminution in the Executive’s authority, responsibilities, or duties when compared to those applicable to the Executive in her position as described in Section 1;

 

    (iii)          material acts or conduct on the part of the Company or its officers and representatives that are designed to force the resignation of the Executive or prevent the Executive from performing her duties and responsibilities pursuant to this Agreement; or

 

    (iv)          a material breach by the Company of any material provision of this Agreement (including, but not limited to, the failure of the Company to pay timely any amount, or to provide any benefit, pursuant to the provisions of Sections 3 and 4).

 

  

3

  

 

The Executive shall provide the Company with written notice within ninety (90) days of the initial existence of the event or condition that gives the Executive Good Reason to terminate this Agreement and the Executive’s employment hereunder, which notice will describe such event or condition.  In the case of conduct described above, Good Reason will not be considered to exist unless the Company is given thirty (30) days from the date of such notice to cure such breach or condition to the reasonable satisfaction of the Executive.  If the Company cures such breach or condition to the reasonable satisfaction of the Executive within such thirty (30) day period, the Executive shall not be entitled to terminate this Agreement, and the Executive’s employment hereunder, for Good Reason as a result of such event or condition.

 

(c)           By the Company.  The Company shall have the right to terminate this Agreement, and the Executive’s employment hereunder, for any reason or for no reason, and with or without Cause (as hereinafter defined).  For purposes of this Agreement, the Company shall have “Cause” to terminate this Agreement, and the Executive’s employment hereunder:

 

(i)           upon (A) the indictment (as hereinafter defined) or conviction of, or plea of nolo contendere by, the Executive for (x) any felony or (y) a misdemeanor involving moral turpitude, deceit, dishonesty or fraud, (B) the existence of any factor or circumstance that prevents the Executive from serving as General Counsel of a business enterprise that holds or desires to hold one or more liquor licenses or (C) the failure of Executive to hold a license to practice law in Florida or any other state of the United States;

 

(ii)           upon the Executive’s material violation of policies and procedures of the Company as set forth from time to time;

 

(iii)           as a result of the Executive’s gross negligence or willful misconduct with respect to the Company or willful failure or refusal to perform the Executive’s duties under this Agreement;

 

(iv)           any act by the Executive of fraud, misappropriation or embezzlement with respect to the Company or any of its affiliates or subsidiaries (monetarily or otherwise);

 

(v)           the Executive engaging in any activity in material violation of the restrictions set forth in Section 8 hereof; or

 

(vi)           upon a material breach by the Executive of any of the Executive’s material obligations under this Agreement.

 

For purposes of this Agreement, the term “Indictment” shall mean an indictment, probable cause hearing or any other procedure pursuant to which an initial determination of probable or reasonable cause with respect to such offense is made.

 

The Company shall provide the Executive with written notice describing any event or condition that gives the Company Cause for terminating this Agreement and the Executive’s employment hereunder.  In the case of conduct described in paragraphs (ii), (iii) or (vi) above, Cause will not be considered to exist unless the Executive is given thirty (30) days from the date of such notice to cure such breach or condition to the reasonable satisfaction of the Board.  If the Executive cures such breach or condition to the reasonable satisfaction of the Board within such thirty (30) day period, then the Company shall not be entitled to terminate this Agreement, and the Executive’s employment hereunder, for Cause.

 

  

4

  

 

6.            Termination Procedure.

 

(a)           Notice of Termination.  Any termination of this Agreement, and the Executive’s employment hereunder, whether by the Company or by the Executive, during the Term of this Agreement, except as a result of the Executive’s death, shall be communicated by written notice of termination to the other party hereto in accordance with Section 11(e).  Such notice of termination shall state the specific termination provision in this Agreement relied upon in terminating this Agreement, and the Executive’s employment hereunder, and the notice of termination shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for such termination.

 

(b)           Date of Termination.  The effective date of any termination of this Agreement, and the Executive’s employment hereunder, whether by the Company or by the Executive, shall be, in the event of the Executive’s death, the date of her death, or, in the event of termination for any other reason, the date on which the notice of termination referred to in paragraph (a) of this Section 6 is given or any later date (within thirty (30) days after the giving of such notice of termination) set forth in such notice of termination.  In any event, however, the date of termination will not be earlier than the date of Separation from Service within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended

 

7.            Termination, Expiration and Sale of Company Compensation and Benefit.  Under the circumstances described in this Section 7, Company shall provide the Executive with the payments and benefits set forth below; provided, however, as a specific condition to being entitled to any payments or benefits under this Section 7 other than the “Accrued Compensation” as defined below, the Executive must have resigned as a director, trustee and officer of the Company and all of its subsidiaries and as a member of any committee of the board of directors of the Company and its subsidiaries of which she is a member and must have executed a Release in favor of the Company and its affiliates.  Executive acknowledges and agrees that the payments set forth in this Section 7 constitute liquidated damages for termination of her employment during the Employment Period, which the parties hereto have agreed to as being reasonable, and Executive acknowledges and agrees that she shall have no other remedies in connection with or as a result of any such termination.

 

(a)            General Termination Provision.  Except as provided below, upon termination of this Agreement, the Company shall pay to the Executive (or the Executive’s estate, in the case of her death) immediately after the effective date of termination the Executive’s Base Salary that has been fully earned but not yet paid to the Executive as well as all expenses incurred by the Executive prior to the effective date of termination that the Company is required to reimburse, but had not yet reimbursed, the Executive for in accordance with the terms and provisions of Section 4.

