EXHIBIT 2.2
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CONSULTING AGREEMENT
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CONSULTING AGREEMENT, made the 10th day of January, 2002, by and
between NATOOSH, LLC, New Jersey limited liability company ("Consultant") and
XXXX XXXXXXXX ("Provider"), on the one hand, and XXXXXX, Inc. ("Xxxxxx"), on the
other.
R E C I T A L S:
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A. Provider is the principal of Consultant.
B. Provider is the sole shareholder of Xxx X. Xxxxxxxx, Inc.
("MNNI").
C. Pursuant to an agreement, dated January 10, 2002, between
Provider and Xxxxxx (the "Purchase and Sale Agreement"), Xxxxxx is acquiring,
from Provider, all of the outstanding shares of MNNI (the "Shares").
D. MNNI is the sole shareholder of Topsville, Inc. ("Topsville")
and, until the Closing of the Purchase and Sale Agreement, Provider will be the
president of Topsville.
E. In order to preserve, protect and realize the value of Jaclyn's
investment in MNNI and Topsville, and in the property, assets, business and
goodwill that the Shares represent, Xxxxxx needs Consultant, by way of Provider,
to provide services and assistance in respect of the conduct of Topsville's
business after the Closing of the Purchase and Sale Agreement ("Consulting
Services").
F. Provider has agreed to personally provide the Consulting Services
on behalf of Consultant.
NOW, THEREFORE, it is agreed as follows:
1. Definitions. Capitalized terms have the meanings ascribed to them by
this Consulting Agreement and/or by the Purchase and Sale Agreement.
2. Consulting Services. From the Closing Date of the Purchase and Sale
Agreement and until June 30, 2004 (the "Consulting Period"), Consultant shall
provide such Consulting Services as Xxxxxx shall, in the reasonable exercise of
its business judgment, from time-to-time request. The Consulting Services shall
be of a similar nature to the services that Provider provided to Topsville prior
to the Closing. The Consulting Services shall be provided by Provider
personally. In that regard, Provider shall (subject to reasonably excusable
absence due to illness or personal matters) devote, on the average, thirty-five
(35) work hours per week, forty-eight 48) weeks per calendar year, to the
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performance of the Consulting Services. Provider shall, to the extent
practicable, coordinate the hours of the Consulting Services to coincide with
the regular business hours of Topsville. Except to the extent that they involve
travel, the Consulting Services shall, to the extent practicable, be rendered at
the current New York City offices of Topsville, or, if Topsville moves its
offices during the Consulting Period, then at such other location(s) in the
metropolitan New York City area as Xxxxxx may reasonably request. Xxxxxx shall
endeavor to provide an executive-type office for Provider to use in connection
with the performance of Consulting Services at the above location(s).
3. Priority of Consulting Services. Except for the restrictions set forth
in the Purchase and Sale Agreement, Consultant and Provider may engage in other
business activities besides the Consulting Services, but only if such other
business activities (i) do not impinge upon or conflict with the coordinations
of hours and locations that are required by P. 3, (ii) do not impinge upon or
conflict with the travel requirements of P. 4, and (iii) do not become a
principal business activity of Consultant or Provider, it being understood and
agreed that, during the Consulting Period, Consultant's and Provider's priority
business activity and priority business responsibility shall be the Consulting
Services.
4. Travel. The Consulting Services shall include such reasonable
business-related travel as Xxxxxx xxxxx advisable for or helpful to the conduct
of Topsville's business, including, but not limited to, domestic travel to
actual or potential customers of Topsville, foreign shopping trips (with or
without Topsville's customers) to aid in the selection or development of
product, and foreign trips which relate to the production of goods for
Topsville. Xxxxxx shall reimburse Consultant for authorized air travel expenses
that it or Provider incurs in that regard, at the coach class rate for
business-related domestic travel and at the business class rate for
business-related travel outside North America. Xxxxxx shall also reimburse
Consultant for other reasonable business-related travel and entertainment
expenses (documented and submitted for reimbursement) that it or Provider incurs
in that regard, in accordance with Provider's past practices when traveling on
Topsville-related business prior to the Closing. Reimbursement shall be made
within fourteen (14) days after the submission of properly documented vouchers
and expense records to Xxxxxx. Consultant may, if the circumstances so warrant,
request a reasonable advance towards projected "on the ground" expenses that it
anticipates will be incurred in connection with reimbursable foreign travel
and/or business sample costs, and Xxxxxx shall, after due consultation with
Consultant, provide a reasonable advance in that regard. Retention of any such
advance is subject to the same post-expense documentation support as
non-advanced reimbursable expenses.
