EXHIBIT 10.4
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT, effective the 10th day of February, 2003, is
entered into by and between Steinbrun, Xxxxxx and Associates dba The Steinbrun
Group (SHA), a California corporation with its principal place of business
located in Santa Monica, California, and Overhill Farms, (Company) a Nevada
Corporation having its principal place of business in Vernon, California.
WHEREAS, the Company is desirous of engaging SHA to provide business
consulting services; and
WHEREAS, SHA is in the business of providing consulting services on the
terms set forth herein;
NOW, THEREFORE, in consideration of the following mutual covenants and
agreements the parties hereto
agree as follows:
1. SCOPE OF ENGAGEMENT
The Company hereby engages SHA to provide business consulting services
to the Company for the term specified herein, and SHA accepts such engagement,
subject to the limitations and conditions set forth herein. SHA shall report
directly to Xxxxx Xxxxx, or such other person as the Board of Directors shall
designate from time to time.
The term of this Agreement shall commence on February 10, 2003, and
shall continue until either party delivers notice of termination of this
Agreement, in writing, to the other party in accordance with this agreement.
Such notice of termination if delivered by Company may be effective immediately
upon receipt by SHA. Notwithstanding the termination of this Agreement, the
provisions of paragraph 8 regarding confidentiality shall remain in full force
and effect for a period of eighteen months following the termination hereof.
2. SHA DUTIES. SHA shall provide management consulting services to the
Company with the long-term objective, but without any guarantee, to maintain and
improve the Company's financial position and profitability and to work with and
train the senior management of the Company.
Xxxx Steinbrun or such other employees of SHA as may be approved by the
Company (each a Representative or SHA Consultant) shall provide the services to
be performed by SHA hereunder. SHA and each Representative shall be an
independent contractor with respect to the Company and shall not be deemed to be
an employee of the Company for any purpose. The Company shall indemnify SHA and
each SHA Consultant as set forth in Section 7 below. In addition, the Company
shall maintain directors and officers liability insurance in an aggregate amount
not less than $10,000,000 protecting the directors and officers, agents and
representatives of the Company against any liability or expense resulting from
the acts or omissions of any such director, officer, agent or representative and
shall name SHA and its directors, officers and agents as additional insureds
thereunder.
3. LIMITATION OF SCOPE.
a. SHA Consultants are independent contractors, and as such,
SHA Consultants are not eligible to participate in or receive any benefit under
any benefit plan or program available to employees of the Company such as
health, disability, or life insurance, vacation or holiday pay, sick leave,
profit sharing or pension plans. The Company shall not provide workers'
compensation coverage for any SHA Consultant. SHA Consultants act solely in an
advisory and consulting capacity, and do not have the authority to bind the
Company in any manner. SHA (and the SHA Consultants, as applicable) shall comply
with all applicable laws and regulations and shall have sole responsibility for
the payment of all applicable taxes and withholdings with respect to any and all
compensation paid to SHA or the SHA Consultants hereunder.
b. SHA cannot guarantee any particular results. The Company
understands and acknowledges that the work effort, analysis and advice of SHA
Consultants are inherently subjective, and that reasonable professionals or
individuals reviewing the same information may reach entirely different
conclusions. The Company releases SHA from all responsibility as to the
reliability and accuracy of all the information provided to SHA by the Company
that may be utilized by SHA in making any analysis or providing any service.
c. Unless SHA gives its prior consent, the Company agrees that
any and all advice, written or oral, provided by SHA pursuant to this Agreement
will be (i) treated by the Company as confidential, (ii) be used solely for the
information and assistance of the Company, and (iii) not be used, circulated,
quoted, filed or otherwise referred to for any other purpose, whether written or
oral (such advice may be circulated among employees and directors of the company
and certain outside professionals to the extent necessary for the performance of
their duties with respect to the Company and for no other purpose). No one other
than the Company is authorized to rely on our engagement hereunder or any
statements, advice, opinions, or conduct by SHA Consultants. SHA is being
engaged hereunder to provide services only to the Company and shall have a
fiduciary responsibility directly to the Company only in connection with this
engagement.
d. SHA and its affiliates have and will continue to have
relationships with parties other than the Company, some of whom may be
creditors, or may have some other relationship with the Company. All information
regarding the Company derived as a result of the services performed pursuant to
this Agreement shall remain confidential in accordance with the terms hereof.
During the term of this Agreement, SHA shall not engage in, or provide services
to, any business that competes directly with the business of the Company. The
Company agrees that it does not consider SHA's engagement by clients that are
not competitors of the Company in matters that are not related to the Company to
be inappropriate and, therefore, waives any objection to any such present or
future concurrent assignments. Notwithstanding the foregoing, nothing in this
paragraph d. shall limit SHA's or the SHA Consultant's obligations under Section
8 hereof.
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e. When evaluating exit options that may involve the sale of
shares of the Company by one or more shareholders of the Company, or the assets
of the Company by the Company, the Company or its shareholders should retain
qualified professionals, lawyers, accountants, and other specialists, to conduct
due diligence, appraise the business, and determine whether the price being paid
is fair or appropriate. The Company acknowledges that SHA Consultants are not
appraisers and cannot take responsibility for any of these tasks.
f. SHA Consultants are not attorneys and do not provide legal
advice or opinions on legal matters, draft or review legal documents, or
represent clients in legal matters.
4. HIRING OF CONSULTANTS/EMPLOYEES. SHA expends substantial effort and
expense hiring and training SHA Consultants and other SHA employees.