 

  

5

  

 

(b)           Termination without Cause or Resignation for Good Reason or Within 30 Days After Sale of Company.  If this Agreement, and the Executive’s employment hereunder, are terminated (1) by the Company without Cause, (2) by the Executive for Good Reason or (3) by the Executive within 30 days after a Sale of the Company, as defined in the Restricted Stock Agreement, the Executive shall be entitled to the sum of:

 

(i)           the Executive’s Base Salary and Bonus, in each case only to the extent that the Base Salary and Bonus have been fully earned but not yet paid, as well as all expenses incurred by the Executive prior to the effective date of termination that the Company is required to reimburse, but had not yet reimbursed, the Executive for in accordance with the terms and provisions of Section 4 (all such compensation and expenses collectively referred to in this Section as the “Accrued Compensation”); and

 

(ii)           an amount equal to the sum of (A) one (1) times the Executive’s then-current Base Salary and (B) one (1) times the Executive’s average Bonus . . . which total amount shall be paid in accordance with paragraph (c) of this Section 7.

 

(c)           Timing of Payments; Compliance with Section 409A of the Code.  The Accrued Compensation shall be paid within 10 business days after the effective date of termination, and other amounts payable pursuant to this Section 7 shall be paid on the 60th day after the effective date of termination, except to the extent that payment of any such amounts is required to be delayed in order to satisfy the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”), in which case the amounts the payment of which is required to be delayed in order to satisfy the requirements of Section 409A shall accrue interest at the prime rate as reported in the Wall Street Journal on the 60th day after the effective date of termination (or the nearest business day if such date is not a business day) and shall be paid in a lump sum to the Executive as soon as permitted without causing a violation of Section 409A.  This Agreement is intended to comply with the applicable requirements of Section 409A and its corresponding regulations and related guidance and shall be administered in accordance with Section 409A to the extent such section applies.  Notwithstanding anything in this Agreement to the contrary, to the extent that Section 409A applies to payments under this Section 7, or any other section of this Agreement, such payments may only be made in a manner permitted by Section 409A and the Company shall use its best efforts to comply with the guidance of the Internal Revenue Service to ensure compliance, and in the event of non-compliance, limit penalties incurred.

 

8.            Non-Disclosure, Non-Solicitation and Related Obligations.

 

(a)            Executive Acknowledgements. The Executive acknowledges (i) that during the Term and as a part of the Executive’s employment hereunder, the Executive shall be afforded access to Confidential Information (as hereinafter defined), (ii) that public disclosure or utilization of such Confidential Information in violation of this Agreement could have a material and adverse impact on the Company and its business and (iii) that, accordingly, the non-disclosure provisions of this Agreement are reasonable and necessary to prevent the improper use or disclosure of Confidential Information.  The Executive further acknowledges (w) that the Company’s business is national in scope and its restaurants are marketed throughout the United States, (x) that the Company and its services compete with other businesses and restaurants located throughout the United States, (y) that the Company provides resources and training to the Company’s employees (including the Executive) related to the Company’s services and processes that are available only to the Company’s employees and cannot be acquired outside of the Company and (z) that, accordingly, the non-solicitation and related restrictive provisions of this Agreement are reasonable and necessary to protect the Company’s goodwill with its customer base, its investment in its employees and its interests in its Confidential Information.

 

  

6

  

 

(b)           Non-Disclosure Obligation.  Without the prior written consent of the Company, except as may be required by applicable law, rule or regulation, the Executive will not, at any time, either during or after her employment with the Company, directly or indirectly, divulge or disclose to any person or entity, including, without limitation, any future employer, or use for the Executive’s own or others’ benefit or gain, any financial information, plans for expansion, prospects, customers, tenants, suppliers, clients, sources of leads, methods of doing business, intellectual property, plans, products, data, results of tests or any other trade secrets or confidential materials or like information of the Company, including, without limitation, any and all information and instructions, technical or otherwise, prepared or issued for the use of the Company (collectively, the “Confidential Information”), it being the intent of the Company, with which intent the Executive hereby agrees, to restrict the Executive from dissemination or using any like information that is not readily available to the general public.

 

(c)           Information is Property of the Company.  All books, records, accounts, customer, client and other lists, customer and client street and e-mail addresses and information (whether in written form or stored in any computer medium) relating in any manner to the business, operations, or prospects of the Company, whether prepared by the Executive or otherwise coming into the Executive’s possession, shall be the exclusive property of the Company and shall be returned immediately to the Company upon the expiration of this Agreement or earlier termination of the Executive’s employment with the Company, or at the Company’s request at any time.  Upon the expiration of this Agreement or earlier termination of the Executive’s employment with the Company, the Executive shall immediately deliver to the Company all lists, books, records, schedules, data and other information (including all copies thereof) of every kind relating to or connected with the Company and its activities, business and customers.

 

(d)           Covenant Not to Solicit.  The Executive agrees that, during the Term and for a period of two (2) years after the termination (but not the expiration) of this Agreement, and the Executive’s employment hereunder (not including any expiration upon non-renewal) (such two (2) year period, the “Post-Employment Restricted Period”), the Executive shall not, directly or indirectly, without the prior written consent of the Company, interfere with or disrupt or diminish or attempt to disrupt or diminish, or take any action that could reasonably be expected to disrupt or diminish, any past, present or prospective relationship, contractual or otherwise, between the Company and any customer, supplier, consultant, employee or independent contractor of the Company.

 

(e)           No Raiding.  The Executive agrees that, during the Term and throughout the Post-Employment Restricted Period, the Executive shall not, directly or indirectly, without the prior written consent of the Company, solicit, recruit, employ or otherwise engage as an employee, independent contractor, consultant or advisor or attempt to solicit, recruit, employ or otherwise engage as an employee, independent contractor, consultant or advisor, any person who is or was an employee, independent contractor, consultant or advisor of or to the Company at any time during the Executive’s last twelve (12) months of employment with the Company, or in any manner induce or attempt to induce any person who is or was during the Executive’s last twelve (12) months of employment with the Company an employee, independent contractor, consultant or advisor of or to the Company to terminate that person’s relationship with the Company.