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5. Termination for Cause.
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(a) Provider shall use his best efforts to perform the Consulting
Services with the same degree of diligence and aptitude that he used in
performing similar services for Topsville prior to the Closing. If
Provider fails to do so, or if Consultant or Provider fails to comply
with any reasonable request or directive of Xxxxxx regarding the
performance of the Consulting Services, Xxxxxx may give Consultant
written notice of such failing and how it should be corrected (if
capable of correction) or, if incapable of correction, how it should be
prevented in the future. If, within thirty (30) days after such notice,
Consultant and Provider do not substantially correct a noticed failing
that is capable of correction (or repeat it thereafter), or, if such
noticed failing is incapable of correction within that 30-day period,
fail, within the 30-day period, to reasonably and diligently correct
the noticed failing as soon as possible and/or prevent its
reoccurrence, then Xxxxxx may, at its option, terminate this Consulting
Agreement. Termination by Xxxxxx under such circumstances shall be
deemed a permissible termination for cause. Nothing contained herein
shall be construed (A) as precluding Consultant from contesting the
correctness of an assertion by Xxxxxx (i) that Provider has not
performed with the requisite degree of diligence and aptitude, (ii)
that Consultant or Provider has failed to comply with a reasonable
request or directive, (iii) that such failures have not been timely and
substantially corrected (or, where applicable, that reasonable and
diligent measures were not timely taken), or (iv) that such failures
have been repeated, or (B) as precluding Xxxxxx from opposing any such
contest. In the event of legal proceedings concerning such a contest,
the prevailing party in such legal proceedings shall recover from the
other its reasonable costs and expenses in such legal proceedings,
including its reasonable attorneys' fees. In the event Xxxxxx is the
prevailing party, it shall recover such costs, expenses and attorneys'
fees from Consultant and Provider, jointly and severally, even if only
one of Consultant or Provider made or opposed the contest.
(b) If Consultant has knowingly made any materially false
representation or warranty in the Purchase and Sale Agreement, Xxxxxx
may, at its option, terminate this Consulting Agreement. Termination by
Xxxxxx under such circumstances shall be deemed a permissible
termination for cause. Termination by Xxxxxx pursuant to the option set
forth in this subdivision (b) can only be made within thirty (30) days
after Xxxxxx learns that a materially false representation or warranty
was made to it; provided, however, that the 30-day period for
exercising the option shall re-start in the event Xxxxxx learns that a
materially false representation or warranty, not previously known to
it, was made to it.
(c) If, in the course of performing the Consulting Services, Consultant
knowingly makes any materially false statement to Xxxxxx regarding
something that materially impacts upon the business of Topsville, or
knowingly conceals or in bad faith knowingly withholds from Xxxxxx
information that materially impacts upon the business of Topsville,
Xxxxxx may, at its option, terminate this Consulting Agreement.
Termination by Xxxxxx under such circumstances shall be deemed a
permissible termination for cause.
(d) If Xxxxxx, without (i) terminating this Consulting Agreement as
permitted in P. P. 5-6 or (ii) exercising its rights of setoff and/or
recoupment under the Purchase and Sale Agreement, fails to pay
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Consultant an amount that is rightfully due Consultant under this
Consulting Agreement, Consultant shall give Xxxxxx written notice of
such payment default. If, within thirty (30) days after such notice,
Xxxxxx does not correct the noticed default, Consultant may, at its
option, terminate this Consulting Agreement within ten (10) business
days thereafter. Termination by Consultant under such circumstances
shall be deemed a permissible termination for cause. Nothing contained
herein shall be construed (A) as precluding Xxxxxx from contesting the
correctness of an assertion by Consultant (i) that Xxxxxx has failed to
pay an amount that is rightfully due or (iii) that such failure was not
timely corrected, or (B) as precluding Consultant from opposing any
such contest. In the event of legal proceedings concerning such a
contest, the prevailing party in such legal proceedings shall recover
from the other its reasonable costs and expenses in such legal
proceedings, including its reasonable attorneys' fees. In the event
Xxxxxx is the prevailing party, it shall recover such costs, expenses
and attorneys' fees from Consultant and Provider, jointly and
severally, even if only one of Consultant or Provider made or opposed
the contest.