Accordingly, the Company (on behalf of itself and each of its affiliates) agrees
not to extend an offer of employment to a SHA Consultant or employee during the
term of this Agreement or for a 2-year period after the SHA Consultant's
assignment has been completed, whichever is later. If the Company or its
affiliates hire a SHA Consultant or employee within the above time period, the
Company agrees to pay SHA in cash the sum of $100,000 per person hired. This fee
does not apply if the Company xxxxx Xxxx Steinbrun.
5. EXPENDITURES BY REPRESENTATIVE. All reasonable travel expenses
incurred by SHA and SHA Consultants in performing their duties pursuant to this
Agreement shall be reimbursed by the Company to SHA, if approved in advance in
accordance with the Company's expense reimbursement policy, upon submission of
an expense report along with regular weekly invoices.
6. COMPENSATION OF SHA. SHA shall receive the following fees as
compensation for services rendered under this Agreement:
a. Xxxx Steinbrun $12,000 per week
b. Other SHA Consultants at normal SHA rates as reasonably
acceptable to the Company.
7. INDEMNIFICATION. The Company shall indemnify, defend and hold
harmless SHA and SHA's assigns, affiliates, agents, employees, officers,
directors and representatives (each an "Indemnitee") from and against any and
all demands, complaints, actions or causes of action, suits (including a claim
or lawsuit asserted or filed by any shareholder of the Company), proceedings,
investigations, arbitrations, assessments, losses, claims, obligations, damages
or liabilities, costs and expenses, including, but not limited to, interest,
penalties and reasonable attorney's fees and disbursements, asserted against,
imposed upon or incurred by any Indemnitee, directly or indirectly, regardless
of whether known or unknown to which Indemnitee may become subject by reason of
or resulting from performing duties pursuant to this Agreement; provided,
however, the Company shall not indemnify and hold harmless Indemnitee for
damages suffered and determined by a court of law to be the result of gross
negligence or willful misconduct on the part of SHA's assigns, affiliates,
agents, employees, officers, directors or representatives.
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8. CONFIDENTIAL INFORMATION. SHA hereby acknowledges that in the
performance of this Agreement it will become aware of proprietary information of
the Company that could cause injury to the Company in the event such information
is disclosed to others. In furtherance thereof, SHA shall cause each
representative to execute a standard Confidentiality Agreement prior to or
contemporaneously with the commencement of services hereunder. Additionally, SHA
hereby covenants not to disclose such proprietary information unless such
disclosure is approved by the Company, such disclosure is made by the
Representative acting in his capacity as an agent of the Company in accordance
with Company policy or required disclosures, or SHA is required by law to make
such disclosure. The Company agrees to use its best efforts to advise SHA
Consultants of any information whose sensitivity and confidentiality is not
reasonably obvious.
9. EXCLUSIVE APPLICATION. Except as provided in Paragraph 5, nothing in
this Agreement is intended or shall be construed to confer upon or to give to
any person, firm, or corporation other than the parties hereto any right,
remedy, or claim under or by reason of this Agreement. All terms and conditions
of this agreement shall be for the sole exclusive benefit of the parties hereto.
10. NONASSIGNABILITY. This Agreement is not assignable by either party
without the prior written consent of the other party.
11. ENTIRE AGREEMENT/AMENDMENT. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all agreements previously made between the parties relating thereto.
No modification, waiver or alteration of this Agreement (or any provision
hereof) shall be effective unless made in writing and signed by both SHA and the
Company.
12. NOTICES. All notices under this Agreement shall be in writing and
shall be deemed given when delivered personally or three (3) days after mailing
if sent by certified mail, postage prepaid, addressed to the parties as follows:
THE COMPANY:
Xxxxx Xxxxx
Overhill Farms Inc.
0000 Xxxx Xxxxxx Xxxxxx Xxxxxx, XX 00000
SHA:
Xxxx X. Steinbrun
Steinbrun, Xxxxxx and Associates
0000 Xxxxxxxx Xxxx., Xxxxx 000
Xxxxx Xxxxxx, XX 00000
13. NONWAIVER. No delay or failure by either party to exercise any
right under this Agreement, and no partial or single exercise of that right,
shall constitute a waiver of that or any other right, unless otherwise expressly
provided herein.
14. HEADING. Headings in this Agreement are for convenience only and
shall not be used to construe its provisions.
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15. GOVERNING LAW. This Agreement shall be construed in accordance with
and governed by the laws of the State of California.
16. ARBITRATION. Any claim or controversy arising between the parties
to this Agreement involving the interpretation or application of any provision
of this Agreement, or arising out of this Agreement, shall be submitted to
arbitration at Los Angeles, California, pursuant to the Commercial Rules (the
"Rules") of the American Arbitration Association ("AAA") by an arbitrator
mutually agreed upon by the parties. Such arbitrator shall be selected by the
parties hereto no later than ten (10) days after AAA notifies each party that a
demand for arbitration has been filed ("Arbitrator Designation Period"). In the
event SHA and Company are unable to agree on an arbitrator within the Arbitrator
Designation Period, AAA shall appoint a neutral arbitrator in accordance with
the Rules no later than ten (10) days following the expiration of the Arbitrator
Designation Period. The designated arbitrator shall not be an agent, employee,
shareholder, or affiliate of the Company or SHA. The decision of such arbitrator
shall be final and binding on the parties, and judgment upon the decision may be
entered in the state courts or federal courts having jurisdiction over Los
Angeles County, California.
17. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
18. BINDING EFFECT. The provisions of this Agreement shall be binding
upon and inure to the benefit of all parties and their respective legal
representatives, successors, and assigns.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement this 10th day of February, 2003, to be effective as of the day and
year first above written.
OVERHILL FARMS, INC.
By: /S/ XXXXX XXXXX
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Title: PRESIDENT
STEINBRUN, XXXXXX AND ASSOCIATES
By: /S/ XXXX X. STEINBRUN
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Title: PRESIDENT
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