 

  

7

  

 

(f)           Non-Disparagement.  The Executive agrees that she will not, directly or indirectly, disparage the Company or disseminate, or cause or permit others to disseminate, negative statements regarding the Company or any employee, officer, director or agent of the Company.  Notwithstanding the foregoing, the Executive is not barred or otherwise restricted from exercising any right of speech or expression protected by applicable law, rule or regulation.  The Company agrees that it will not, directly or indirectly, disparage the Executive or disseminate, or cause or permit others to disseminate, negative statements regarding the Executive.

 

(g)           Survival. The obligations contained in this Section 8 shall survive the termination of this Agreement and, as applicable, shall be fully enforceable thereafter in accordance with the terms hereof.

 

9.            Enforcement and Remedies.

 

(a)            Enforcement. It is the desire and intent of the Company and the Executive that the provisions of this Agreement be enforced to the fullest extent permissible under the laws, rules, regulations and public policies applied in each jurisdiction in which enforcement is sought. Accordingly, although the Executive and the Company consider the provisions of this Agreement to be reasonable for the purpose of preserving and protecting the legitimate interests of the Company, if any particular provision of this Agreement shall be adjudicated to be invalid or unenforceable, such provision shall be deemed amended to delete the portion thus adjudicated to be invalid or unenforceable, such deletion to apply only with respect to the operation of such provision in the particular jurisdiction in which such adjudication is made.  Additionally, it is expressly understood and agreed that, although the Company and the Executive consider the provisions contained in this Agreement to be reasonable, if a final determination is made by a court of competent jurisdiction that the time or territory or any other restriction contained in this Agreement, including, without limitation, in Section 8, is unenforceable against the Executive, the provisions of this Agreement shall be deemed amended to apply as to such maximum time and territory and to such maximum extent as such court may judicially determine or indicate to be enforceable.

 

(b)            Remedies. The Company and the Executive acknowledge that the Company’s damages at law would be an inadequate remedy for the breach or threatened breach by the Executive of any provision of Section 8.  Accordingly, the Company and the Executive agree, in the event of any such breach or threatened breach, that the Company shall be entitled to  seek temporary and permanent injunctive or other equitable relief restraining the Executive from such breach or threatened breach, as the Company may deem appropriate, without the accounting of all earnings, profits, and other benefits arising from any such breach or threatened breach.  The rights of the Company under this paragraph shall be cumulative and in addition to any other rights or remedies available to the Company hereunder or at law or in equity.

 

  

8

  

 

10.           Indemnity.  The Company shall, to the fullest extent permitted under the laws of the State of Delaware and the Company’s bylaws, indemnify, defend (with counsel selected by the Company) and hold harmless the Executive from and against all liabilities, costs and expenses, including, but not limited to, amounts paid in satisfaction of judgments, in settlement or as fines or penalties, and counsel fees and disbursements, reasonably incurred by the Executive in connection with the defense or disposition of, or otherwise in connection with or resulting from, any action, suit or other proceeding, whether civil, criminal, administrative or investigative, before any court or administrative or legislative or investigative body, in which the Executive may be or may have been involved as a party or otherwise or with which the Executive may be or may have been threatened, while in office or thereafter, by reason of the Executive’s being an officer of the Company or by reason of any action taken or not taken in such capacity, except with respect to any matter as to which the Executive shall have been finally adjudicated by a court of competent jurisdiction not to have acted in good faith in the reasonable belief that her action was in the best interests of the Company.  The Executive shall notify the Company in writing within ten days of any claim with respect to which indemnity may be sought hereunder.  The Executive agrees to the control of the defense of such claim by the Company and to the Company’s settlement of any such claim.

 

11.           Miscellaneous.

 

(a)           Withholding.  The Company shall withhold such amounts from any compensation or other benefits payable to the Executive under this Agreement on account of payroll and other taxes as may be required by applicable law, rule or regulation.

 

(b)           Successors; Binding Agreement.  This Agreement shall be binding upon, and shall inure to the benefit of, the parties hereto and their respective heirs, successors, permitted assigns and personal representatives.

 

(c)           Entire Agreement. This Agreement contains the entire understanding between the Company and the Executive and supersedes any and all other oral and written agreements or understandings between them.

 

(d)           Controlling Law; Venue. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Florida, without regard to its conflicts of law principles.  Each of the Company and the Executive unconditionally and irrevocably agrees that the exclusive forum and venue for any action, suit or proceeding shall be in Miami-Dade County, Florida, and each consents to submit to the exclusive jurisdiction, including, without limitation, personal jurisdiction, and forum and venue of the Circuit Courts of the State of Florida or the United States District Court for the Southern District of Florida, in each case, located in Miami-Dade County, Florida.

 

  

9

  

 

(e)           Notice.  All notices or other communications that are required or permitted hereunder shall be in writing and delivered personally, or sent by nationally-recognized, overnight courier or by registered or certified mail, return receipt requested and postage prepaid, addressed as follows:

 

	
To the Company:

	
Benihana Inc.

8685 Northwest 53rd Terrace

Miami, Florida  33166

Attention:  General Counsel

 

	
To the Executive:

	
Ms. Cristina L. Mendoza

[the most recent address provided to the Company for payroll tax reporting purposes]

 

or to such other address as either party may furnish to the other in writing in accordance herewith.  All such notices and other communications shall be deemed to have been received (i) in the case of personal delivery, on the date of such delivery, (ii) in the case of delivery by nationally-recognized, overnight courier, on the first business day immediately following dispatch and (iii) in the case of mailing, on the third business day following such mailing.

 

(f)           Amendment and Waiver.  No provision of this Agreement may be amended, modified or canceled unless such amendment, modification or cancellation is agreed to in a writing signed by the Executive and by a duly authorized officer of the Company, and no provision of this Agreement may be waived unless such waiver is set forth in a writing signed by the party to be charged.

 

(g)           Survival of Rights and Obligations. The respective rights and obligations of the Executive and the Company set forth in this Agreement shall survive the expiration or earlier termination of this Agreement to the extent necessary for the intended preservation of such rights and obligations.