(e) If Xxxxxx terminates this Consulting Agreement because of a
material breach by Provider of the Purchase and Sale Agreement, or if
Consultant terminates this Consulting Agreement because of a material
breach by Xxxxxx of the Purchase and Sale Agreement, and if the party
asserting such material breach is ultimately sustained in that
assertion by a judgment, final as to all appeals, then the termination
of this Consulting Agreement by such party shall be deemed a
permissible termination for cause.
(f) Consultant specifically agrees that its rights to any payments
under this Consulting Agreement are subject to Jaclyn's rights of
setoff and/or recoupment under the Purchase and Sale Agreement and
that, given the overall nature of the transactions among the parties,
Jaclyn's exercise of rights of setoff and/or recoupment is warranted.
6. Termination for Lack of Business. If, during any consecutive twelve
(12) month period following the Closing Date, Topsville does not actually
receive orders from its customers for the purchase of apparel (which orders are
accounted for substantially in the form and manner of SCHEDULE 8.5 to the
Purchase and Sale Agreement) in the amount of twenty-one million dollars
($21,000,000) or greater, Xxxxxx may, at its option, terminate this Consulting
Agreement. Termination by Xxxxxx under such circumstances shall be deemed a
permissible termination for lack of business. The fact that Xxxxxx is entitled
to terminate this Consulting Agreement under such circumstances shall not be
construed as giving Xxxxxx the right to seek damages from Consultant or Provider
for such lack of business.
7. Base Compensation.
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(a) For the Consulting Services, Xxxxxx shall pay Consultant a "base
compensation" of thirty-three thousand eight hundred fifty-four and
17/100 dollars ($33,854.17) for each calendar month of the Consulting
Period, except that, for the month of January 2002 only, the "base
compensation" shall be $33,854.17 plus the amount of cash in bank that
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Topsville, MNNI and JGSL have immediately following the Closing. If
this Consulting Agreement is (i) wrongfully terminated by Consultant or
(ii) rightfully terminated by Xxxxxx, "base compensation" shall only be
paid to the date of termination, and, if such termination occurs before
the end of a calendar month, the "base compensation" for that month
shall be prorated accordingly.
(b) The said monthly "base compensation" shall be paid on the fifteenth
(15th) day of the calendar month, or if the fifteenth is not a business
day, then on the first business day after the fifteenth. The first such
payment shall be made on January 15, 2002, for the first calendar month
of the term of the Consulting Period, even though Consultant is not
providing Consulting Services for the entirety of that calendar month.
Xxxxxx shall not be entitled to any credit or offset for the days of
that calendar month which preceded the beginning of the Consulting
Period, it being the intention of the parties that the payment for that
full calendar month constitutes a bonus payment. Unless this Consulting
Agreement is (i) wrongfully terminated by Consultant or (ii) rightfully
terminated by Xxxxxx, the last such payment shall be made on June 15,
2004. If this Consulting Agreement is wrongfully terminated by
Consultant or rightfully terminated by Xxxxxx before the end of a
calendar month, but after the date that the "base compensation" payment
for that month was made, Consultant shall promptly refund the
overpayment for that month, pro-rata.
8. Bonus Payments. In addition to the aforesaid "base compensation",
Xxxxxx shall, under the conditions stated in thisP. 8, pay Consultant the
following "bonus" amounts:
(a) If, for the period from July 1, 2002 through June 30, 2003, the Net
Sales of Topsville at the Prescribed Margin Level exceed thirty-two
million five hundred thousand dollars ($32,500,000), Consultant shall,
on July 31, 2003, receive a bonus payment equal to four percent (4%) of
those Net Sales at the Prescribed Margin Level which exceeded $32.5
million.
(b) If, for the period from July 1, 2003 through June 30, 2004, the Net
Sales of Topsville at the Prescribed Margin Level exceed thirty-two
million five hundred thousand dollars ($32,500,000), Consultant shall,
on July 31, 2004, receive a bonus payment equal to four percent (4%) of
those Net Sales at the Prescribed Margin Level which exceeded $32.5
million.
(c) If, for the applicable period under subdivision (a) or (b),
Topsville's Net Sales exceed $32.5 million, and the overall profit
margin is less than the Prescribed Margin Level (i.e., 22.5%) but is at
least 20.5%, Consultant shall still receive a bonus payment, but a
reduced one, in accordance with the following schedule:
(i) If the overall profit margin is at least 21.5% but is less
than 22.5%, the bonus percentage shall be reduced from four percent
(4%) to two percent (2%).
