CONSULTING AGREEMENT
This consulting agreement (this "Agreement") is made the 28th day of March
2002 by and between Covenant Financial Corporation (the "Company"), and Xxxxxxx
X. Xxxxxxx (the "Consultant").
RECITALS
WHEREAS, the Company wishes to engage the Consultant with respect to
certain aspects of its business;
WHEREAS, the Consultant is willing to make available to the Company the
consulting services provided for in the Agreement as set forth below;
AGREEMENT
NOW THEREFORE, in consideration of the premises and the respective
covenants and agreements of the parties herein contained, the parties hereto
agree as follows:
1. TERM
The term of this Agreement shall commence on the date hereof and end on
June 30, 2002.
2. CONSULTING SERVICES
(a) Business management consulting services.
(b) Compensation. In consideration of the consulting services set forth in
paragraph 2 (a), and subject to the terms and conditions set forth
herein the Company hereby agrees to issue to Consultant 10,000 shares
of the Company's Common stock (the "Shares") and register such shares
at the time of initial issuance, or immediately thereafter, on Form
S-8 under the Securities Act of 1933.
(c) Issuance. Issuance and delivery of the Common Stock shall be within 10
days of the filing of the Form S-8, at which time, the Company shall
deliver to the Consultant:
(i) the certificate or certificates evidencing the Shares to be
issued to the Consultant and the respective dates, registered in
the name of the Consultant; and
(ii) evidence that the Shares have been registered on Form S-8 to be
filed upon issuance of the Shares to the Consultant, registering
for resale thereof.
(d) Expenses.
During the term of the Consultant's engagement hereunder. The Consultant
shall be entitled to receive prompt reimbursement for all reasonable
expenses incurred by the Consultant in performing services hereunder.
3. CONFIDENTIAL INFORMATION
(a) Confidential Information. In connection with the providing of
Consulting Services, hereunder, the Company may provide the Consultant with
information concerning the Company which the Company deems confidential (the
"Confidential Information"). The Consultant understands and agrees that any
Confidential Information disclosed pursuant to this Agreement is secret,
proprietary and of great value to the Company, which value may be impaired if
the secrecy of such information is not maintained. The Consultant further agrees
that she will take reasonable security measures to preserve and protect the
secrecy of such Confidential Information, and to hold such information in
confidence and not to disclose such information, either directly or indirectly
to any person or entity during the term of this agreement or any time following
the expiration or termination hereof; provided, however, that the Consultant may
disclose the Confidential Information to an assistant to whom disclosure is
necessary for the providing of services under this agreement.
(b) Exclusions. For purposes of this paragraph 3, the term Confidential
Information shall not include Information which (i) becomes generally available
to the public other than as a result of a disclosure by the Consultant or his
assistants, agents or advisors, or (ii) becomes available on a non-confidential
basis to the Consultant from a source other than the Company or its advisors,
provided that such source is not known to the Consultant to be bound by a
Confidentiality agreement with or other obligation of secrecy to the Company or
another party.
(c) Government Order. Notwithstanding anything to the contrary in this
Agreement, the Consultant shall not be precluded from disclosing any of the
Confidential Information pursuant to a valid order of any governmental or
regulatory authority, or pursuant to the order of any court or arbitrator.
(d) Injunctive Relief. The Consultant agrees that, since a violation of
this paragraph 3 would cause irreparable injury to the Company, and that there
may not be an adequate remedy at law for such violation, the Company shall have
the right in addition to any other remedies available at law or in equity, to
enjoin the Consultant in a court of equity for violating the provisions of this
paragraph 3.
4. REPRESENTATION AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Consultant that as of
the date hereof and as of the Closing Date (after giving effect to the
transactions contemplated hereby):
(a) Existence and Authority. The Company is a corporation duly
organized and validly existing in good standing under the laws of its
jurisdiction of incorporation and has full power and authority to own its
respective property, carry on its respective business as now being conducted,
and enter into and perform its obligations under this Agreement and to issue and
deliver the Shares to be issued by it hereunder. The Company is duly qualified
as a jurisdiction in which it is necessary to be so qualified to transact
business as currently conducted. This Agreement, has been duly authorized by all
necessary corporate action, executed, and delivered by the Company, and
constitutes the legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights of creditors generally and to general
principals of equity.
