CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT ("Agreement") is made and entered into this
17th day of November, 1997, by and between XXXXXX GROUP, INC., a Delaware
corporation ("Xxxxxx") and 2M CAPITAL CORP., a Florida corporation
("Consultant").
W I T N E S S E T H:
WHEREAS, Xxxxxx, by and through its wholly-owned subsidiaries UNITED
INFORMATION SYSTEMS, INC., a Florida corporation, and UIS INDUSTRIAL LTDA, a
Brazilian corporation (collectively hereinafter referred to as "UIS"), is in
the business of assembling, manufacturing, distributing and selling computer
parts, components and accessories in Brazil ("Business"); and
WHEREAS, subject to the terms and conditions hereinafter set forth,
Xxxxxx desires to retain Consultant and Consultant desires to be retained by
Xxxxxx.
WHEREAS, Consultant has experience in the Business, in the management
of companies whose securities are traded in the United States markets and in
strategic planning and investor relations programs.
NOW, THEREFORE, in consideration of the mutual promises set forth
herein and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, Xxxxxx and Consultant hereby agree as
follows:
1. Recitals. The foregoing recitals are true and correct and are
incorporated herein by this reference.
2. Employment. In exchange for the Consultant Compensation (as
hereinafter defined) and subject to the other terms and conditions hereinafter
set forth, Xxxxxx hereby retains Consultant to perform the Consultant Duties
(as hereinafter defined) and those duties provided by Consultant through the
Oversight Committee pursuant to sections 3(b) and 3(c) and Consultant hereby
agrees to provide such services. The parties hereby agree that Consultant
shall be treated for all purposes as an independent contractor and not as an
employee of Xxxxxx, and Consultant agrees to report the Consultant
Compensation in his income and be solely responsible for payment of all
withholding and social security taxes thereon.
3. Consultant Duties; Indemnification.
(a) The "Consultant Duties" shall include reasonably assisting Xxxxxx
in (i) implementing and monitoring an investor relations program with
investors, investment advisors, market makers and brokers, including but not
limited to meeting with the foregoing and arranging for principal
officers of Xxxxxx to meet with the foregoing (the "Investor Relations Duties");
and (ii) implementing and monitoring a strategic planning process for Xxxxxx.
(b) In addition to the Consultant Duties set forth above, Xxxxxx
hereby agrees that Consultant, by and through a committee comprised of Xxxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxx and Xxxxxx Xxxxxxxxx ("Oversight Committee"), shall
have the right and obligation to consider and authorize, in its discretion,
"Release Requests" (as hereinafter defined). Certain shareholders of Xxxxxx
("Xxxxxx Shareholders") have shares of stock of Xxxxxx ("Xxxxxx Shares") that
are subject to contractual restrictions against the sale, transfer,
assignment, pledge, hypothecation, encumbrance or other direct or indirect
disposition of shares of stock of Xxxxxx ("Restrictions"). All requests by the
Xxxxxx Shareholders for a release of such Restrictions with respect to any or
all of such Xxxxxx Shares shall be made in writing to the Oversight Committee
at the address of Consultant, with a copy of such request to the President of
Xxxxxx ("Release Request"). The Oversight Committee shall consider all Release
Requests, taking into account such factors as the Oversight Committee shall
deem appropriate, which factors may include, but shall not be limited to,
communications with investment bankers, market makers, and executive officers
of Xxxxxx. The Oversight Committee may grant or deny Release Requests, in
whole or in part, in its sole discretion. All decisions of the Oversight
Committee shall be by majority vote. The Oversight Committee shall respond to
a Release Request within 14 days of the receipt of a Release Request.
Consultant may change the number and members of the Oversight Committee with
the prior consent of Xxxxxx, which consent shall not be unreasonably withheld.
Consultant may adopt such rules not inconsistent with the provisions of this
paragraph for the administration of its obligations hereunder.
(c) Xxxxxx acknowledges and agrees that the ability of Consultant to
perform the Investor Relations Duties is, in part, dependent upon a stable
supply of the securities of Xxxxxx. Xxxxxx further acknowledges that the
issuance and/or registration of additional securities by Xxxxxx in the future
may adversely impact upon the market for the securities of Xxxxxx, thus
impairing the ability of Consultant to perform the Investor Relations Duties.