(ii) If the overall profit margin is at least 20.5% but is less
than 21.5%, the bonus percentage shall be reduced from four percent
(4%) to one percent (1%).
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(iii) There will be no bonus payment if Net Sales do not exceed
the applicable threshold (i.e., $32.5 million) or if the overall profit
margin is not at least 20.5%.
(d) If, prior to June 30, 2003, this Consulting Agreement is terminated
(i) by Consultant (whether pursuant P. 5(d) or otherwise) or (ii) by
Xxxxxx as provided in P. P. 5-6, the amount of the bonus payment, if
any, that is payable on July 31, 2003, shall be prorated in accordance
with that amount of the period July 1, 2002 - June 30, 2003 which
preceded termination. If, prior to June 30, 2003, this Consulting
Agreement is terminated (i) by Consultant (whether pursuant P. 5(d) or
otherwise) or (ii) by Xxxxxx as provided in P. P. 5-6, Consultant shall
receive no bonus payment (or part thereof) that might otherwise be
payable on July 31, 2004.
(e) If, prior to June 30, 2004, this Consulting Agreement is terminated
(i) by Consultant (whether pursuant P. 5(d) or otherwise) or (ii) by
Xxxxxx as provided in P. P. 5-6, the amount of the bonus payment, if
any, that is payable on July 31, 2004, shall be prorated in accordance
with that amount of the period July 1, 2003 - June 30, 2004 which
preceded termination.
9. Reservation of Rights.
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(a) Except as provided in P. P. 5(d) and (e), none of the references to
this Consulting Agreement being terminated by Consultant shall be
construed as giving Consultant any right or option to terminate this
Consulting Agreement prior to the end of the Consulting Period. If
Consultant wrongfully terminates this Consulting Agreement, then, in
addition to losing "base compensation" and "bonus compensation" as
aforesaid, Consultant and Provider shall be jointly and severally
liable for damages and/or such other remedies as law or equity may
afford to Xxxxxx for such a breach. If Consultant purports to terminate
this Consulting Agreement pursuant to P. P. 5(d) or (e) and Xxxxxx
contests such conduct and is the prevailing party thereon, then, in
addition to losing "base compensation" and "bonus compensation" as
aforesaid, Consultant and Provider shall be jointly and severally
liable for damages and/or such other remedies as law or equity may
afford to Xxxxxx for such conduct, including, but not limited to,
reasonable attorneys' fees as provided herein.
(b) Jaclyn's right to terminate this Consulting Agreement for cause as
provided in P. 5 shall not be construed as giving Consultant any right
or option to act in a manner which permits such termination. If
Consultant does so act, then, in addition to losing "base compensation"
and "bonus compensation" as aforesaid, Consultant and Provider shall be
jointly and severally liable for damages and/or such other remedies as
law or equity may afford to Xxxxxx for such conduct, including, but not
limited to, reasonable attorneys' fees as provided herein.
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(c) Except as provided in P. P. 5-6, Xxxxxx shall not have any right or
option to terminate this Consulting Agreement prior to the end of the
Consulting Period. If Xxxxxx wrongfully terminates this Consulting
Agreement, it shall be liable for damages, which shall be calculated as
follows: (1) "base" and/or "bonus" compensation that was due but unpaid
as of that termination date, plus (2) "base" and/or "bonus"
compensation for the period after that termination date and up to the
date that this Consulting Agreement would otherwise have terminated
(the "Future Period"), (3) less all money that Provider (or a company
of which Provider is principal) earns or will earn during the Future
Period as an employee or for services rendered as an independent
contractor.
10. Limit on Recovery of Attorneys' Fees. It is only in the events
specified in P. P. 5(a) and (d) that the prevailing party shall be entitled to
recover all of its reasonable attorneys' fees. In all other instances in which
there is litigation concerning any alleged wrongful termination of this
Consulting Agreement or any alleged breach of this Consulting Agreement, the
prevailing party shall also be entitled to recover its reasonable attorneys'
fees, but only up to an aggregate maximum of twenty-five thousand dollars
($25,000). In the event Xxxxxx is the prevailing party in such litigation, it
shall recover such attorneys' fees from Consultant and Provider, jointly and
severally, even if only one of Consultant or Provider was party to the
litigation.