(b) Authorization and Validity of Shares. The Shares have been duly
authorized and are validly issued and outstanding, fully paid and non-assessable
and free of any preemptive rights. The Shares are not subject to any lien,
pledge, security interest or other encumbrance.
(c) Authorization of Agreement. The Company has taken all actions and
obtained all consents or approvals necessary to authorize it to enter into this
Agreement.
(d) No Violation. Neither the execution or delivery of this Agreement, the
issuance or delivery of Shares, the performance by the Company of its
obligations under this Agreement, nor the consummation of the transactions
contemplated hereby will conflict with, violate, constitute a breach of or a
default (with the passage of time or otherwise) under, require the consent or
approval of or filing with any person (other than consent and approvals which
have been obtained and filings which have been made) under, or result in the
imposition of a lien on or security interest in any properties or assets of the
Company, pursuant to the charter or bylaws of the Company, any award of any
arbitrator or any agreement (including any agreement with stockholders),
instruments, order, judgement, decree, statute, law, rule or regulation to which
the Company is a party or to which any such person or any of their respective
properties or assets is subject.
(e) Registration. The Shares have been, or will be upon the filing of an
S-8 Registration Statement, registered pursuant to the Securities Act of 1933,
as amended, and all applicable state laws.
5. FILINGS
The Company shall furnish to the Consultant, promptly after the sending or
filing thereof, copies of all reports which the Company sends to its equity
security holders generally, and copies of all reports and registration
statements which the Company files with the Securities and Exchange Commission
(the "Commission"), any other securities exchange or the National Association of
Securities Dealers, Inc. ("NASD")
6. SUPPLYING INFORMATION
The Company shall cooperate with the Consultant in supplying such publicly
available information as may be reasonably necessary for the Consultant to
complete and file any information reporting forms.
7. INDEMNIFICATION
(a) The Company shall indemnify the Consultant from and against any and
all expenses (including attorneys' fees), judgements, fines, claims, causes of
action, liabilities and other amounts paid (whether in settlement or otherwise
actually and reasonably incurred) by the Consultant in connection with such
action, suit or proceeding if (i) the Consultant was made a party to any action,
suit or proceeding by reason of the fact that the Consultant rendered advice or
services pursuant to this Agreement, and (ii) the Consultant acted in good faith
and in a manner reasonably believed by the Consultant to be in or not opposed to
the interests of the Company, and with respect to any criminal action or
proceeding, had no reasonable cause or believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the Consultant did not act in good faith in or
not opposed to the best interests of the Company, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his conduct
was unlawful. Notwithstanding the foregoing, the Company shall not indemnify the
Consultant with respect to any claim, issue or matter as to which the Consultant
shall have been adjudged to be liable for gross negligence or willful misconduct
in the performance or other duties pursuant to this Agreement unless and only to
the extent that the court in which such action or suit was brought shall
determine upon application that, despite the adjunction of liability, but in
view of all the circumstances of the case, the Consultant is fairly and
reasonably entitled to indemnity for such expenses which such court shall deem
proper.
(b) The Consultant shall indemnify the Company from and against any and
all expenses (including attorney's fees), judgements, fines, claims, causes of
action, liabilities and other amounts paid (whether in settlement or otherwise
actually and reasonably incurred) by the Company in connection with such action,
suit or proceeding if (i) the Company was made a party to any action, suit or
proceeding by reason of the fact that the Consultant rendered advice or services
pursuant to this Agreement, and (ii) the Consultant did not act in good faith
and in a manner reasonably believed by the Consultant to be in or not opposed to
the interests of the Company, and with respect to any criminal action or
proceeding, did not reasonably believe his conduct was unlawful. Notwithstanding
the foregoing, the Consultant shall not indemnify the Company with respect to
any claim, issue or matter as to which the Company shall have been adjudged to
be liable for gross negligence or willful misconduct in connection with the
performance of the Consultant's duties pursuant to this Agreement unless and
only to the extent that the court on which such action or suit was brought shall
determine upon application that, despite the adjunction of liability, but in
view of all circumstances of the case, the Company is fairly and reasonably
entitled to indemnity for such expenses which such court shall deem proper.
