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CONSULTING AGREEMENT
This consulting agreement (the "Agreement") is entered into as of the 15th day
of July, 1999, by and between RETAIL CELLULAR, INC. ("RCI"), having offices at
00 Xxxxxxxxxx Xxxxxx, Xxxxxxxxxx, XX 00000, a Delaware corporation, which is to
become, on or about the date hereof, a wholly-owned subsidiary of Shared
Technologies Cellular, Inc. ("STC"), and RETAIL DISTRIBUTORS, INC., A DELAWARE
CORPORATION ("Consultant").
RECITALS:
WHEREAS, RCI wishes to engage the services of Consultant to provide certain
services to RCI, and Consultant has agreed to provide such services pursuant to
the terms hereof.
NOW THEREFORE, in consideration of the mutual promises and covenants set forth
herein, the parties agree as follows.
1. Responsibilities of Consultant.
1.1 During the term hereof, Consultant shall provide certain consulting
services to RCI in the area of assisting STC in its sales of prepaid cellular
services. Consultant shall report to the chief executive officer of STC and the
Board of Directors of RCI.
2. Responsibilities of RCI.
2.1 RCI shall compensate Consultant in accordance with Section 4 of this
Agreement.
3. Term and Termination.
3.1 This Agreement shall commence as of July 15, 1999 and shall continue
through March 31, 2001, subject to termination as provided hereinafter.
3.2 Either party may terminate this Agreement at any time for Cause, as
that term is defined herein.
(a) With respect to RCI, the term Cause shall mean (i) any material default
of RCI that is not cured within ten (10) days of RCI's receipt of
written notice thereof, except that RCI shall not be entitled to any
cure period in the event of more than three (3) defaults within any
period of twelve (12) consecutive months, or (ii) the filing against
RCI of a petition (voluntarily or involuntarily) pursuant to any
federal or state bankruptcy laws and such petition is not removed
within 30 days of being filed.
(b) With respect to Consultant, the term Cause shall mean (i) the willful
failure or refusal to comply with explicit lawful directives of RCI or
to render the services
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required herein; (ii) indictment of Consultant for a criminal offense;
(iii) any material default by Consultant that is not cured within ten
(10) days of Consultant's receipt of written notice thereof, except
that Consultant shall not be entitled to any cure period in the event
of more than three (3) defaults within any period of twelve (12)
consecutive months.
3.3 RCI may terminate this Agreement at any time in the event that
Consultant becomes insolvent or has filed against it (voluntarily or
involuntarily) a petition for bankruptcy under federal or state bankruptcy laws
and such petition is not removed within 30 days of being filed.
3.4 In the event of termination of this Agreement by RCI for Cause or by
reason of Consultant's insolvency or unremoved bankruptcy petition, pursuant to
Section 3.3 hereof, then RCI shall have the right to terminate that certain
Services Agreement by and between STC and Retail Distributors, Inc. ("RDI")
entered into on or about the date hereof, without further obligation of any
kind, except for then accrued payment obligations hereunder and under said
Services Agreement.
4. Consultant's Compensation.
4.1 During the term hereof, RCI shall pay compensation to Consultant at the
rate of $10,000 per month, payable at the end of each month, commencing as of
February 8, 1999, and terminating December 31, 2000, notwithstanding that the
term of this Agreement expires March 31, 2001.
5. Independent Contractor Status.
5.1 It is expressly understood and agreed that Consultant shall at all
times hereunder be an independent contractor and not an employee of RCI or its
Affiliates. As such, neither RCI nor its Affiliates shall have any
responsibilities for withholding any taxes on behalf of Consultant, nor shall
Consultant's employees be eligible for insurance or other benefits ordinarily
available to employees of RCI and its Affiliates.
6. Confidential Information.
6.1 Information. Consultant acknowledges and agrees that all non-public
information relating to RCI's or any of its Affiliate's customers, prospective
customers, distributors, prospective distributors, carriers, suppliers and other
business partners, trade secrets, business plans, sales and marketing
strategies, contracts, technologies and processes, software, products, services,
product development activities, procurement and sales records, promotion and
pricing information, financial data, and other proprietary data and information
of RCI and its Affiliates, whether known to RCI prior to or during the term of
this Agreement, (collectively, "Information") are valuable, special and unique
assets of RCI and its Affiliates. As used in this Agreement, the term Affiliate
shall mean any entity which controls RCI, is controlled by RCI or with which RCI
is under common control. Consultant acknowledges that his access to and
knowledge of the Information is essential to the performance of its duties for
RCI. Consultant represents and agrees that, except as specifically authorized in
writing by RCI or STC or in connection with the performance of its
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duties hereunder, Consultant will not, either during or after the term hereof
(i) disclose any Information to any person or entity for any purpose whatsoever,
or (ii) make use of any Information for its own purposes or for the benefit of
any other person or entity, other than RCI or its Affiliates. Consultant
acknowledges that all Information will at all times be subject to the control of
RCI and its Affiliates, and Consultant agrees to surrender and return the same
to RCI or STC upon request of RCI or STC, and in any event will surrender and
return such no later than the termination of this Agreement for any reason. The
obligations of this Section 6.1 shall survive the termination of this Agreement,
except as limited by Section 7.2 below. Notwithstanding, the foregoing,
Information shall not include information generally known in the industry, other
than through a breach of this Agreement, information provided to Consultant by a
third party not bound by a confidentiality agreement concerning such
information, and information independently developed by Consultant indicated by
its records.