 

(h)           Validity.  If any provision of this Agreement shall for any reason be finally held illegal, invalid or unenforceable by a court or agency of competent jurisdiction, such provision shall be modified by such court or the parties, as the case may be, so as to cause such provision to be legal, valid and enforceable to the maximum extent permitted by law (and to the extent modified, it shall be modified so as to reflect, to the extent possible, the intent of the parties) and shall in no way affect or impair the legality, validity or enforceability of the remaining provisions of this Agreement, which shall remain in full force and effect, and this Agreement shall be interpreted as if such illegal, invalid or unenforceable provision was not contained in this Agreement.

 

(i)           Counterparts.  This Agreement may be executed in counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

 

(j)           Headings.  All section and paragraph headings in this Agreement are for convenience of reference only and in no way define, limit or describe the scope of this Agreement or the intent of any provision hereof.

 

  

10

  

 

The parties hereto have duly executed this Agreement as of the date and year first above written.

 

	  	
BENIHANA INC.,

	  	
a Delaware corporation

	  	  	  	  
	  	
By:

	
/s/ Richard C. Stockinger

	  	
Name:  

	
Richard C. Stockinger

	  	
Title:  

	
CEO

	  	  	  	  
	  	
/s/ Cristina L. Mendoza

	  	
CRISTINA L. MENDOZA

 

  

11

  

 

EMPLOYEE RESTRICTED STOCK AGREEMENT

UNDER THE 2007 EQUITY INCENTIVE PLAN

OF BENIHANA INC.

 

In consideration of services to be rendered by you (the “Grantee”) to Benihana Inc., a Delaware corporation (the “Company”) or its subsidiary, you have been awarded a stock grant (the “Grant”) under the Company’s 2007 Equity Incentive Plan (the “2007 Plan”), which is incorporated herein by reference, covering a number of shares  (the “Shares”) of Class A Common Stock of the Company, par value $.10 per share (the “Common Stock”) as listed on Exhibit A (the “Information Page”) subject to the terms and conditions of this Agreement and the 2007 Plan.

 

1.            STOCK GRANT TERMS AND STOCK CERTIFICATES.  The Information Page sets forth, among other things:  (a) the date of the Grant; (b) the total number of Shares subject to the Grant; (c) the Vesting Dates (as defined in Paragraph 2 hereof); (d) the Vesting Prices (as defined in Paragraph 2 hereof); (e) the number of Shares subject to the Grant that vest (in the manner described in Paragraph 2 hereof) on the later to occur of (i) each Vesting Date and (ii) each Vesting Price Date (as defined in Paragraph 2 hereof); and (f) if any, the per Share consideration for the Grant. The stock certificate(s), if any, evidencing the Shares underlying the Grant shall be registered on the Company’s books in the name of the Committee (as defined in Paragraph 13 hereof) as of the date of Grant.  Physical possession or custody of any such stock certificate(s) shall be retained by the Company or by a bank or other institution designated by the Company, until such Shares are vested or forfeited in accordance with the terms of this Agreement.  While in its possession, the Company reserves the right to place a legend on the stock certificate(s) restricting the transferability of such certificate(s) and referring to the terms and conditions (including, without limitation, forfeiture) relating to the Shares represented by the stock certificate(s).  If the Shares subject to the Grant have been evidenced by stock certificate(s) pursuant to this Paragraph, then as soon as practicable after the end of the applicable Restricted Period (as defined in Paragraph 2 hereof), the Company shall cause unlegended stock certificate(s) covering the requisite number of vested Shares registered on the Company’s books in the name of the Grantee (or his permitted transferee pursuant to Paragraph 5 hereof), to be delivered to such person and will cancel the legended stock certificates.  Shares issued hereunder shall be fully paid and non-assessable.

 

2.            VESTING.  

 

(a)           General Vesting.  Except as otherwise set forth herein, the number of Shares underlying the Grant as listed on the Information Page will become vested and non-forfeitable on the date on which the applicable Restricted Period lapses, provided that, on the date on which such applicable Restricted Period lapses, the Grantee continues to be employed by the Company (the “Condition”).  Promptly following the lapse of each applicable Restricted Period, the Stock Plan Administrator will deliver to the Grantee (or his permitted transferee pursuant to Paragraph 5 hereof) the number of Shares with respect to which the Condition was satisfied on the date on which such applicable Restricted Period lapsed, subject to any amounts that are withheld pursuant to Paragraph 9.  The “Restricted Period” shall mean, with respect to any Share underlying the Grant, the period of time commencing on the date of the Grant and ending on the later to occur of (i) the applicable vesting date as listed on the Information Page (the “Vesting Date”) and (ii) the applicable Vesting Price Date.  The “Vesting Price Date” shall mean, with respect to any Share underlying the Grant, the date on which the average closing price of a share of Common Stock (as reported on the national stock exchange or interdealer quotation system on which the Common Stock is principally traded) for the then immediately preceding ninety (90) calendar days (the “Average Vesting Price”) equals or exceeds the applicable vesting price as listed on the Information Page (the “Vesting Price”).

 

  

1

  

 

(b)           Special Vesting Upon Jefferies-Advised Sale of Company.

 

(i)           The Board of Directors of the Company has announced its intent to explore strategic alternatives to maximize shareholder value, including a sale of the company, and recently retained Jefferies & Company, Inc. as exclusive financial advisor to advise it in the sale process.  A “Sale of the Company,” as defined in (iii) below, pursuant to a transaction for which Jefferies & Company, Inc. serves as advisor is referred to in this Agreement as a “Jefferies-Advised Sale.”

 

(ii)           Notwithstanding subparagraph Paragraph 2(a), above, if a Jefferies-Advised Sale occurs and the price paid per share of Common Stock in the transaction resulting from such Jefferies-Advised Sale equals or exceeds $10 per share, then from and after the occurrence of such Jefferies-Advised Sale, the restrictions comprising both the Vesting Date and Vesting Price Date components of the Restricted Period shall be deemed to be satisfied (as of the occurrence of such Jefferies-Advised Sale) with respect to all Shares underlying the Grant.

