CONSULTING AGREEMENT
Agreement made and entered into as of the 9th day of December, 1996, by and
between Computer Marketplace, Inc., a Delaware corporation having offices at
0000 Xxxxxxxx Xxxxxx, Xxxxxx, XX 00000 (the "Company"), and Victoria Holdings,
Inc., a Delaware corporation and an affiliate of Biltmore Securities, Inc., a
Florida corporation having offices at 0000 Xxxxx Xxxxxxx Xxxxxx, Xxxx
Xxxxxxxxxx, Xxxxxxx 00000 (the "Consultant").
W I T N E S S E T H:
WHEREAS, the Company desires to secure the services of the Consultant to
provide assistance with respect to corporate finance and evaluations of possible
business partners, and the Consultant desires to provide such services to the
Company, subject to and in accordance with the terms and conditions hereinafter
set forth.
NOW THEREFORE, in consideration of the foregoing and the mutual promises
and covenants herein contained, it is hereby agreed as follows:
1. Retention.
The Company hereby retains the Consultant and the Consultant hereby
accepts such retention by Company, for the period and upon the terms and
conditions set forth in this Agreement.
1. Duties.
(a) The Consultant shall serve the Company generally as a consultant to
assist the Company with regard to corporate finance, evaluations of possible
business partners and such other matters relating to the Company as may be
requested by the Company from time to time. The Consultant will seek to find
business partners suitable for the Company and assist in the structuring,
negotiating and financing of such transactions.
(b) Throughout the Term (as hereinafter defined in Paragraph 3), the
Consultant shall devote its best efforts to the performance of its duties
hereunder in a manner which will faithfully and
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diligently further the business interests of the Company. It is anticipated that
over the Term the Consultant will devote such time to the performance of its
duties hereunder as is reasonably requested by the Company from time to time.
1. Term.
This Agreement shall be in effect for a term (the "Term") of three (3)
years commencing as of the date hereof and terminating on the third anniversary
of such date. Thereafter, this Agreement may be extended by mutual agreement of
the parties.
1. Compensation.
(a) Future Services. As compensation for services to be rendered by the
Consultant during the Term, the Company is issuing simultaneously with the
execution and delivery of this Agreement options (the "Options") to purchase
6,000,000 shares (or 1,000,000 shares of Common Stock following the 1-for- 6
reverse stock split proposed by the Company) (the "Options Shares") of the
Company's common stock, par value $.0001 per share (the "Common Stock"), for an
exercise price of $.167 per share (or $1.00 per share after giving effect to the
proposed 1-for-6 reverse stock split). The Options will be exercisable for a
period commencing upon the consummation by the Company and/or its affiliates of
a financing providing gross proceeds to the Company of approximately $1,000,000
(the "Financing") and terminating on the fifth anniversary of the date hereof;
provided, that if the Financing has not occurred by January 27, 1997, the
Options shall terminate. The Options will be issued pursuant to an option
agreement substantially in the form annexed hereto as Exhibit A.
(b) Corporate Finance Transactions. In the event that during the Term the
Company consummates (i) the acquisition of one or more businesses introduced to
the Company by the Consultant which in the aggregate have net assets of not less
than $2,500,000 or (ii) the divestiture of assets outside the ordinary course of
business, or the sale of a majority of the Company's capital
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stock outside the ordinary course of business, by merger or otherwise, to a
purchaser introduced to the Company by the Consultant resulting in net proceeds
to the Company of not less than $2,000,000 in cash or stock (collectively, an
"Introduced Acquisition"), then the Consultant shall be entitled to receive
1,000,000 shares of Common Stock simultaneously with the closing of such
transaction (the "Shares"), such number of shares shall be subject to customary
anti-dilution protection in the event of stock splits or other reclassification
or reorganization.
(c) Registration of Options Shares and Shares. The Company agrees to grant
registration rights to the Consultant with respect to the Options Shares and
Shares in accordance with the registration rights provisions attached as Exhibit
B to this Agreement which are incorporated herein and made a part hereof.