6.2 Work Product, etc. Consultant hereby assigns, transfers and conveys to
RCI all of Consultant's right, title and interest to all work products generated
by Consultant in connection with this Agreement, including, without limitation,
all sales, marketing, advertising and distribution plans and material, conceived
or developed solely, or jointly with others by Consultant during the term hereof
(a) which relate directly or indirectly to the business of RCI or its
Affiliates; or (b) which result from any work performed or managed by Consultant
for RCI or its Affiliates. The obligations of Consultant under this Section 6.2
shall survive the termination of this Agreement, except as limited by Section
7.2 below.
7 Restrictive Covenant.
7.1 During the term hereof and for a period of one (1) year thereafter,
except as limited by Section 7.2 below, provided that RCI or its successors in
interest are not in material breach of their obligations hereunder, after giving
effect to any applicable cure period with respect to such breach, Consultant
shall not, directly or indirectly:
(a) conduct or assist others in conducting or be involved or interested
in any manner in any business relating to the provision of prepaid cellular
products or services within the United States;
(b) recruit, solicit or hire, or assist any other person or party in
recruiting, soliciting or hiring any Employee (as hereinafter defined), or
induce or attempt to induce or assist any other person or entity in inducing or
attempting to induce any Employee to terminate or alter its relationship with
RCI or any of its Affiliates (collectively "Recruiting Activity"). For the
purposes of this Section 7.1(b), the term "Employee" shall mean any person who
is, or within the six (6) month period preceding the date of any such Recruiting
Activity was, an employee or consultant of RCI or any of its Affiliates; or
(c) solicit any Customer (as hereinafter defined), or induce, attempt
to induce or assist any other person or entity in inducing or attempting to
induce any Customer to discontinue or alter its relationship with RCI or any of
its Affiliates (collectively "Solicitation Activity"). For the
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purposes of this Section 7.1(c), the term "Customer" shall mean any individual,
firm, partnership, corporation or other entity which is, or within the twelve
(12) month period immediately preceding the date of such Solicitation Activity
was, a customer, distributor, dealer, telecommunications carrier, or sales agent
of RCI or any of its Affiliates. It is understood and agreed that the
business(es) of RCI or any of its Affiliates are national in scope, and that the
geographical scope of the covenants set forth in this Section 7.1(c) is
therefore appropriate. IT IS EXPRESSLY UNDERSTOOD AND AGREED THAT THE SCOPE OF
EACH OF THE COVENANTS CONTAINED IN THIS SECTION 7.1(c) ARE REASONABLE AS TO
TIME, AFFECTED PERSONS, SCOPE OF ACTIVITIES AND GEOGRAPHIC AREA AND ARE
NECESSARY TO PROTECT THE LEGITIMATE BUSINESS INTERESTS OF RCI OR ANY OF ITS
AFFILIATES. It is further agreed that such covenants will be regarded as
divisible and if any such covenant is found by any court of competent
jurisdiction to be unenforceable because it extends for too long a period of
time or over too great a range of activities or persons or in too broad a
geographic area, it shall be interpreted to extend over the maximum period of
time, range of activities or persons, or geographic area as to which it may be
enforceable.
7.2 Notwithstanding anything else contained in this Agreement, Sections 6,
7 and 8 hereof shall not survive the expiration of the services agreement
entered into by and between STC and RDI on or about the date hereof (the
"Services Agreement") in the event that either (i) STC and RDI fail to negotiate
a mutually agreeable renewal of the Services Agreement, or (ii) STC elects to
not pay to RDI a noncompete payment of $100,000 per month for the twelve (12)
months following the expiration of the term of the Services Agreement, as
provided thereunder.
8. Equitable Remedies. It is hereby acknowledged that a violation of any
of the provisions set forth in Sections 6 or 7 of this Agreement is likely to
result in irreparable harm to RCI and/or its Affiliates. Therefore, in the event
of any such violation, RCI and/or its Affiliates, as the case may be, shall be
entitled to injunctive relief, which shall be in addition to any and all
remedies otherwise available at law.