 

(iii)           Unless otherwise agreed to in writing by the Grantee and the Company prior to the applicable event, a “Sale of the Company” means the acquisition (other than from the Company) by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (excluding, for this purpose, the Company or its affiliates, or any employee benefit plan of the Company or its affiliates that acquires beneficial ownership of the Company) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of more than 80% of either the then outstanding stock of the Company or the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors of the Company.

 

(c)           Special Vesting Upon Other Sale of Company

 

Notwithstanding subparagraph (a) of this Paragraph 2, if a Sale of the Company, as defined in Paragraph 2(b)(iii), other than a Jefferies-Advised Sale, occurs before all Shares otherwise vest under Paragraph 2(a), then from and after the occurrence of such Sale of the Company:  (i) the restrictions comprising the Vesting Date component of the Restricted Period shall be deemed to be satisfied (as of the occurrence of such Sale of the Company) with respect to all Shares underlying the Grant; and (ii) the restrictions comprising the Vesting Price Date component of the Restricted Period shall be deemed to be satisfied (as of the occurrence of such Sale of the Company) with respect to any Shares underlying the Grant that have an applicable Vesting Price that is less than or equal to the price paid per share of Common Stock in the Sale of the Company.  If, upon the occurrence of such Sale of the Company and after giving effect to the immediately preceding sentence, less than all of the Shares underlying the Grant have vested pursuant to this Paragraph 2(c), then, notwithstanding the occurrence of such Sale of the Company, the restrictions comprising the Vesting Price Date component of the Restricted Period shall continue unaffected and in full force and effect with respect to all of the Shares underlying the Grant other than the Shares that have so vested.

 

  

2

  

 

(d)           “Average Vesting Price” After Cessation of Public Trading

 

If less than all of the Shares underlying the Grant have vested at or prior to the time, if any, that the Common Stock is no longer traded on a national securities exchange or quoted on an interdealer quotation system, then, following the end of each calendar quarter, the Committee shall determine the deemed value of the shares that shall be deemed the applicable “Average Vesting Price.”  If any Shares underlying the Grant vest pursuant to this Paragraph 2 after the time, if any, that the Common Stock is no longer traded on a national securities exchange or quoted on an interdealer quotation system, then the Grantee shall have the right to sell to the Company, and, upon written notice thereof from the Grantee, the Company shall purchase from the Grantee, such so vested Shares for the price per Share of the Average Vesting Price determined by the Committee with respect to the calendar quarter immediately preceding the date on which such Shares have so vested.  Such purchase by the Company shall be consummated within 45 days after receipt of the written notice from the Grantee.

 

3.             FORFEITURE OF UNVESTED SHARES UPON TERMINATION OF EMPLOYMENT.  

 

(a)           General – Forfeiture Upon Termination of Employment

 

Except (i) with respect to Shares that have vested pursuant to Paragraph 2 on or before the employment termination date, and (ii) as provided below, in the event that the Grantee ceases as an employee of the Company for any reason during the Restricted Period (including, without limitation, due to death or disability), all Shares subject to the Grant shall be forfeited by the Grantee as of the date that such employment terminates.  Any Shares covered by the Grant that are forfeited by the Grantee shall be transferred to the Company and have the status of treasury shares.  The Committee in its discretion may waive in whole or in part any time-based Conditions that have not been satisfied except in connection with an employment termination for gross misconduct.

 

	
  

	
(b)

	
Special Vesting Upon Jefferies-Advised Sale After Termination of Employment Without Cause or for Good Reason

 

In the event that the employment of the Grantee pursuant to that certain Employment Agreement between the parties in effect on the date of Grant (the “Employment Agreement’) is terminated by the Company without Cause or by the Executive for Good Reason (as defined in the Employment Agreement) during the Restricted Period and within six months before the occurrence of a Jefferies-Advised Sale in which the price paid per share of Common Stock in the transaction resulting from such Jefferies-Advised Sale equals or exceeds $10 per share, then notwithstanding subparagraph (a) of this Paragraph 3, the restrictions comprising the Vesting Date component of the Restricted Period shall be deemed to be satisfied (as of the occurrence of such Jefferies-Advised Sale) with respect to all Shares underlying the Grant.

 

  

3

  

 

4.             EMPLOYMENT. In consideration of the awarding of the Grant, the Grantee will fulfill all the duties and obligations of his employment by the Company or its subsidiary.  Nothing in this Agreement shall confer upon the Grantee any right to similar stock grants in future years or any right to be continued in the employ of the Company or its subsidiaries or shall interfere in any way with the right of the Company or any such subsidiary to terminate or otherwise modify the terms of the Grantee’s employment.

 

5.             RESTRICTIONS ON TRANSFER.  Except with respect to Shares that have vested pursuant to Paragraph 2, the Shares subject to the Grant shall not be transferable during the Restricted Period except as the Committee may permit to the extent permitted under the 2007 Plan, on a general or specific basis, subject to such conditions and limitations as may be determined by the Committee.  More particularly (but without limiting the generality of the foregoing), during the Restricted Period the Shares (other than Shares that have vested pursuant to Paragraph 2) may not be assigned, transferred (except as provided above), pledged or hypothecated in any way, shall not be assignable by operation of law and shall not be subject to execution, attachment, pledge, hypothecation or other disposition contrary to the provisions hereof, and the levy of any execution, attachment or similar process upon the Shares shall be null and void and without effect.

 

6.             EFFECT ON OTHER BENEFITS.  In no event shall the value of the Shares covered by the Grant awarded under this Agreement at any time be included as compensation or earnings for purposes of determining any other compensation, retirement benefit or other benefit offered to employees of the Company or its subsidiaries under any benefit plan of the Company unless otherwise specifically provided for in such benefit plan.