Accordingly, Xxxxxx hereby agrees that during the term of this Agreement,
except with the prior written consent of the Oversight Committee, Xxxxxx shall
not, directly or indirectly, offer, sell, issue or transfer any shares of its
capital stock, or any security exchangeable or exercisable for, or convertible
into, shares of the capital stock of Xxxxxx.
(d) Xxxxxx hereby agrees to defend, indemnify and hold harmless
Consultant from and against any and all liability, expense or damage incurred
or sustained by reason of any act or omission in the conduct of the business
of Xxxxxx, including but not limited to in connection with Release Requests
and the administration of the Oversight Committee, whether prior to or
subsequent to the date hereof, including attorneys' fees and costs; provided,
however, Xxxxxx shall not indemnify Consultant or hold him harmless with
respect to any of the foregoing incurred in connection with the intentional
fraud, willful and wanton misconduct or gross negligence of Consultant.
(e) Xxxxxx hereby acknowledges and agrees that the rights and
obligations of the Oversight Committee, at the Oversight Committee's option,
may be transferred to any underwriter
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that underwrites and sells an offering of the securities of Xxxxxx for an amount
in excess of $10,000,000.
4. Term. The term of this Agreement shall be two (2) years, beginning
on the date set forth above ("Term").
5. Consultant Compensation. As compensation in full for Consultant's
performance of its obligations hereunder ("Consultant Compensation"), Xxxxxx
agrees to pay Consultant commencing on the day of Closing and on the same day
of the month thereafter the following: (a) $20,833 for each of the first four
(4) months of the Term; and (b) $500 for each of the remaining twenty (20)
months of the Term.
6. Options. To facilitate the performance of Consultant hereunder,
and as an inducement to retain executive and other employees and consultants,
Consultant shall be granted options ("Options") to purchase 500,000 shares of
Common Stock at $2.22 per share. The options are transferable, exercisable for
a period of two (2) years and can be cancelled by the Chairman of the Company
at any time. In addition, the holders of the Options are entitled to
registration rights, including piggyback registration rights, for shares of
Common Stock issuable upon exercise of the Options (whether or not the the
Options have been exercised at the time the Company files a registration
statement), as adjusted, such rights to be available when the Company files a
registration statement under the Securities Act of 1933, as amended ("33'
Act"), with respect to an offering for its own account of any class of
security (other than in connection with a merger pursuant to a Form S-3) or
for the account of the Company's shareholders. The Company shall file a
registration statement for the shares of Common Stock issuable upon exercise
of the Options within sixty (30) days after the date of the acquisition by the
Company of UIS and UIS Brazil and will use its best efforts to cause such
registration statement to become effective as soon as reasonably possible. The
Company shall in each case give written notice of the proposed filing to the
holder of the Options or shares issued upon exercise of the Options at least
thirty (30) days prior to the anticipated filing date, and such notice shall
offer such holder the opportunity to register such number of shares subject or
issued upon exercise of the Options as such holder may request. The Company
will use its best efforts to cause the underwriter, if any, to permit the
holder of the Options to include such shares of Common Stock on the same terms
and conditions as other shares of Common Stock the Company included therein.
Notwithstanding the foregoing, if the underwriter or underwriters of such
offering delivers a written opinion to the Company that the total number of
securities which such holders the Company or other persons and entities
entitled to include in such offering exceeds the number which can reasonably
be sold in such offering, then the securities to be offered for the account of
the holders of the shares of Common Stock issuable upon exercise of the
Options will be reduced pro rata to the extent necessary to reduce the total
number of securities to be included in such offering to the number recommended
by such underwriter. The Company will bear all expenses of such registration,
except that the holder of the Options shall bear the fees and expenses of any
counsel or other representative attributable to the shares of Common Stock
issued upon exercise of the Options (determined on a pro rata basis).
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7. Confidential Information and Competition.
(a) Confidential Information. Consultant hereby acknowledges that, in
conjunction with his performance of the Consultant Duties, it may be making
use of, acquiring and adding to confidential information of a special and
unique nature and value affecting and relating to Xxxxxx and its operations,
including, but not limited to: Xxxxxx'x Business, the identity of Xxxxxx'x
clients, the prices being charged by Xxxxxx to such clients, Xxxxxx'x
contracts, business records and other records, Xxxxxx'x and the Xxxxxx'x
clients' trade secrets, customer lists, billing forms, methods, and
procedures, trade names, manuals, photographs, samples, literature, sales aids
of every kind, software, advertising methods and strategies, information
regarding advertising locations, style and wording of all advertising, plans
for expansion or marketing strategies, and other similar information relating
to Xxxxxx, Xxxxxx'x clients and Xxxxxx'x Business (all the foregoing being
hereinafter referred to collectively as "Confidential Information").