11. Stock Option.
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(a) Xxxxxx hereby grants to Consultant an option (the "Option") to
purchase an aggregate of one hundred twenty thousand (120,000) shares
of the common stock, $1.00 par value per share, of the Xxxxxx ("Common
Stock") at an exercise price which shall be equal to the closing price
of that stock on the last date before the date of this Consulting
Agreement on which that stock is reported (in the Wall Street Journal
or similarly reputable publication) as having been publicly traded on
the American Stock Exchange, such price being the fair market value (as
hereinafter defined) per share of Common Stock on the date hereof. The
Option is a nonstatutory stock option and is not intended to constitute
an incentive stock option within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code").
(b) The term of the Option shall be seven (7) years. Subject to earlier
termination as provided in thisP. 11, the Option shall be exercisable
as to forty thousand (40,000) shares of Common Stock on the date of
this Consulting Agreement (the "First Tranche"), as to an additional
forty thousand (40,000) shares of Common Stock on the first anniversary
of that date (the "Second Tranche") and as to the remaining forty
thousand (40,000) shares of Common Stock on the second anniversary of
that date (the "Third Tranche"). The First Tranche, the Second Tranche
and the Third Tranche are each sometimes hereinafter referred to herein
as a "Tranche" and collectively, as the "Tranches"). The term of each
Tranche shall be five (5) years from the first date such Tranche shall
become exercisable hereunder (the First Tranche shall have a term
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commencing on the date of this Consulting Agreement and ending on the
fifth anniversary thereof, the Second Tranche shall have a term
commencing on the first anniversary of this Consulting Agreement and
ending on the sixth anniversary thereof, and the Third Tranche shall
have a term commencing on the second anniversary of this Consulting
Agreement and ending on the seventh anniversary thereof), and,
accordingly, Consultant shall be entitled to exercise the Option as to
each Tranche only during the applicable term of such Tranche, but, in
no event, after the end of the applicable term of such Tranche. In no
event may a fraction of a share of Common Stock be purchased or issued
under the Option. Shares of Common Stock to be issued hereunder may
consist, in whole or in part, of authorized but unissued shares of
Common Stock or shares of Common Stock held in the treasury of Xxxxxx.
(c) The Option shall be exercised by giving written notice to Xxxxxx at
its then principal office, presently 000 00xx Xxxxxx, Xxxx Xxx Xxxx,
Xxx Xxxxxx 00000, Attention: Chief Financial Officer, stating that
Consultant is exercising the Option, specifying the number of shares
being purchased and the Tranche being exercised, and accompanied by
payment in full of the aggregate purchase price therefor in cash or by
certified check. Consultant shall not have the rights of a stockholder
with respect to such shares until the date of issuance of a stock
certificate to him for such shares. No adjustment shall be made for
dividends (ordinary or extraordinary, whether in cash, securities,
other property or otherwise) or distributions or other rights for which
the record date is prior to the date any such stock certificate shall
be issued.
(d) Xxxxxx may withhold cash, shares of Common Stock to be issued to
Consultant, or a combination thereof, in the amount which Xxxxxx
determines is necessary to satisfy its obligation, if any, to withhold
federal, state and local income taxes or other amounts incurred by
reason of the grant, vesting, exercise or disposition of the Option or
the underlying shares of Common Stock. Alternatively, Xxxxxx may
require Consultant to pay Xxxxxx such amount in cash upon demand.