 

7.             LEGAL COMPLIANCE.  The Company shall pay all original issue and transfer taxes with respect to the issuance of such Shares and all other fees and expenses necessarily incurred by the Company in connection therewith and will from time to time use its best efforts to comply with all laws and regulations that, in the opinion of counsel for the Company, shall be applicable thereto.

 

8.             REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF GRANTEE.  The Grantee hereby represents and warrants to the Company that he: (i) has the legal right and capacity to enter into this Agreement and fully understands the terms and conditions of this Agreement and (ii) is acquiring the Shares for investment purposes only and not with a view to, or in connection with, the public distribution thereof in violation of the Securities Act of 1933, as now in force or hereafter amended (the “Securities Act”).  The Grantee agrees he will not transfer the Shares except in compliance with any rules and regulations in force at the time of such transfer under the Securities Act, or any other applicable law, and a legend to this effect may be placed upon the certificate representing the Shares.

 

  

4

  

 

9.             TAXES.  The Grantee must pay or cause to be paid to the Company in cash upon demand any and all amounts due for the purpose of satisfying the Company’s liability, if any, to withhold federal, state or local income tax or employment tax (plus interest or penalties thereon, if any, caused by a delay by the Grantee in making such payment) incurred by reason of the receipt of the Grant (including any such taxes incurred as a result of the Grantee’s election pursuant to Paragraph 10 hereof) or by reason of the vesting of the Shares in accordance with the terms of this Agreement.  By accepting this Grant, the Grantee consents and directs that the Stock Plan Administrator may, but is not obligated to, withhold the number of Shares having an aggregate fair market value as of the date preceding the withholding sufficient to satisfy the Grantee’s obligations hereunder and to deliver such Shares to the Company.  In addition, the Company shall, to the extent permitted by law, have the right to deduct such required withholding from any payment of any kind otherwise due to the Grantee.  The Grantee shall consult her own tax advisors regarding the tax consequences to him or her of the receipt of the Shares, of the making of the election pursuant to Paragraph 10 hereof, or of any particular transaction relating to the Shares.

 

10.           TAX ELECTION. The Grantee hereby agrees to deliver to the Company a signed copy of any documents he may file with the Internal Revenue Service evidencing an election under Section 83(b) of the Internal Revenue Code of 1986 as amended, which copy shall be delivered to the Company within five (5) business days after the date on which any such election is made.

 

11.           CONDITION PRECEDENT TO GRANT. In the event that the award of the Grant shall be subject to, or shall require, any prior exchange listing, shareholder approval or other condition or act, pursuant to the applicable laws, regulations or policies of any stock exchange, federal or local government or its agencies or representatives, then the Grant hereunder shall not be deemed awarded until the fulfillment of such condition.

 

12.           RIGHTS AS A STOCKHOLDER.  Subject to the terms and conditions of this Agreement and the 2007 Plan, including, without limitation, the restrictions on transfer and the risk of forfeiture applicable to the Shares covered by the Grant during the Restricted Period, from and after the date of Grant, the Grantee shall have all the rights of a stockholder of the Company with respect to the Shares covered by the Grant, including the right to vote the Shares and the right to receive dividends or other distributions paid thereon, provided that any non-cash dividends will be subject to the terms and conditions of the 2007 Plan and this Agreement and will be held in the same manner as the Shares covered by the Grant.

 

13.           ADMINISTRATION.  The Compensation and Stock Option Committee (the “Committee”) shall have full authority and discretion, subject only to the express terms of the 2007 Plan, to decide all matters relating to the administration and interpretation of the 2007 Plan and this Agreement and the Grantee agrees to accept all such Committee determinations as final, conclusive and binding.  The Company may designate an internal department or may retain a third-party plan administrator to assist in the administration of the 2007 Plan.  The term “Stock Plan Administrator” as used herein shall mean such internal department or such third-party plan administrator as designated by the Company from time to time. 

 

  

5

  

 

14.           COSTS.  The Company shall not charge the Grantee for any part of the Company’s cost to administer and operate the 2007 Plan.  

 

15.           AMENDMENT.  This Agreement shall be subject to the terms of the 2007 Plan, as may be amended by the Company from time to time, except that no amendment of the 2007 Plan adopted after the date of this Agreement shall impair the Grantee’s rights hereunder without his or her consent.  In addition to the foregoing, this Agreement may be amended by the Committee, provided that no such amendment shall impair the Grantee’s rights hereunder without his or her consent.

 

16.           DATA PRIVACY.  By entering into this Agreement, the Grantee (a) authorizes the Company and its subsidiaries and the Stock Plan Administrator or any agent of the Company providing recordkeeping services for the 2007 Plan to disclose to each other such information and data as either of them shall request in order to facilitate the award of Grants and the administration of the 2007 Plan; (b) waives any data privacy rights the Grantee may have with respect to such information; and (c) authorizes the Company and the Stock Plan Administrator or any agent of the Company providing recordkeeping services for the 2007 Plan to store and transmit such information in electronic form.

 

17.           NOTICES. All notices and communications by the Grantee (or his or her permitted transferee) in connection with this Agreement or the Shares granted hereunder shall be delivered to the Stock Plan Administrator.  Unless otherwise directed by the Company, notices to the Stock Plan Administrator shall be delivered in writing by nationally recognized overnight courier, certified mail, postage prepaid or by facsimile to the attention of Chief Financial Officer, Benihana Inc., 8685 N.W. 53rd Terrace, Miami, Florida 33166 (facsimile: (305) 592-6371).  In the event the Company retains a third party plan administrator to administer the 2007 Plan, the Grantee will be advised of the procedure to provide notices to such third party plan administrator and the Company. All notices and communications by the Stock Plan Administrator or the Company to the Grantee (or his or her permitted transferee) in connection with this Agreement shall be given in writing and shall be delivered electronically to the Grantee’s e-mail address appearing on the records of the Company, or by nationally recognized overnight courier or certified mail, postage prepaid to the Grantee’s residence or to such other address as may be designated in writing by the Grantee.