9. Agency.
9.1 Consultant's authority to bind RCI shall be limited to such
authorization as may be granted by the Chief Executive Officer of STC from time
to time.
10. No Conflicts.
10.1 Consultant hereby represents and warrants that its engagement by RCI
will in no way conflict with or be constrained by any prior or current
engagement, consulting agreement or relationship with any person or entity
whether oral or written. Notwithstanding the preceding sentence, RCI
acknowledges that Consultant intends to devote a portion of its time to other
endeavors.
11. Arbitration. Any dispute or disagreement arising between the parties in
connection with this Agreement, which is not settled to the mutual satisfaction
of the parties within thirty (30) days (or such longer period as may be mutually
agreed upon) from the date that either party
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informs the other in writing that such dispute or disagreement exists, shall be
submitted for arbitration to J.A.M.S./ENDISPUTE, in Hartford, Connecticut, in
accordance with the J.A.M.S./ENDISPUTE Arbitration Rules and Procedures, as
amended by this Agreement. The cost of the arbitration, including the fees and
expenses of the arbitrator(s), will be shared equally by the parties unless the
award otherwise provides. Each party shall bear the cost of preparing and
presenting its case. The parties agree that the arbitrator(s) shall have no
power or authority to make awards or issue orders of any kind except as
expressly permitted by this Agreement, and in no event shall the arbitrator(s)
have the authority to make any award that provides for punitive or exemplary
damages. The decision of the arbitrator(s) shall follow the plain meaning of the
relevant documents, and shall be final and binding upon the parties. The award
may be confirmed and enforced in any court of competent jurisdiction.
12. Notices. Any notices or other communications required or permitted
hereunder shall be in writing and shall be delivered by hand or sent by
certified mail or reputable overnight courier, postage or charges prepaid,
addressed as follows:
If to RCI: Retail Cellular, Inc.
c/o Shared Technologies Cellular, Inc.
000 Xxxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxxxx, XX 00000
Attn: Legal Department
If to RDI: Xxxx Xxxxxx, Esq.
DTR Associates Limited Partnership
000 X. Xxxxxxxx Xxxx Xxxx, Xxxxx 000
Xxxx Xxxxx, XX 00000
or such other address as shall be furnished in writing by any party in
accordance with this Section 12 and any such notice or communication shall be
deemed effective as of the date so given.
13. General.
13.1 No modification of this Agreement shall be valid unless in writing
signed by the parties hereto.
13.2 Neither party may assign this Agreement to any third party without the
prior written consent of the other party. This Agreement shall be valid and
binding upon all heirs, successors and permitted transferees or assigns of the
parties hereto.
13.3 This Agreement shall be governed by the laws of the State of
Connecticut, without giving effect to any principle of conflict-of-laws that
would require the application of the law of any other jurisdiction.
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13.4 In the event of a dispute arising out of this Agreement, the prevailing
party shall be entitled to recovery of its reasonable legal fees and expenses.
13.5 The waiver of any provision of this Agreement shall not be construed as
a continuing waiver of such breach or of other breaches of the same or of other
provisions hereof.
13.6 The section headings of this Agreement are for reference purposes only
and shall not constitute a part hereof or affect the meaning or interpretation
of this Agreement. Whether defined terms are stated in the singular or plural
shall not affect their construction as defined terms.
13.7 All payment obligations, confidentiality and restrictive covenant
provisions, and any other provisions that by sense and context are intended to
survive the termination of this Agreement shall so remain in effect after the
termination hereof until the running of the applicable statute of limitations.
Notwithstanding the foregoing, said restrictive covenant provisions shall
survive for only one (1) year following the termination of this Agreement.
13.8 The parties acknowledge that they have each read this Agreement in its
entirety, understand it and agree to be bound by its terms and conditions.
13.9 This Agreement represents the entire agreement between the parties with
respect to the subject matter hereof and supersedes any and all prior
agreements, discussions and understandings, whether oral or written.
13.11 In the event that any provision(s) of this Agreement shall be declared
invalid, illegal or unenforceable, the validity, legality and enforceability of
remaining provisions and severable portions thereof shall not in any way be
affected or impaired thereby.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
CONSULTANT RETAIL CELLULAR, INC.,
a Delaware corporation
By:/s/ Xxx X. Xxxxxxx By:/s/ Xxxxxxx XxXxxxxxxx
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Retail Distributors, Inc., Xxxxxxx XxXxxxxxxx, Treasurer
a Delaware corporation
Date: 7/16/99 Date: 7/15/99
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