(e) The Option shall not be exercisable by Consultant unless (a) a
Registration Statement under the Securities Act of 1933, as amended
(the "Securities Act"), with respect to the shares of Common Stock to
be received upon the exercise of the Option shall be effective and
current at the time of exercise or (b) there is an exemption from
registration under the Securities Act for the issuance of the shares of
Common Stock upon such exercise. Xxxxxx may require, in its sole
discretion, as a condition to the exercise of the Option, that
Consultant execute and deliver to Xxxxxx the Consultant's
representations and warranties, in form, substance and scope
satisfactory to Xxxxxx, that Xxxxxx determines is necessary or
convenient to facilitate the perfection of an exemption from the
registration requirements of the Securities Act, applicable state
securities laws or other legal requirements, including without
limitation, that the shares of Common Stock to be issued upon the
exercise of the Option will be acquired by Consultant for his own
account, for investment only and not with a view to the resale or
distribution thereof. In order to induce Xxxxxx to grant the Option,
Consultant hereby represents and warrants to Xxxxxx that, unless a
Registration Statement under the Securities Act is effective and
current at the time of each exercise of the Option with regard to the
shares of Common Stock to be issued to him upon such exercise, the
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shares of Common Stock to be issued upon the exercise of the Option
will be acquired by Consultant for his own account, for investment only
and not with a view to the resale or distribution thereof. Any
subsequent resale or distribution of shares of Common Stock by
Consultant shall be made only pursuant to (x) a Registration Statement
under the Securities Act which is effective and current with respect to
the sale of shares of Common Stock being sold, or (y) a specific
exemption from the registration requirements of the Securities Act, but
in claiming such exemption, Consultant shall, prior to any offer of
sale or sale of such shares of Common Stock, provide Xxxxxx (unless
waived by Xxxxxx) with a favorable written opinion of counsel, in form,
substance and scope satisfactory to Xxxxxx, as to the applicability of
such exemption to the proposed sale or distribution. Nothing herein
shall be construed as requiring Xxxxxx to register the shares subject
to the Option under the Securities Act or to keep any Registration
Statement current or effective.
(f) If at any time Xxxxxx shall determine, in its sole discretion, that
the listing or qualification of the shares of Common Stock subject to
the Option on any securities exchange, The Nasdaq Stock Market, Inc.,
or under any applicable law, or the consent or approval of any
governmental regulatory body or other governmental authority, is
necessary or desirable as a condition to, or in connection with, the
issuance of shares of Common Stock hereunder, the Option may not be
exercised in whole or in part unless such listing, qualification,
consent or approval shall have been effected or obtained free of any
conditions not acceptable to Xxxxxx.
(g) Xxxxxx may endorse such legend or legends upon the certificates for
shares of Common Stock issued upon exercise of the Option and may issue
such "stop transfer" instructions to its transfer agent in respect of
such shares as it determines, in its sole discretion, to be necessary
or appropriate to (a) prevent a violation of, or to perfect an
exemption from, the registration requirements of the Securities Act,
applicable state securities laws or other legal requirements, or (b)
implement the provisions of any agreement between Xxxxxx and Consultant
with respect to such shares of Common Stock.
(h) In the event of any change in the outstanding Common Stock by
reason of a stock dividend, recapitalization, merger in which Xxxxxx is
the surviving corporation, spinoff, split-up, combination or exchange
of shares or the like which results in a change in the number or kind
of shares of Common Stock which are outstanding immediately prior to
such event, the aggregate number and kind of shares subject to the
Option and the exercise price hereof may be appropriately adjusted by
Xxxxxx, whose determination shall be conclusive and binding on all
parties. Such adjustment may provide for the elimination of fractional
shares that might otherwise be subject to the Option without payment
therefor. In addition, and without limiting the generality of the
foregoing, in the event of any offer to holders of Common Stock
generally relating to the acquisition of their shares, Xxxxxx may make
such adjustment in respect of the Option, including, in Jaclyn's sole
discretion, revision of the Option and the rights of Consultant
hereunder, so that it may be exercisable for the consideration payable
in such transaction. The determinations of Xxxxxx in respect of the
foregoing shall be conclusive and binding.
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(i) In the event of a proposed dissolution or liquidation of Xxxxxx, or
in the event of a proposed sale of all or substantially all of the
assets of Xxxxxx, or the merger of Xxxxxx with or into another
corporation or entity, Xxxxxx may, as to outstanding options, (a) make
appropriate provision for the protection of the Option by the
substitution of an option to purchase appropriate stock or other
securities or property of Xxxxxx or of the merged, consolidated or
otherwise reorganized corporation or other entity which will be
issuable in respect to each share of Common Stock of Xxxxxx, (b) upon
written notice to an optionee, provide that all unexercised options, to
the extent then exercisable, must be exercised within a specified
number of days of the date of such notice or they, along with the
Tranches, if any, that shall not yet be exercisable, will be
terminated, or (c) take such other action in connection therewith as
Xxxxxx may deem necessary or convenient. In any such case, the board of
directors of Xxxxxx may, in its discretion, advance the lapse of any
waiting or installment periods and exercise dates.
(j) The grant of this Option shall not be construed as giving
Consultant any right to be associated with Xxxxxx or any of its
subsidiaries or affiliates other than as set forth in this Consulting
Agreement.
