CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (the "Agreement") is made as of August 29, 1997,
by and between RT INDUSTRIES, INC., d/b/a US Automotive Manufacturing, Inc., a
Delaware corporation ("RTI"), having an office located at Xxxxx 000, Xxxxxxx
Xxxxx, Xxxxxxxxxxxx, XX 00000 and RAMKO VENTURE MANAGEMENT, INC., a New York
corporation ("RamKo"), having an address of 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000.
R E C I T A L :
WHEREAS, RTI desires to engage RamKo and its employees, to provide
consultation and advice in the areas of business and corporate finance as they
relate to the business operations of RTI, including but not limited to the
services of a skilled professional reasonably requested by the executive
officers of the Company, such services to be substantially similar to those
performed by the principal financial officer (the "Consulting Services") and
RamKo desires to be engaged by RTI to provide the Consulting Services, all on
the terms and conditions hereinafter set forth.
A G R E E M E N T :
NOW THEREFORE, in consideration of the mutual covenants and agreements
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Engagement. RTI hereby engages RamKo, and RamKo hereby accepts such
engagement, to provide the Consulting Services to RTI, at such times as RTI may
reasonably require not to exceed twenty five (25) days per calendar quarter. If
RamKo provides Consulting Services for more than twenty five (25) days per
calendar quarter, RamKo shall be entitled to additional compensation as provided
in Section 8 hereof.
Notwithstanding anything in the foregoing provisions of this Section 1 to
the contrary, in the event RTI's chief executive officer should become disabled,
or die, or leave the employment of RTI during the term of this Agreement, then
RTI may call upon RamKo for considerably more extensive and intensive
consultation services than under ordinary circumstances for periods up to ninety
(90) consecutive days, recognizing, however, that RamKo's employees may be
engaged in other full-time businesses. Unless otherwise agreed between RamKo and
RTI, RamKo shall perform the Consulting Services at an office of RamKo to be
located in the City of New York (the "Office"). RTI agrees that RamKo shall have
ready access to the RTI staff and resources as necessary to perform the
Consulting Services provided for in this Agreement.
2. Term and Termination. This Agreement shall remain in effect for a term
of three (3) years, commencing on the date
hereof. The employment of RamKo and the obligations of RTI under this Agreement
may be terminated by the Board of Directors of RTI at any time for "cause" (as
hereinafter defined). Termination for "cause" shall mean termination for any one
or more of the following reasons: (A) misappropriation of corporate funds by an
employee, officer, agent or representative of RamKo, (B) conviction of any
officer or assigned consultant of RamKo of a felony, (C) willful or grossly
negligent violation of directions of the Board of Directors of RTI, (D) gross
and willful misconduct by an employee, officer, agent or representative of RamKo
resulting in material damage (monetarily or otherwise) to RTI, (E) material
breach of this Agreement.
If RTI at any time terminates this Agreement for "cause," RamKo shall be
entitled to all compensation, which is accrued and due and payable to it as at
the date of termination, and all incidental benefits from RTI provided
hereunder.
Timely written notice of any actions, acts, omissions, failures or refusals
to act, or events which may or will give rise to the termination of RamKo for
cause shall be provided to RamKo. Thereafter, if RTI elects to terminate this
Agreement for "cause," it shall do so by giving written notice thereof to RamKo,
which notice shall set forth the effective date of termination. Upon any
termination, whether for breach or otherwise, RTI shall be obligated to pay
RamKo the fees required under Section 3 and Section 8 hereof, if applicable,
through the date of termination and any unreimbursed expenses under Section 4
and Section 8 hereof, if applicable. The provisions of this Section and Sections
5 (Confidential and Proprietary Information), 6 (Defense and Indemnity), 10
(Arbitration), and 14 (Applicable Law), of this Agreement shall survive the
termination of this Agreement.
3. Compensation. As compensation for the Consulting Services, RTI hereby
promises to pay to RamKo Forty Five Thousand Dollars ($45,000.00) per calendar
quarter which is to be paid at the rate of $15,000 per month, in advance. No
other compensation or benefit shall be paid or provided to RamKo hereunder,
except for any additional Consulting Services as provided in Section 8 hereof.
4. Expenses. In addition to the compensation received pursuant to Section 3
hereof, during the term of this Agreement, RamKo shall be entitled to receive
prompt reimbursement from RTI for all reasonable and necessary out-of-pocket
expenses incurred by it in performing Consulting Services hereunder. Any item of
such expenses in excess of One Thousand Dollars ($1,000.00), however, shall be
reimbursable hereunder only if such item of expense has been approved by an
executive officer of RTI before it is incurred by RamKo, except for travel and
lodging expenses for RamKo traveling from the Office to any office or facility
of RTI. Reimbursement of any expense under this Section 4 in excess of Fifty
Dollars ($50.00) shall be made by RTI only upon submission by RamKo of itemized
proof (to the extent reasonably available) that
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such expense was actually incurred in performing Consulting Services hereunder
and the amount thereof.