Consultant further recognizes and acknowledges that all Confidential
Information is the exclusive property of Xxxxxx, is material and confidential,
and greatly affects the goodwill and the effective and successful conduct of
the business of Xxxxxx. Accordingly, Consultant hereby covenants and agrees
that it will use the Confidential Information only for the benefit of Xxxxxx
and shall not at any time, directly or indirectly, either during the term of
this Agreement or afterwards, divulge, reveal or communicate any Confidential
Information to any person, firm, corporation or entity whatsoever, or use any
Confidential Information for his own benefit or for the benefit of others,
regardless of whether Consultant may have had knowledge, or that others may
have had knowledge, of the Confidential Information prior to the execution of
this Agreement. Upon the Xxxxxx'x demand, Consultant shall promptly deliver to
Xxxxxx all materials and media in Consultant's possession that contain
Confidential Information.
(b) Competition. In view of the Confidential Information to be
retained by or disclosed to Consultant as hereinabove set forth and the
irreparable injury which would be caused Xxxxxx if the Consultant were to
compete with Xxxxxx, and as a material consideration and inducement to Xxxxxx
to enter into this Agreement, Consultant hereby covenants and agrees that:
(i) For a period of one (1) year following the end of the
Term, it shall not, in any location, directly or
indirectly, operate, organize, maintain, establish,
manage, own, participate in, or in any manner
whatsoever, individually or through any corporation,
firm or organization of which it shall be affiliated
in any manner whatsoever, have any interest in,
whether as owner, investor, operator, partner,
stockholder, director, trustee, officer, mortgagee,
employee, principal, agent, consultant or otherwise,
any other business or venture which engages in
Xxxxxx'x Business, or is otherwise in competition
with Xxxxxx or any assigns of Xxxxxx, unless such
activity shall have been previously agreed to in
writing by Xxxxxx and/or its successors and assigns.
Consultant acknowledges that Xxxxxx'x Business is
advertised and conducted throughout the United
States, and accordingly that this covenant against
competition shall extend to the entire United States.
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(ii) For a period of one (1) year following the end of the
Term, it shall not, directly or indirectly, divert
business from Xxxxxx or its successors or assigns, or
solicit business from, divert the business of, or
attempt to convert to other methods of using the same
or similar services as are provided by Xxxxxx, any
client or account of Xxxxxx.
(iii) For a period of one (1) year following the end of
the Term, it shall not, directly or indirectly,
solicit for employment, employ or otherwise engage
the services of, any employees or consultants of
Xxxxxx or its successors or assigns.
Notwithstanding the foregoing provisions of this Section 7(b), in the event
that Xxxxxx shall fail for any reason, after thirty days written notice by
Consultant, to pay the Consultant Compensation when due (either directly to
Consultant or into the registry of the court as part of any court proceeding),
or shall otherwise be in default under this Agreement, then the restraints
upon competition contained herein shall be of no further force and effect.
(c) Survival. The terms of this Section 7 shall survive the
termination of this Agreement.
8. Confidentiality. The parties and Xxxxxx Xxxxxxxxx agree that they
shall keep the terms of this Agreement confidential and shall not disclose
same to third parties, except that either party may disclose same as necessary
to secure legal or tax advice to prevent prosecution of an action or charge in
contravention hereof or as otherwise required by law.
9. Miscellaneous.
(a) Notices. Any notice, payment, or communication required or
permitted to be given by any provision of this Agreement shall be deemed
delivered, whether actually received or not, when deposited in a United States
Postal Service Depository, postage prepaid, registered or certified return
receipt requested, when sent by overnight courier, or by facsimile, if such
facsimile is followed by a hard copy of the facsimilied communication,
addressed to the parties as set forth below, or such other address as shall be
specified by written notice delivered to the other party hereto. Any such
notice shall be deemed to be delivered, given and received as of the date so
delivered.
To Xxxxxx: 0000 Xxxxxxxxx Xxxxxxxxx
Xxxxx 000 Xxxx
Xxxx Xxxxx, Xxxxxxx 00000
Attention: President
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To Consultant: 000 - 000xx Xxxxxx
Xxxxx 0000
Xxxxx Xxxxx, XX 00000
Attention: President
The time period in which a response to any such notice, demand or request must
be given shall commence to run from the date of receipt on the return receipt
of the notice, demand or request by the addressee thereof or the date of
actual receipt in the case of delivery by other means. Rejection or other
refusal to accept or the inability to deliver because of changed address of
which no notice was given shall be deemed to be receipt of the notice, demand
or request when sent.