(k) Consultant represents and agrees that he will comply with all
applicable laws relating to the grant and exercise of the Option and
the disposition of the shares of Common Stock acquired upon exercise of
the Option, including without limitation, federal and state securities
and "blue sky" laws.
(l) The Option is not transferable by Consultant, and it shall
automatically expire upon the death of Provider, except that, in the
event of Provider's death, the Option may be exercised, to the extent
it was exercisable on the date of such death, by Provider's executor,
administrator or other person at the time entitled by law to exercise
Consultant's rights under the Option, at any time within six months
after Provider's death, but in no event after the expiration of the
applicable term of the respective Tranches or the Option. Except to the
extent provided above, the Option may not be assigned, transferred,
pledged, hypothecated or disposed of in any way (whether by operation
of law or otherwise) and shall not be subject to execution, attachment
or similar process, and any such attempted assignment, transfer,
pledge, hypothecation or disposition shall be null and void ab initio
and of no force or effect.
(m) Xxxxxx shall have the authority, in its sole discretion, to make
all determinations necessary or advisable relating to the Option. Each
controversy or claim arising out of or relating to this P. 11 or the
Option shall be determined by Xxxxxx, which determination shall be
conclusive and binding on Consultant. Neither Xxxxxx nor any officer,
director or employee of Xxxxxx shall be liable for any action, failure
to act or determination made in good faith with regard to the Option.
(n) The provisions of this P. 11, and only this P. 11, shall be
governed by and interpreted under the laws of the State of Delaware,
without regard to the conflicts of law principles thereof. At Jaclyn's
option, the provisions of this P. 11, and only this P. 11, may be
enforced and/or adjudicated, without a jury, in a federal or state
court located in Delaware.
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12. No Fringe Benefits. Consultant is an independent contractor with
Xxxxxx. Except for the Option discussed in P. 11, neither Consultant nor
Provider shall receive any fringe benefits from Topsville, MNNI or Xxxxxx, nor
shall they be entitled to any rights, privileges or entitlements that might
apply to employees of Topsville, MNNI or Xxxxxx. Except as provided in this
Consulting Agreement, Neither Provider nor Consultant shall be subject to any
obligations that Xxxxxx presently or in the future may impose on its employees,
except such obligations as are required by law.
13. Protection of Information. Both during and after the Consulting Period,
and notwithstanding any termination of this Consulting Agreement, Consultant and
Provider shall hold in confidence, and shall not use for any purpose that is not
specifically authorized by Xxxxxx, any and all trade secrets of Topsville, MNNI
and/or Xxxxxx, as well as any and all other trade data of Topsville, MNNI and/or
Xxxxxx which is not generally known outside of those companies. "Trade secret"
means "any formula, pattern, device or compilation of information which is used
in one's business, and which gives him an opportunity to obtain an advantage
over competitors who do not know or use it."
14. Extension of Consulting Period. The parties hereto may, by written
amendment that is signed by all of them, extend the term of the Consulting
Period beyond June 30, 2004, on such terms and conditions as such an amendment
may provide.
15. Death or Disability of Provider. It is an essential condition and
element of this Consulting Agreement that the Consulting Services be personally
provided by Provider. Accordingly, Consultant's "base" and "bonus" compensation
shall be prorated in the event of Provider's death, to the date of such death.
In the event Provider is disabled from fully performing the services required of
him hereunder, such compensation shall be prorated to account for any period of
such disability.
16. Assignment. In the event MNNI transfers or liquidates all or a majority
of its shares in Topsville and/or in the event Xxxxxx transfers or liquidates
all or a majority of its shares in MNNI (including, without limitation, causing
Topsville's business to be absorbed into Xxxxxx itself), this Consulting
Agreement shall inure to the benefit of Jaclyn's assignees in that regard (which
may, in the event of absorption, be Xxxxxx itself). To obtain such benefit, the
assignee(s) shall, in writing, assume the terms, conditions and obligations of
this Consulting Agreement. It is an essential condition and element of this
Consulting Agreement that the Consulting Services be personally provided by
Provider, and Consultant may not delegate its obligations hereunder in any way
that is inconsistent with that. Topsville and MNNI are intended third party
beneficiaries of this Consulting Agreement.
