CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (the "Agreement") is made as of the 28th day
of May, 1999, by and between The Majestic Companies, Ltd., a Delaware
corporation (the "Company"), and Venture Consultants, LLC, a Maryland limited
liability company (the "Consultant").
RECITALS
A. The Company wishes to obtain the services of Consultant as a
consultant to the Company and Consultant desires to render such services to the
Company, all upon the terms and conditions set forth in this Agreement;
B. In order to retain the Consultant, the Company and the Consultant
wish to execute and enter into this Agreement;
NOW THEREFORE, in consideration of mutual covenants herein contained,
and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereby agree as follows:
1. Engagement of Consultant.
The Company hereby engages the Consultant as a consultant and advisor
with respect to the matters specified in Section 3 hereof under the terms and
conditions set forth in this Agreement. The Consultant hereby accepts such
engagement as a consultant to the Company upon the terms and conditions set
forth in this Agreement
2. Term.
Unless sooner terminated or extended as provided for in this Agreement,
the term of engagement of the Consultant by the Company under this Agreement
shall be for an initial term of one (1) year. Thereafter, the engagement of the
Consultant under this Agreement shall renew automatically from year to year.
However, either party may terminate such engagement at any time during the term
of this Agreement upon thirty (30) days or more prior written notice to the
other party.
3. Consulting Services.
3.1. The Consultant shall assist and advise the Company in its
marketing efforts and in the formation of strategic relationships, the
introduction of the Company to individual and institutional investors and the
implementation of a shareholder relationship plan During the term of the
consulting engagement under this Agreement, the Consultant shall use the best
efforts of the Consultant to further the operations of the Company and, in this
regard the Consultant shall be reasonably available, at such times and places as
reasonably requested by the
Company and agreed to by the Consultant to meet with, assist, advise and
otherwise work with and for the Company and its responsible personnel with
regard to: (i) advice on the proper and efficient conduct of the business of the
Company; (ii) future business activities of the Company as to which the
Consultant may have or acquire knowledge; (iii) the development of business
opportunities and (iv) any other matters which the parties may hereafter
reasonably agree upon. It is specifically understood that the Consultant has
complete discretion and control as to how the duties of the Consultant under
this Agreement shall be discharged. The Consultant shall be under the
supervision of and shall report to the President and Chief Executive Officer of
the Company.
3.2. During the term of this Agreement, the Consultant shall
serve the Company faithfully and to the best of the Consultant's ability, and
shall devote such time, attention, skill and efforts to the performance of the
duties required by or appropriate to the engagement of the Consultant as the
Consultant deems necessary or advisable.
3.3. The Company agrees that the Consultant's undertaking
herein shall be on a "best efforts" basis and the Company is satisfied, after
completing its due diligence, that the Consultant has the experience and ability
to perform the services to be performed under this Agreement. However, the
Company acknowledges that the Consultant does not guarantee that the
Consultant's efforts will have any impact on the Company's business or that any
financial improvement will result from the Consultant's efforts.
3.4. The Company understands that the Consultant is currently
providing services, which may be substantially similar in nature to the services
being rendered to the Company, to other individuals or entities, and the Company
agrees that the Consultant is not prevented or barred from rendering such
services of the same nature or of a similar nature to any other individual or
entity. In addition, the Consultant understands and agrees that the Company
shall not be prevented or barred from retaining other persons or entities to
provide services of the same or similar nature as those provided by the
Consultant.
4. Compensation
4.1. In consideration of the services to be rendered by the
Consultant hereunder the Company shall pay to the Consultant, and the Consultant
agrees to accept, as full compensation for such services, consulting fees of (i)
upon the execution of this Agreement, warrants to purchase one hundred thousand
(100,000) shares of the common stock of the Company at an exercise price of
Fifty Cents ($.50), exercisable on a cash or cashless basis, for a period of
three (3) years from the date of issuance thereof, (ii) for each month of the
consulting engagement hereunder, additional warrants to purchase ten thousand
(10,000) shares of common stock of the Company, on the same terms as set forth
above, (iii) upon the placement of any debt or equity offering arising from the
efforts of the Consultant, whether during or after the term of engagement of the
Consultant under this Agreement, a commission of six percent (6%) of the
principal amount of such offering payable in cash upon closing of such
transaction, and (iv) upon a closing by the Company, as a result of the efforts
of the Consultant, of either a relationship with an investment banking firm or
the implementation
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and funding of a financial services operation, warrants for thirty thousand
(30,000) shares of the common stock of the Company for each such transaction on
the same terms as set forth above. The initial monthly payment of compensation
due under this Agreement has been paid by the Company to the Consultant prior to
the execution of this Agreement.