5. Confidential and Proprietary Information.
(a) During the term of its engagement hereunder, RamKo, its employees and
other RamKo representatives may have access to, and familiarity with, the
confidential and proprietary information of RTI and its affiliates, including
but not limited to trade secrets, records, client and customer lists, data,
manufacturing and marketing methods (the "Confidential Information"). RamKo, its
employees, officers, agents, representatives and others shall not, whether
during or after RamKo's engagement by RTI, intentionally disclose, directly or
indirectly, the Confidential Information to any person or entity other than RTI
unless RamKo has received the prior written consent of RTI or is compelled to
disclose the Confidential Information by judicial or governmental process. Upon
termination of this Agreement, RamKo shall return to RTI, or destroy, any
material involving any such Confidential Information.
(b) Upon the termination of RamKo's employment for any reason whatsoever,
all documents, records, notebooks, equipment, price lists, specifications,
programs, customer and prospective customer lists and other materials which
refer or relate to any aspect of the businesses of RTI which are in the
possession of RamKo, including all copies thereof, except to the extent
necessary to protect or defend its legitimate business interests under this
Agreement or otherwise against the Company (the "Retained Copies") shall be
immediately returned to RTI or destroyed; provided, however, that RamKo
covenants (i) to provide the Company with a list, together with copies, of any
and all Retained Copies and (ii) not to use such Retained Copies for any
purpose, within the Commonwealth of Virginia and State of Florida or anywhere in
the continental United States where RTI conducts substantial business
activities, in direct or indirect competition to RTI, including without
limitation the solicitation of RTI's customers or suppliers.
(c)(i) RamKo agrees that all processes, technologies and inventions
("Inventions"), including new contributions, improvements, ideas and
discoveries, whether patentable or not, conceived, developed, invented or made
during its engagement by RTI shall belong to RTI, provided that such Inventions
grew out of RamKo's consulting work with RTI, are related in any manner to the
business operations of RTI or are conceived or made with the use of RTI's
facilities or materials. RamKo shall further:
(1) promptly disclose such Inventions to RTI;
(2) assign to RTI, without additional compensation, all patent and
other rights to such Inventions;
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(3) sign all papers necessary to carry out the foregoing; and
(4) give testimony in support of its inventorship;
(c)(ii) If any Invention is described in a patent application or is
disclosed to third parties, directly or indirectly, by RamKo within two years
after the termination of this Agreement, it is to be presumed that the Invention
was conceived or made during the period of RamKo's engagement by RTI; and
(c)(iii) RamKo agrees that it will not assert any rights to any Invention
as having been made or acquired by it prior to the date of this Agreement,
except for Inventions, if any, disclosed to RTI in writing prior to the date
hereof.
(d) RTI shall be the sole owners of all products and proceeds of RamKo's
services hereunder, including, but not limited to, all materials, ideas,
concepts, formats, suggestions, developments, arrangements, packages, programs
and other intellectual properties (all of which shall be deemed works made for
hire) that RamKo may acquire, obtain, develop or create in connection with and
during the term of RamKo's engagement hereunder, free and clear of any claims by
RamKo (or anyone claiming under RamKo) of any kind or character whatsoever
(other than RamKo's right to receive payments hereunder). RamKo shall, at the
request of RTI, execute such assignments, certificates or other instruments as
RTI may from time to time deem necessary or desirable to evidence, establish,
maintain, perfect, protect, enforce or defend its right, or title and interest
in or to any such properties.
6. Defense and Indemnity.
(a) In addition to and not in limitation of any other rights to
indemnification which may be provided to RamKo or its employees or
representatives (the "RamKo Group") in RTI's Articles of Incorporation, By-Laws
or otherwise, RTI agrees in the manner hereinafter set forth to indemnify and
defend against any claims or proceedings brought or actions filed against any of
the RamKo Group by any third party other than RTI, because of its engagement
hereunder, or in any way connected with or arising out of its business
relationship with the Operating Companies (defined as RTI or any other direct or
indirect subsidiary, parent of affiliate of RTI). Notwithstanding the foregoing,
RTI shall not be required to indemnify the RamKo Group against, and RamKo shall
be required to repay to RTI, payments made for all expenses including reasonable
attorney fees and costs if it is determined by a court of competent jurisdiction
or the arbitrator, as provided in Section 10 hereof, that the underlying claim
or matter to which such indemnification relates:
(i) is a claim or matter to which RamKo is not entitled to
indemnification under the law; or
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(ii) arises out of, or is a result of, the gross negligence or willful
misconduct of RamKo (or its employees, agents, officers and
representatives).