5. Reimbursement for Out-of-Pocket Expenses. The Company shall reimburse the
Consultant for all reasonable expenses incurred during the Term which are
directly related to the performance of its services hereunder, provided that
such expenses have been previously authorized in writing by an executive officer
of the Company. The Consultant shall be reimbursed at such times and with such
frequency as is the custom of the Company with regard to reimbursement of
employees for expenses. For such purposes, the Consultant shall submit to the
Company periodic reports of such expenses, including a statement of the related
services performed by the Consultant to which such expenses relate.
6. Authority to Bind the Company. Nothing herein shall imply that the Consultant
is either an employee or agent of the Company, except to such an extent as might
be agreed upon in writing for a specified purpose. Except as expressly agreed,
the Consultant shall not have the authority to obligate or commit the Company in
any manner whatsoever.
7. Company Property. All advertising, sales, marketing and other materials or
articles or information, including without limitation data processing reports,
sales analyses, invoices, price lists
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or information, or any other materials or data of any kind furnished to the
Consultant by the Company or developed by the Consultant for the Company at the
Company's direction or for the Company's use or otherwise in connection with the
Consultant's services hereunder, are and shall remain the sole and confidential
property of the Company; if the Company requests the return of such materials at
any time during or after the Term, the Consultant shall immediately deliver the
same to Company.
8. Non-Competition, Trade Secrets.
(a) During the Term and as long as this Agreement is in effect and for a
period of two (2) years thereafter, the Consultant shall not directly or
indirectly induce or attempt to influence any employee of the Company to
terminate his employment with the Company or solicit or divert any business or
customer or supplier from the Company.
(b) During the Term and at all times thereafter, the Consultant shall not
use for its benefit, or disclose, communicate or divulge to, or use for the
direct or indirect benefit of any person, firm, association or company other
than the Company, any material referred to in Paragraph 7 above or any
information regarding the business methods, business policies, procedures,
techniques, trade secrets, or other knowledge or processes of or developed by
the Company or any names and addresses of the Company's customers or clients or
any data on or relating to past, present or prospective customers or clients of
the Company or any other confidential information relating to or dealing with
the business operations or activities of the Company, made known to the
Consultant or learned or acquired by the Consultant while retained by the
Company, provided that this provision shall not be construed to restrict the use
or disclosure of any information which (i) is generally publicly known at the
time of its disclosure to, or use by, the Consultant or (ii) is lawfully
received by the Consultant from a third party not bound in a confidential
relationship to the Company or any subsidiary or affiliate thereof..
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(c) Any and all writings, inventions, improvements, processes, procedures
and/or techniques which the Consultant may make, conceive, discover or develop,
either solely or jointly with any person or person, at any time during the Term,
whether during working hours or at any other time and whether at the request or
upon the suggestion of the Company or otherwise, which relate to or are useful
in connection with any business now or hereafter carried on including
developments or expansions of its present fields of operations, shall be the
sole and exclusive property of the Company. The Consultant shall promptly make
full disclosure to the Company of all such writings, inventions, improvements,
processes, procedures and techniques and otherwise aid and assist the Company so
that the Company can prepare and present applications for copyright or letters
of patents therefor, can secure such copyright or letters of patent wherever
possible, as well as reissues, renewals, and extension thereof, and can obtain
the record title to such copyright or patents so that the Company shall be the
sole and absolute owner thereof in all countries in which it may desire to have
copyright or patent protection. The Consultant shall not be entitled to any
additional or special compensation or reimbursement regarding any and all such
writings, inventions, improvements, processes, procedures and techniques.
(d) The Consultant acknowledges that the restrictions contained in the
foregoing subparagraphs (a), (b) and (c), in view of the nature of the business
in which the Company is engaged, are reasonable and necessary in order to
protect the legitimate interests of the Company and that any violation thereof
would result in irreparable injuries to the Company, and the Consultant
therefore acknowledges that, in the event of its violation of any of these
restrictions, the Company shall be entitled to obtain from any court of
competent jurisdiction preliminary and permanent injunctive relief as well as
damages and an equitable accounting of all earnings, profits and other benefits
arising from such violation, which rights shall be cumulative and in addition to
any other rights or remedies to which the Company may be entitled.