4.2. All third party and out of pocket expenses that the
Consultant shall incur on behalf of the Company in performing services under
this Agreement will be the responsibility of the Company and will be paid or
reimbursed upon the presentation of appropriate receipts or other requisite tax
documentation. Any single expense item which exceeds One Thousand Dollars
($1,000.00) must be approved in advance by the Company. In addition to specific
reimbursable expenses, the Company shall pay to the Consultant, on the first day
of each month a monthly non-allocated expense reimbursement to defray indirect
expenses in the sum of Five Hundred Dollars ($500.00) per month.
4.3. The Consultant shall not be nor be deemed to be an
employee of the Company and shall not be eligible to participate in any fringe
benefit programs adopted by the Company from time to time.
4.4. The Consultant shall be responsible and liable for the
payment of any and all federal, state and local taxes payable by reason of the
Consultant's receipt of compensation under this Agreement and for any and all
taxes, contributions or other sums payable for unemployment compensation
insurance and old age retirement benefits. The Consultant agrees to indemnify
and hold harmless the Company from and against any and all liabilities,
obligations, costs and expenses, including attorneys' fees, resulting from any
claim asserted against the Company with respect to the withholding, reporting or
payment of employment or income taxes in connection with compensation or amounts
payable to the Consultant under this Agreement.
4.5. The Consultant shall not be entitled to participate in or
receive any fringe or retirement benefits, including medical, dental, life
insurance, disability insurance or retirement benefits, which the Company may
provide to its employees from time to time.
4.6. The Consultant shall be responsible for providing
worker's compensation and liability insurance coverages for the Consultant and
any agents or employees retained by the Consultant and shall be responsible for
any and all claims, damages and suits resulting from the negligence or improper
performance of obligations by the Consultant or any agents or employees of the
Consultant.
5, Relationship of Parties.
The Company and the Consultant acknowledge and agree that the
relationship between them shall be that of principal and independent contractor
and this Agreement shall be so construed for all purposes. The Consultant shall
have the right to determine the manner in which the consulting services provided
for herein shall be performed. The Company expressly retains the right to
approve, in its sole discretion, each and every transaction on which the
Consultant
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shall render consulting services that involves the Company as a party to any
agreement. The Consultant and the Company mutually agree that the Consultant is
not authorized to enter into any agreements on behalf of the Company.
6. Termination.
6.1. The Consultant's engagement hereunder may be terminated
immediately by the Company for Cause upon written notice to the Consultant. The
term "for Cause" for the purposes of this Agreement shall mean any (1) breach or
violation of the terms and conditions of this Agreement by the Consultant which
is not cured within fifteen (15) days after notice from the Company thereof; (2)
willful disregard of or failure to perform duties or obligations under this
Agreement; (3) dishonesty; (4) selling, passing, or otherwise using without
permission any confidential information of the Company; (5) action or engagement
in competition of the Company; or (6) the death of the Consultant.
6.2. The Consultant's engagement hereunder may be terminated
by the Consultant for breach by the Company of any material provision of this
Agreement Following written notice thereof by the Consultant to the Company and
the failure to cease such breach within a period of fifteen (15) days, following
such written notice.
6.3. Either party may terminate the Consultant's engagement
under this Agreement by providing the other with written notice of termination
pursuant to Section 2 above.