In the event that it shall be determined that RTI is to be repaid pursuant
hereto, then RamKo shall also pay or reimburse RTI for its reasonable attorneys'
fees and share of court and/or arbitration costs incurred in connection with any
court proceeding or arbitration.
(b) The obligations and liabilities of RTI hereunder with respect to claims
resulting from the assertion of liability of RamKo shall be subject to the
following terms and conditions:
(i) The giving of prompt notice by RamKo to RTI of any claim which
might give rise to a claim by RamKo based on the agreements contained in
this Section, stating the nature and basis of said claims and the amounts
thereof, to the extent known.
(ii) In the event any such action, suit or proceeding is brought
against RamKo, with respect to which RTI may have liability under this
Agreement, the action, suit or proceeding shall be defended (including all
proceedings on appeal or for review) by RTI and its legal counsel. RamKo
shall have the right to appoint counsel of its selection and RTI shall pay
the reasonable fees and expenses actually billed to RamKo within 30 days of
presentment of the invoice from counsel for RamKo.
(c) Neither RTI nor RamKo shall make any settlement of any claims without
the written consent of the other party, which consent shall not be unreasonably
withheld or delayed.
(d) Except as herein expressly provided, the remedies provided in this
Section shall be cumulative and shall not preclude assertion by any party of any
other rights or the seeking of any other rights or remedies against any other
party hereto.
7. Restriction.
(a) RamKo shall during the term of this Agreement be deemed to be an
independent contractor. Nothing contained in this Agreement shall constitute or
be deemed to create any relationship between RTI and RamKo other than the
relationship of independent contractor. Except as expressly provided herein,
RamKo shall have no right or authority, express or implied, to make any
representations, warranties or agreements or to act as agent of, or to assume or
create any obligations on behalf of, or in the name of, or to bind, RTI.
(b) RamKo and its directors, shareholders, agents, officers and employees
shall be permitted to engage in any business and perform services for its or
their own accounts provided that such business and services shall not be in
competition with, or be
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for a company that is in competition with, RTI or its affiliates or
subsidiaries.
8. Additional Services.
(a) Should the Consulting Services be rendered for a period greater than
twenty five (25) business days in any calendar quarter (the "Additional
Services"), RTI shall pay RamKo an additional Two Thousand Five Hundred Dollars
($2500.00) for each day of such additional Consulting Services, provided that no
Additional Services shall be rendered prior to RamKo notifying RTI in writing
that the initial twenty five (25) day period of Consulting Services has or is
about to expire and RTI shall provide to RamKo written authorization to render a
fixed number of days of Additional Services. Prior to rendering any Additional
Services in excess of the number of days authorized in accordance with the
provisions of this Section, the notification and authorization procedures set
forth above shall be repeated.
(b) Any service, other than the Consulting Services, including but not
limited to investment banking services performed by RamKo for RTI, are not
covered by, nor subject to the terms and provisions of this Agreement, and
compensation for and the conditions for the performance of such services are or
shall be the subject of separate agreements mutually agreeable to the parties
thereto.
9. Quarterly Service Report. RamKo shall provide to RTI prior to ten (10)
days after the end of each calendar quarter, commencing September 30, 1997, the
number of business days that Consulting Services were performed during the
immediately preceding calendar quarter.
10. Arbitration. If there shall occur a dispute between RTI and RamKo over
the terms of this Agreement which dispute is not amicably settled by the
parties, then the RTI and RamKo agree to submit any and all such disputed issues
by arbitration in accordance with the then existing commercial arbitration rules
of the American Arbitration Association ("AAA") in New York. RTI and RamKo shall
jointly appoint one person to act as the arbitrator. In the event RTI and RamKo
cannot agree to an arbitrator within thirty (30) days, the arbitrator shall be
chosen by the appropriate mechanism, as set forth in the official AAA rules, to
appoint a single arbitrator in the event of a deadlock among parties to the
arbitration. The decision of the arbitrator shall be binding upon the parties.
The costs of the arbitration, including the fees and expenses of the arbitrator,
shall be borne fifty percent (50%) by RTI, on the one hand, and fifty percent
(50%) by RamKo, on the other, but each party shall pay its own attorneys' fees;
provided, however, that if the arbitrator shall (i) rule for RamKo and not
otherwise rule as to costs, fees and expenses, RTI shall pay or reimburse
RamKo's reasonable attorneys' fees and RamKo's share of the arbitration costs
incurred in connection with such arbitration
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and (ii) rule for RTI and not otherwise rule as to costs, fees and expenses,
RamKo shall pay or reimburse RTI's reasonable attorneys' fees and RTI's share of
the arbitration costs incurred in connection with such arbitration.