 

18.           ENTIRE AGREEMENT AND WAIVER.  This Agreement and the 2007 Plan contain the entire understanding of the parties and supersede any prior understanding and agreements between them representing the subject matter hereof.  To the extent that there is an inconsistency between the terms of the 2007 Plan and this Agreement, except as specifically set forth herein, the terms of the 2007 Plan shall control.  There are no other representations, agreements, arrangements or understandings, oral or written, between the parties hereto relating to the subject matter hereof that are not fully expressed herein or in the 2007 Plan.  Any waiver or any right or failure to perform under this Agreement shall be in writing signed by the party granting the waiver and shall not be deemed a waiver of any subsequent failure to perform.

 

  

6

  

 

19.           SEVERABILITY AND VALIDITY.  The various provisions of this Agreement are severable and any determination of invalidity or unenforceability of any one provision shall have no effect on the remaining provisions.

 

20.           GOVERNING LAW.  The interpretation, enforceability and validity of this Agreement shall be governed by the substantive laws (but not the choice of law rules) of the State of Florida.

 

21.           SUBSIDIARY. As used herein, the term “subsidiary” shall mean any present or future corporation that would be a “subsidiary corporation” of the Company, as that term is defined in Section 424(f) of the Internal Revenue Code of 1986, as amended.

 

22.           HEADINGS; DEFINITIONS.  Paragraph and other headings contained in this Agreement are for reference purposes only and are in no way intended to describe, interpret, define or limit the scope, extent or intent of the Option or any provision hereof.  Capitalized terms not otherwise defined herein have the meanings ascribed to them in the 2007 Plan.

 

* * *

 

By my signature below I am accepting the stock grant described on the Information Page annexed hereto as Exhibit A, subject to the terms and conditions contained in this Employee Restricted Stock Agreement and the 2007 Plan.

 

	Dated:  	January 24, 2011	 	 	 
	
 

	
 

	/s/ Cristina L. Mendoza	 
	 	 	Name: Cristina L. Mendoza	 

 

Approved:

BENIHANA INC.

 

	By: 	/s/ Richard C. Stockinger	 	 	 

 

  

7

  

 

EXHIBIT A

 

INFORMATION PAGE

 

	  	  
	
Name of Grantee:

	
Cristina L. Mendoza

	  	  
	
Date of Grant:

	
January 24, 2011

	  	  
	
Number of Shares of Stock Grant:

	
75,000

	  	  
	
Per Share Consideration:

	
None

	  	  
	
Fair Market Value on the Date of Grant:

	
$8.20__

 

Vesting Schedule:

 

	
 

Number of Shares

	
 

Vesting Dates

	
 

Vesting Prices 1

	
9,375

	
Date of Grant

	
N/A

	
9,375

	
Date of Grant

	
N/A

	
6,250

	
July 1, 2011

	
$13.00

	
6,250

	
July 1, 2011

	
$13.00

	
6,250

	
July 1, 2012

	
$13.00

	
9,375

	
July 1, 2011

	
$20.00

	
9,375

	
July 1, 2011

	
$20.00

	
9,375

	
July 1, 2012

	
$20.00

	
9,375

	
July 1, 2013

	
$20.00

 

	
1

	
See the definition of the term “Vesting Price Date,” set forth in Paragraph 2 of the accompanying Employee Restricted Stock Agreement, which Paragraph 2 more fully describes the manner in which the Vesting Price Date component of the Restricted Period (including, without limitation, the Vesting Prices) operates with respect to the vesting of the applicable Shares.

 

  

8

  

 

AMENDMENT TO RESTRICTED STOCK AGREEMENT

UNDER THE 2007 EQUITY INCENTIVE PLAN

OF BENIHANA INC.

 

THIS AMENDMENT to Restricted Stock Agreement under the 2007 Equity Incentive Plan of Benihana Inc. is executed by Benihana Inc. and Cristina L. Mendoza, effective January 24, 2011.

 

WHEREAS, the parties entered into a Restricted Stock Agreement under the 2007 Equity Incentive Plan of Benihana Inc. (“RSA”) that provides vesting provisions upon a sale of Benihana Inc., as defined in the RSA; and

 

WHEREAS, the parties desire to amend certain of the vesting provisions.

 

NOW, THEREFORE, the parties agree as follows:

 

1.           Section 2 of the RSA and Section 3(b) of the RSA are amended to read as provided in the Attachment to this Amendment effective upon execution of this Amendment.

 

2.           This Amendment also applies to the definition of “Jefferies-Advised Sale of the Company” referred to in the Employment Agreement between the parties dated January 24, 2011.

 

	  	
BENIHANA INC.

 

	  	
By:  

	
/s/ Richard C. Stockinger

 

	  	
Print Name:  

	
Richard C. Stockinger

 

	  	
Print Title:

	
CEO

 

	  	
Date:  

	
January 24, 2011

 

	  	
/s/ Cristina L. Mendoza

	 	CRISTINA L. MENDOZA

 

 

 

 

 

ATTACHMENT TO AMENDMENT TO RESTRICTED STOCK AGREEMENT

BENIHANA INC. AND CRISTINA L. MENDOZA

 

A.           Section 2 of the Restricted Stock Agreement is amended to read as follows:

 

2.           VESTING.  

 

(a)           General Vesting.  Except as otherwise set forth herein, the number of Shares underlying the Grant as listed on the Information Page will become vested and non-forfeitable on the date on which the applicable Restricted Period lapses, provided that, on the date on which such applicable Restricted Period lapses, the Grantee continues to be employed by the Company (the “Condition”).  Promptly following the lapse of each applicable Restricted Period, the Stock Plan Administrator will deliver to the Grantee (or his permitted transferee pursuant to Paragraph 5 hereof) the number of Shares with respect to which the Condition was satisfied on the date on which such applicable Restricted Period lapsed, subject to any amounts that are withheld pursuant to Paragraph 9.  The “Restricted Period” shall mean, with respect to any Share underlying the Grant, the period of time commencing on the date of the Grant and ending on the later to occur of (i) the applicable vesting date as listed on the Information Page (the “Vesting Date”) and (ii) the applicable Vesting Price Date.  The “Vesting Price Date” shall mean, with respect to any Share underlying the Grant, the date on which the average closing price of a share of Common Stock (as reported on the national stock exchange or interdealer quotation system on which the Common Stock is principally traded) for the then immediately preceding ninety (90) calendar days (the “Average Vesting Price”) equals or exceeds the applicable vesting price as listed on the Information Page (the “Vesting Price”).