7. Non-Disclosure of Confidential Information.
7.1. The Consultant acknowledges that it is the policy of the
Company to maintain as secret and confidential all Confidential Information as
hereinafter defined. "Confidential Information" shall mean any information, not
generally known in the Company's industry, heretofore or hereafter acquired,
discovered, developed, conceived, originated, used or prepared by the Company or
by an employee of the Company as the result of employment with the Company and
which falls within the following categories:
(i) information relating to trade secrets of the
Company or any supplier, customer, distributor, independent representative or
consultant of the Company;
(ii) information relating to existing or contemplated
products, services, technology, designs, processes, manuals, formulas, computer
systems and/or software, and any research or development of the Company or any
supplier or customer of the Company;
(iii) information relating to financial statements,
business plans, sales or marketing methods, methods of doing business,
distributor or independent representative lists or information, customer lists,
customer usages and/or requirements, and supplier or customer information of the
Company or any supplier or customer of the Company;
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(iv) information relating to work products of the
Company in general; and
(v) any other Confidential Information that either
the Company or any supplier, distributor, independent representative or
consultant customer of the Company may wish to protect by patent, copyright or
by keeping it secret and confidential.
7.2. The Consultant recognizes that the services to be
performed by the Consultant are special and unique, and that by reason of such
services, the Consultant will acquire Confidential Information. The Consultant
recognizes that all such Confidential Information is the property of the
Company. In consideration of the Company's entering into this Agreement, the
Consultant agrees that:
(i) the Consultant shall never, during the term of
engagement or thereafter, directly or indirectly, use, publish, disseminate or
otherwise disclose any Confidential Information obtained in connection with the
Consultant's engagement by the Company without the prior written consent of the
Company; and
(ii) during the term of engagement by the Company,
the Consultant shall exercise all due and diligent precautions to protect the
integrity of the Company's Confidential Information and, upon termination of
such engagement, the Consultant shall return all documents containing any
Confidential Information and any copies thereof, in the possession or control of
the Consultant.
7.3. Upon termination or expiration of this Agreement, the
Consultant shall immediately deliver to the Company all books, records,
memoranda, reports, software data and documents relating to the Company's
business, suppliers, customers and other assets of the Company in the
possession, custody or under the control of the Consultant, whether or not such
material contains Confidential Information.
7.4. The Consultant agrees that the provisions of this Section
7 are reasonably necessary to protect the proprietary rights of the Company in
Confidential Information and its trade secrets, goodwill and reputation. The
provisions of this Section 7 shall survive any termination of this Agreement.
8. Representations and Warranties of the Consultant. The Consultant
hereby represents and warrants the following to the Company:
8.1. The Consultant is able in all respects to execute and
perform this Agreement, and the execution and performance hereof does not
constitute a breach or default under any other agreement, contract or
arrangement which is binding upon the Consultant.
8.2. The Consultant is entering into this Agreement in good
faith, is free to execute this Agreement and to enter into the engagement
pursuant to the provisions hereof.
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9. Representations and Warranties of the Company. The Company
represents and warrants to the Consultant, each such representation and warranty
being deemed to be material, that:
(a) The Company will cooperate fully and timely with the
Consultant to enable the Consultant to perform the obligations of the Consultant
under this Agreement;
(b) The execution and performance of this Agreement by the
Company has been duly authorized by the Board of Directors of the Company in
accordance with applicable law;
(c) The performance by the Company of this Agreement will not
violate any applicable court decree, law or regulation nor will it violate any
provision of the organizational documents of the Company or any contractual
obligation by which the Company may be bound;
(d) Because the Consultant will rely upon information being
supplied by the Company, all such information shall be true, accurate, complete
and not misleading, in all material respects;
(e) Any warrants or shares issued to the Consultant under this
agreement, when issued, will be duly and validly issued, fully paid and
non-assessable with no personal liability to the ownership thereof; and
(f) The Company will act diligently and promptly in reviewing
materials submitted to it by the Consultant to enhance timely distribution of
such materials and will inform the Consultant of any inaccuracies contained
therein prior to dissemination.
10. Notices.
Any notice, request, instruction or other document to be given under
this Agreement to any party hereunder shall be in writing and delivered
personally, by overnight courier delivery service or by certified mail, postage
prepaid, to the following addresses:
If to the Company:
The Majestic Companies, Ltd.