8. INDEPENDENT CONTRACTOR STATUS
It is expressly understood and agreed that this is a consulting
agreement only and does not constitute an employer-employee relationship.
Accordingly, the Consultant agrees that the Consultant shall be solely
responsible for payment of his own taxes or sums due to the federal, state, or
local governments, overhead, workmen's compensation, fringe benefits, pension
contributions and other expenses. It is further understood and agreed that the
Consultant is an independent contractor and the Company shall have no right to
control the activities of the Consultant other than during the express period of
time in which the Consultant is performing services hereunder, and that such
services provided hereunder and not because of any presumed employer-employee
relationship. The Consultant shall have no authority to bind the company.
The parties further acknowledge that the Company's services hereunder
are not exclusive, but that the Consultant shall be performing services and
undertaking other responsibilities, for and with other entities or persons,
which may directly or indirectly compete with the Company. Accordingly, the
services of the Consultant hereunder are on a part time basis only, and the
Company shall have no discretion, control of, or interest in, the Consultant's
services which are not covered by the terms of the Agreement. The Company hereby
waives any conflict of interest which now exists or may hereafter arise with
respect to Consultant's current employment and future employment.
9. NOTICE
All notices provided by this Agreement shall be in writing and shall be
given by facsimile transmission, overnight courier, by registered mail or by
personal delivery, by one party to the other, addressed to such other party at
the applicable address set forth below, or to such other address as may be given
for such purpose by such other party by notice duly given hereunder. Notice
shall be deemed properly given on the date of the delivery.
To Consultant: Xxxxxxx X. Xxxxxxx
000 00xx Xxxxxx XX
Xxxxxxxxx, XX 00000
To the Company: Covenant Financial Corporation
0000 Xxxxx Xxxxxxx Xxxxxxxxxx
Xxxxx 000, Xx. 0
Xxxxxx, Xxxxx 00000
10. MISCELLANEOUS
(a) Waiver. Any term or provision of this Agreement may be waived at
any time by the party entitled to the benefit thereof by a written instrument
duly executed by such party.
(b) Entire Agreement. This Agreement contains the entire understanding
between the parties hereto with respect to the transactions contemplated hereby,
and may not be amended, modified, or altered except by an instrument in writing
signed by the party against whom such amendment, modification, or alteration is
sought to be enforced. This Agreement supercedes and replaces all other
agreements between the parties with respect to any services to be performed by
the Consultant of behalf of the Company.
(c) Governing Law. This Agreement shall be construed and interpreted in
accordance with the laws of the State of Texas.
(d) Binding Effect. This Agreement shall bind and inure to the benefit of the
parties hereto and their respective heirs, executors, administrators,
successors and assigns.
(e) Construction. The captions and headings contained herein are inserted for
convenient reference only, are not a part hereof and the same shall not
limit or construe the provisions to which they apply. Reference in this
agreement to "paragraphs" are to the paragraphs in this Agreement, unless
otherwise noted.
(f) Expenses. Each party shall pay and be responsible for the cost and
expenses, including, without limitation, attorney's fees, incurred by such
party in connection with negotiation, preparation and execution of this
Agreement and the transactions contemplated hereby.
(g) Assignment. No party hereto may assign any of its rights or delegate any of
its obligations under this Agreement without the express written consent of
the other party hereto.
(h) No Rights to Others. Nothing herein contained or implied is intended or
shall be construed to confer upon or give to any person, firm or
corporation, other than the parties hereto.
(i) Counterparts. This Agreement may be executed simultaneously in two
counterparts, each of which shall be deemed an original, but both of which
together shall constitute one and the same agreement, binding upon both
parties hereto, notwithstanding that both parties are not signatories to
the original or the same counterpart.
IN WITNESS WHEREOF, the parties have executed this Agreement
on the date and year first above written.
COVENANT FINANCIAL CORPORATION
By:/s/ Xxxxxxx X. Xxxxxx
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Its: President
XXXXXXX X. XXXXXXX
By:/s/ Xxxxxxx X. Xxxxxxx
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