 

(b)           Special Vesting Upon Jefferies-Advised Sale of Company.

 

(i)           The Board of Directors of the Company (the “Board”) has announced its intent to explore strategic alternatives to maximize shareholder value, including a sale of the Company, and recently retained Jefferies & Company, Inc. as exclusive financial advisor to advise it in the sale process.  A “Sale of the Company,” as defined in (iii) below, pursuant to a transaction for which Jefferies & Company, Inc. serves as advisor is referred to in this Agreement as a “Jefferies-Advised Sale.”

 

(ii)           Notwithstanding Paragraph 2(a), above, if a Jefferies-Advised Sale occurs and the value of the consideration per share of Common Stock (to include, for purposes of this Paragraph 2, Common Stock and Class A Common Stock of the Company) in the transaction resulting from such Jefferies-Advised Sale equals or exceeds $10 per share (with any non-cash consideration valued at fair market value), then from and after the occurrence of such Jefferies-Advised Sale, the restrictions comprising both the Vesting Date and Vesting Price Date components of the Restricted Period shall be deemed to be satisfied (as of the occurrence of such Jefferies-Advised Sale) with respect to all Shares underlying the Grant.

 

  

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(iii)           Unless otherwise agreed to in writing by the Grantee and the Company prior to the applicable event, a “Sale of the Company” means the occurrence of both (A) approval or recommendation by the Board of the Company of a transaction that the Board determines is designed to result, directly or indirectly, in the acquisition (other than from the Company) by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (excluding, for this purpose, the Company or its affiliates, or any employee benefit plan of the Company or its affiliates that acquires beneficial ownership of the Company) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of all of the then outstanding Common Stock of the Company and (B) closing of such transaction, regardless of the percentage of Common Stock actually sold in the transaction.  For purposes of determining whether a Sale of the Company has occurred, any outstanding stock of the Company to be exchanged in the transaction for stock of an acquiring or surviving entity shall be treated as being acquired in the transaction by such individual, entity or group.

 

(c)           Special Vesting Upon Other Sale of Company

 

Notwithstanding Paragraph 2(a), above, if a Sale of the Company, as defined in Paragraph 2(b)(iii), other than a Jefferies-Advised Sale, occurs before all Shares otherwise vest under Paragraph 2(a), then from and after the occurrence of such Sale of the Company:  (i) the restrictions comprising the Vesting Date component of the Restricted Period shall be deemed to be satisfied (as of the occurrence of such Sale of the Company) with respect to all Shares underlying the Grant; and (ii) the restrictions comprising the Vesting Price Date component of the Restricted Period shall be deemed to be satisfied (as of the occurrence of such Sale of the Company) with respect to any Shares underlying the Grant that have an applicable Vesting Price that is less than or equal to the price offered per share of Common Stock in the Sale of the Company.  If, upon the occurrence of such Sale of the Company and after giving effect to the immediately preceding sentence, less than all of the Shares underlying the Grant have vested pursuant to this Paragraph 2(c), then, notwithstanding the occurrence of such Sale of the Company, the restrictions comprising the Vesting Price Date component of the Restricted Period shall continue unaffected and in full force and effect with respect to all of the Shares underlying the Grant other than the Shares that have so vested.

 

(d)           “Average Vesting Price” After Cessation of Public Trading

 

If less than all of the Shares underlying the Grant have vested at or prior to the time, if any, that the Common Stock is no longer traded on a national securities exchange or quoted on an interdealer quotation system, then, following the end of each calendar quarter, the Committee shall determine the deemed value of the shares that shall be deemed the applicable “Average Vesting Price.”  If any Shares underlying the Grant vest pursuant to this Paragraph 2(d) after the time, if any, that the Common Stock is no longer traded on a national securities exchange or quoted on an interdealer quotation system, then the Grantee shall have the right to sell to the Company, and, upon written notice thereof from the Grantee, the Company shall purchase from the Grantee, such vested Shares for the price per Share of the Average Vesting Price determined by the Committee with respect to the calendar quarter immediately preceding the date on which such Shares have vested.  Such purchase by the Company shall be consummated within 45 days after receipt of the written notice from the Grantee.

 

  

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B.  Section 3(b) of the Restricted Stock Agreement is amended to read as follows:

 

	
  

	
(b)

	
Special Vesting Upon Jefferies-Advised Sale After Termination of Employment Without Cause or for Good Reason

 

In the event that the employment of the Grantee pursuant to that certain Employment Agreement between the parties in effect on the date of Grant (the “Employment Agreement’) is terminated by the Company without Cause or by the Executive for Good Reason (as defined in the Employment Agreement) during the Restricted Period and within six months before the occurrence of a Jefferies-Advised Sale in which the price paid per share of Common Stock in the transaction resulting from such Jefferies-Advised Sale equals or exceeds $10 per share, then notwithstanding subparagraph (a) of this Paragraph 3, the restrictions comprising both the Vesting Date and Vesting Price Date components of the Restricted Period shall be deemed to be satisfied (as of the occurrence of such Jefferies-Advised Sale) with respect to all Shares underlying the Grant.

 

 

 

 

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