0000 Xxx Xxx Xxxxx Xxxxx
0xx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxx, President and Chief Executive Officer
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If to the Consultant:
Venture Consultants, LLC
0000 Xxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Attention: D. Xxxxxxx Xxxx, Managing Director
or to such other addresses as a party hereto may hereafter designate in writing
to the other party and shall be deemed delivered as of the date of hand
delivery, as of the date following delivery to an overnight courier delivery
service or as of three (3) days following mailing by certified mail.
11. Benefit and Assignment.
This Agreement shall be binding upon and shall inure to the benefit of
the Company and the Consultant and their respective heirs, legal
representatives, successors and assigns, provided, that, neither the Consultant
or the Company may make any assignments of this Agreement or any interest
herein, by operation of law or otherwise, without the prior written consent of
the other party hereto.
12. Amendment and Entire Agreement.
This Agreement cannot be modified or changed except by an instrument in
writing, signed by both parties to the Agreement. This Agreement contains the
entire understanding between the Company and Consultant with respect to the
matters referenced herein.
13. Severability.
In the event of invalidity or unenforceability of any one or more
provisions of this Agreement, such invalidity or unenforceability shall not
affect the validity or enforceability of the other provisions hereof and such
other provisions shall be deemed to remain in full force and effect.
14. Governing Law.
This Agreement shall be construed and governed in accordance with the
laws of the State of Maryland.
15. Consent to Suit.
Any legal proceeding arising out of or relating to this Agreement shall
be instituted in the United States District Court for the District of Maryland,
or if such court does not have jurisdiction or will not accept jurisdiction, in
any court of general jurisdiction in the State of Maryland, and the Consultant
hereby consents to the personal and exclusive jurisdiction of such court and
hereby waives any objection that the Consultant may have as to the venue of any
such
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proceeding and any claim or defense of inconvenient forum.
16. Disputes.
16.1. All claims, disputes, controversies, differences or
misunderstandings between the parties arising out of; or by virtue of this
Agreement or the interpretation of this Agreement, including the determination
of "for Cause" under Section 6 hereof which cannot be settled or resolved by the
parties hereto will be settled or determined by arbitration by a panel of three
arbitrators as herein provided. When a party wishes to submit a question or an
issue to arbitration it will serve a notice upon the other party, setting forth
the matter or matters to be arbitrated and the name and address of its
arbitrator and within thirty (30) business days thereafter the other party will
name its arbitrator and give written notice to the other party originally
invoking arbitration of his name and address. Within ten (10) business days
thereafter a third arbitrator will be appointed by the two arbitrators so
selected.
16.2. If the party upon whom notice is served should fail to
appoint an arbitrator within the time provided, or if the two arbitrators named
in accordance with Section 16.1 of this Section should not agree upon a third
arbitrator, such second or third arbitrator (or both) shall be appointed by the
American Arbitration Association in Washington, D.C.
16.3. Unless all the arbitrators otherwise agree, an
arbitration under this Agreement will be conducted in Baltimore, Maryland under
the rules and regulations of the American Arbitration Association not in
conflict with the provisions of this Section.
16.4. The parties will abide by and perform in accordance with
the decisions, awards or orders of the arbitrators selected at any time, or from
time to time pursuant to the provisions of this Section, and the arbitrators
may, and are empowered to, grant or direct injunctive relief as well as monetary
damages. A judgment of any court having jurisdiction of the parties may be
entered upon the decision, award or order of arbitrators under or pursuant to
the provisions of this Agreement.
17. Waiver of Breach.
The waiver by either party hereto of a breach of any provisions of this
Agreement shall not operate or be construed as a waiver of any subsequent breach
by either party.
18. Execution in Counterparts.
This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, but all of which together constitute
one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the date noted below and to be in effect from and after May 28,
1999, in accordance with the terms set forth in this Agreement.
WITNESS:
The Company:
THE MAJESTIC COMPANIES, LTD.
/s/ Xxxxxxx Xxxxx By: /s/ Xxxxxxx X. Xxxxxxxxx (SEAL)
--------------------- ----------------------------------------
President and Chief Executive Officer
Date: 6/3/99
------------
The Consultant:
VENTURE CONSULTANTS, LLC
/s/ Xxxx Xxxxxx By: /s/ D. Xxxxxxx Xxxx (SEAL)
--------------------- ----------------------------------------
Managing Director
Date: 5-28-99
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