17. Notices. Notices under P. 5(a) and P. 5(d) of this Consulting Agreement
shall be in writing and shall be deemed to have been given on the date when
personally delivered to an officer of the other party or when sent by confirmed
facsimile transmission to the number (and copy number) shown below; or, if sent
by commercial overnight delivery service, then one (1) business day after being
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properly deposited for delivery by commercial overnight delivery service,
prepaid; or, if sent by U.S. mail, then three (3) business days after being
properly deposited in the United States mail, certified or registered mail,
postage prepaid, return receipt requested, and addressed as follows; unless and
until either of such parties notifies the other in accordance with this P. 17 of
a change of address or change of facsimile number:
If to Xxxxxx: Xxxxxx, Inc.
000-00xx Xxxxxx
Xxxx Xxx Xxxx, Xxx Xxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx
Fax No.: (000) 000-0000
With a copy to: Xxxxxx X. Xxxxxx, Esq.
00 Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax No.: (000) 000-0000
If to Consultant Natoosh LLC
or Provider: 00 Xxxx Xxxx Xxxx
Xxxxx Xxxxx, Xxx Xxxxxx 00000
Fax No.: (000) 000-0000
With a copy to: Xxxxxx Xxxxx, Esq.
Xxxxx & Liss
00 Xxxx Xxxxxx Xxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax No.: (000) 000-0000
18. Counterparts; Headings. This Consulting Agreement may be executed in
several counterparts, each of which shall be deemed an original, but such
counterparts shall together constitute but one and the same agreement. The
paragraph headings are inserted for convenience of reference only and shall be
disregarded in interpreting this Consulting Agreement.
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19. Severability. If any word, provision, clause or other part of this
Consulting Agreement, or the application thereof under certain circumstances, is
held invalid, or unenforceable, the remainder of this Consulting Agreement, or
the application of such word, provision, clause or other part under different
circumstances, shall not be affected thereby. In the event any word provision,
clause or other part of this Consulting Agreement shall be held invalid or
unenforceable, it shall be deemed modified, but only to the extent necessary to
make it lawful. To effect such modification, the said word, provision, clause or
other part shall be deemed deleted, added to and/or rewritten, whichever shall
most fully preserve the intentions of the parties as originally expressed
herein.
20. Survival. Termination of this Consulting Agreement, whether by lapse of
time or otherwise, shall not be deemed to extinguish any representations,
warranties or other agreements contained herein which, by their nature or
purpose, should survive.
21. Entire Agreement; Amendment; and Waivers. This Consulting Agreement and
the Purchase and Sale Agreement constitute the entire agreement between the
parties pertaining to the subject matter hereof, and supersede all prior and
contemporaneous agreements, understandings, negotiations and discussions of the
parties, whether oral or written. This Consulting Agreement may not be altered,
modified, terminated or discharged except by a writing signed by the party
against whom such alteration, modification, termination or discharge is sought
to be enforced. The failure (whether or not knowing and whether or not
prolonged) to take action against a breach or default under this Consulting
Agreement shall not be construed as a waiver of the right to take action against
such or a similar breach or default, it being understood that no waiver shall be
effective and no waiver is to be relied upon unless it be made in a writing
signed by the party charged with it.
22. Governing Law. Except as provided in P. 11, this Consulting Agreement
shall be governed by and interpreted under the laws of the State of New York,
without regard to the conflicts of law principles thereof. Subject only to P.
11, any controversy arising out of or relating to this Consulting Agreement, or
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any duty created thereby, shall be resolved without a jury in a federal or state
court located within the City of New York (and/or in any appellate court
therefrom) and in no other forum. The parties consent to jurisdiction in such
courts, waive any objection to such exclusive venue (except that Xxxxxx reserves
its option under P. 11(n)), waive trial by jury, and agree that service of the
summons to such proceedings (and of any papers which may accompany it) shall be
deemed sufficient if made by certified mail, postage prepaid, addressed to the
parties' addresses as designated in or hereafter changed under P. 17. Service by
such method shall be deemed complete five (5) business days after such mailing.
IN WITNESS WHEREOF, the parties have executed this Consulting Agreement
as of the day and year first above written.
XXXXXX, INC.
By: /s/ XXXXXX XXXXXXXX
--------------------------------
Name: Xxxxxx Xxxxxxxx
------------------------------
Title: President
------------------------------
NATOOSH, LLC
By: /s/ XXXX XXXXXXXX
--------------------------------
Name: Xxxx Xxxxxxxx
------------------------------
Title: President
------------------------------
PROVIDER
/s/ XXXX XXXXXXXX
------------------------------------
XXXX XXXXXXXX, individually
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