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(e) If the period of time or the area specified in subparagraph (a) above
should be adjudged unreasonable in any proceeding, then the period of time shall
be reduced by such number of months or the area shall be reduced by the
elimination of such portion thereof or both so that such restrictions may be
enforced in such areas and for such time as adjudged to be reasonable. If the
Consultant violates any of the restrictions contained in the foregoing
subparagraph (a), the restrictive period shall not run in favor of the
Consultant from the time of the commencement of any such violation until such
time as such violation shall be cured by the Consultant to the satisfaction of
the Company.
9. Indulgences. Neither the failure nor any delay on the part of either party to
exercise any right, remedy, power or privilege under this Agreement shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, remedy, power or privilege preclude any other or further exercise of the
same or of any other right, remedy, power or privilege with respect to any
occurrence. No waiver shall be effective unless it is in writing and is signed
by the party asserted to have granted such waiver.
10. Assignment. Neither party may assign its rights or obligations under the
Agreement without the written consent of the other party.
11. Termination. Either party may, upon 30 days prior written notice to the
other, terminate this Agreement; provided however, that in the event that the
Company consummates an Introduced Acquisition within eighteen (18) months
following termination, then the Consultant shall be entitled to receive the
Shares.
12. Notice. All notices, requests, demands and other communications required or
permitted under this Agreement will be in writing and will be deemed to have
been duly given, made and received when personally delivered, three (3) days
after deposited in the United States mails, certified mail
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return receipt requested, or one (1) day after sent by a reputable overnight
courier service, addressed as set forth below:
(i) If to the Company:
Computer Marketplace, Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attn:Xxxxx Xxxxx, President
(ii) If to the Consultant:
Victoria Holdings, Inc.
c/o Biltmore Securities, Inc.
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxx Xxxxxxxxxx, XX 00000
Attn: Xxxxxx Xxxxxxxxxxx, President
13. Controlling Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida, notwithstanding any
conflict-of-law doctrine of such state or jurisdiction to the contrary.
14. Entire Agreement. This Agreement contains the entire agreement between the
parties, may not be altered or modified, except in a writing signed by the party
to be charged thereby, and supersedes any and all previous agreements between
the parties.
15. Execution and Counterparts. This Agreement may be executed by the parties in
separate counterparts, each of which when so executed and delivered will be
deemed to be an original and all of which taken together will be considered one
and the same Agreement.
16. Arbitration. Any dispute, controversy or claim arising out of or in
connection with this Settlement Agreement shall be determined and settled by
arbitration in the County of Broward, State of Florida conducted by the American
Arbitration Association in accordance with its then existing rules, regulations,
practices and procedures. The arbitration proceedings shall be conducted before
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a single neutral arbitrator selected by the Association in accordance with its
then existing rules, regulations, practices and procedures. Any decision
rendered by the arbitrator shall be final, conclusive and binding upon the
parties to the arbitration and may be enforced by the judgement and order of the
court of proper jurisdiction in the State of Florida for Broward County and the
parties hereto hereby waive any objection to such jurisdiction or venue in any
such proceeding commenced in such court. In any proceeding between the parties
hereto arising out of or in connection with this Agreement, the prevailing party
shall be entitled to recover its reasonable legal fees and expenses from the
losing party.
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
on the date first above written.
COMPUTER MARKETPLACE, INC.
By: /s/ L. Xxxxx Xxxxx
--------------------------
Name: L. Xxxxx Xxxxx
Title: President and
Chief Executive Officer
VICTORIA HLDINGS, INC.
By: /s/ Xxxxxx Xxxxxxxxxxx
---------------------------
Name: Xxxxxx Xxxxxxxxxxx
Title: President
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