11. Injunctive Relief. The parties hereto agree that: (a) both parties
would be irreparably injured in the event of a material breach by either party
of its obligations under this Agreement and
(b) monetary damages would not be an adequate remedy for any such breach.
Either party shall at its sole option be entitled to injunctive relief in
addition to any other remedy which it may have in the event of any such breach.
Accordingly, in the event of a threatened or actual breach of the
provisions of this Agreement, either party hereto in addition to any other
remedies which they may have, shall be entitled to seek temporary injunctive
relief in state or federal court, pending the commencement of any arbitration
which may be commenced in accordance with Section 10 of this Agreement.
12. Effect of Waiver. The waiver by either party of a breach of any
provision of this Agreement shall not operate as or be construed as a waiver of
any subsequent breach thereof.
13. Notices. All notices given to a party in connection with this Agreement
shall be in writing and shall be deemed to have been properly delivered (a) on
the date actually received, if by U.S. mail, and (b) on the date sent, if
delivered either by hand, telefax or reputable express courier service. All such
notices shall be addressed either as follows or in such other manner as a party
may subsequently designate in writing:
If to RTI:
RT INDUSTRIES, INC.
d/b/a US Automotive Manufacturing, Inc.
Xxxxx 000, Xxxxxxx Xxxxx
Xxxx Xxxxxx Xxx 0000
Xxxxxxxxxxxx, Xxxxxxxx 00000
Attn: President
Telefax: ___________________
- and -
Frankfurt, Xxxxxx, Xxxxx & Xxxx
Attn: Xxxx X. Xxxxxxxxx, Esquire
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telefax: ___________________
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If to RamKo
RamKo Venture Management, Inc.
Attn: Xxxx X. Xxxxx, President
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telefax: (000) 000-0000
14. Applicable Law. This Agreement shall be interpreted and enforced in
accordance with the laws of the State of New York, without regard to any
conflicts of law provisions thereof to the contrary.
15. Assignment. The rights, benefits and obligations of RTI and RamKo under
this Agreement shall not be assignable or transferable. Notwithstanding anything
herein, the Consulting Services to be provided under this Agreement shall be
performed by Xxxx X. Xxxxx, President of RamKo Venture Management, Inc., or any
other individual authorized by him and reasonably satisfactory to RTI.
16. Prior Agreements. All prior agreements (but not contemporaneous
agreements), whether written or oral, among the parties hereto with respect to
the subject matter of this Agreement have been integrated into, and are
superseded by, the provisions of this Agreement and the other agreements and
instruments executed on even date herewith and in connection herewith.
17. Modification. This Agreement shall not be modified by the parties
unless, and then only to the extent that, a written modification is executed by
all of the parties.
18. Severable Provisions. All provisions in this Agreement are severable
and each valid and enforceable provision shall remain in effect and shall be
binding upon the parties, notwithstanding any determination binding upon the
parties hereto that other provisions of this Agreement are invalid or
unenforceable.
19. Binding Effect. This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto.
20. Terms of Convenience. Captions and headings are used in this Agreement
for convenience only and shall not be construed to affect the meaning of this
Agreement. Terms such as "hereof", "herein", "hereto", "hereby", "hereunder" and
similar references shall be deemed to refer to this Agreement in its entirety
and not to any particular provisions of this Agreement.
21. Payment of Expenses. Except as otherwise provided in this Agreement,
RTI agrees to pay for and hold RamKo harmless for all reasonable out-of-pocket
costs and expenses of RamKo (including, without limitation, the reasonable fees
and out-of-
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pocket expenses of all counsel retained by RamKo) arising in connection with the
entering into, administration (including without limitation, any waiver,
amendment or modification) or enforcement of , or preservation of rights under,
this Agreement and any of the documents contemplated hereby. RamKo hereby agrees
that the legal fees and out-of-pocket expenses of counsel retained by RamKo in
connection with the entering into preparation and execution of this Agreement
shall not exceed Five Hundred Dollars ($500.00).
22. Counterparts. This Agreement may be executed in counterparts, and any
executed counterparts shall be binding upon the parties and inure to their
benefit as though all parties were signatory to the same counterpart.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
RT INDUSTRIES, INC.
a Delaware corporation
By: /S/ XXXX X. XXXXXX
------------------
Xxxx X. Xxxxxx, President
RAMKO VENTURE MANAGEMENT, INC.
a New York corporation
By: /s/ XXXX X. XXXXX
------------------
Xxxx X. Xxxxx, President
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