(b) Entire Agreement. This Agreement sets forth all the
promises, covenants, agreements, conditions and understandings between the
parties hereto as to Consultant's employment with Xxxxxx, and supersedes all
prior and contemporaneous agreements, understandings, inducements or
conditions as to Consultant's employment with Xxxxxx, expressed or implied,
oral or written, except as herein contained.
(c) Binding Effect; No Assignment. This Agreement shall be
binding upon the parties hereto, their heirs, administrators, successors and
assigns. Except as otherwise provided in Section 3(e) hereof, any assignment
or delegation of duties in violation of this provision shall be null and void.
(d) Amendment. The parties hereby irrevocably agree that no
attempted amendment, modification, termination, discharge or change
(collectively, "Amendment") of this Agreement shall be valid and effective,
unless the parties shall unanimously agree in writing to such Amendment.
(e) No Waiver. No waiver of any provision of this Agreement
shall be effective unless it is in writing and signed by the party against
whom it is asserted, and any such written waiver shall only be applicable to
the specific instance to which it relates and shall not be deemed to be a
continuing or future waiver.
(f) Attorneys' Fees. If any party hereto is required to
engage in litigation against any other party hereto, either as plaintiff or as
defendant, in order to enforce or defend any of its or his rights under this
Agreement, and such litigation results in a final judgment in favor of such
party ("Prevailing Party"), then the party or parties against whom said final
judgment is obtained shall reimburse the Prevailing Party for all direct,
indirect or incidental expenses incurred by the Prevailing Party in so
enforcing or defending its or his rights hereunder, including, but not limited
to, all attorneys' fees and court costs and other expenses incurred throughout
all negotiations, trials or appeals undertaken in order to enforce the
Prevailing Party's rights hereunder.
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(g) Headings. The article and section headings contained in
this Agreement are inserted for convenience only and shall not affect in any
way the meaning or interpretation of the Agreement.
(h) Governing Law. This Agreement shall be construed in
accordance with the laws of the State of Florida and any proceeding arising
between the parties in any manner pertaining or related to this Agreement
shall, to the extent permitted by law, be held in Broward County, Florida.
(i) Further Assurances. The parties hereto will execute and
deliver such further instruments and do such further acts and things as may be
reasonably required to carry out the intent and purposes of this Agreement.
(j) Provisions Severable. This Agreement is intended to be
performed in accordance with, and only to the extent permitted by, all
applicable laws, ordinances, rules and regulations of the jurisdiction in
which the parties do business. If any provision of this Agreement, or the
application thereof to any person or circumstance shall, for any reason or to
any extent, be invalid or unenforceable, the remainder of this Agreement and
the application of such provision to other persons or circumstances shall not
be affected thereby, but rather shall be enforced to the greatest extent
permitted by law.
(k) Counterparts. This Agreement and any amendments may be
executed in one or more counterparts, each of which shall be deemed an
original, but all of which together will constitute one and the same
instrument.
THIS SPACE INTENTIONALLY BLANK
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IN WITNESS WHEREOF, Xxxxxx and Consultant have executed this
Agreement as of the date first above written.
Xxxxxx:
XXXXXX GROUP, INC., a Delaware
corporation
By:
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CONSULTANT:
2M CAPITAL CORP., a Florida corporation
By:
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JOINDER
The undersigned, as all of the shareholders of Consultant, hereby
join in this Agreement for the purpose of agreeing to be bound by the
provisions of Section 6 hereof; provided that this joinder shall not impose or
create any other obligation by the undersigned in favor of Xxxxxx.
/s/ XXXXXXX XXXXXXXXXX
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XXXXXXX XXXXXXXXXX
/s/ XXXXX XXXXXXX
--------------------------------------------
XXXXX XXXXXXX
JOINDER
The undersigned, hereby joins in this Agreement for the purpose of
agreeing to be bound by the provisions of Sections 3(b), 3(c) and 6 hereof;
provided that this joinder shall not impose or create any other obligation by
the undersigned in favor of Xxxxxx.
/s/ XXXXXX XXXXXXXXX
--------------------------------------------
XXXXXX XXXXXXXXX
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