FIRST AMENDED AND RESTATED Exhibit 6.3
CONSULTING AGREEMENT -----------
THIS FIRST AMENDED AND RESTATED AGREEMENT made this 8th day of August,
1997, by and between MEDIA DROP-IN PRODUCTIONS, INC. a Delaware corporation,
("MDI") and 1010 PRODUCTIONS, INC. ("Consultant").
RECITALS
WHEREAS, MDI is a corporation which desires to engage in the audio and
video recording supply and lottery and lodging promotion business (the
"Business"); and
WHEREAS, Consultant is knowledgeable regarding the Business as a result
of prior service with MDI; and
WHEREAS, Consultant is willing to act as a consultant for MDI, and MDI
desires the service of Consultant as a consultant, upon the terms and conditions
herein contained.
NOW, THEREFORE, in consideration of the mutual promises herein
contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, MDI and Consultant agree as
follows:
1. Consulting Services. MDI hereby contracts for the services of
Consultant, as an independent contractor consultant, and Consultant agrees to
render such services, upon the terms and conditions herein contained. Nothing
herein contained shall require Consultant to maintain any fixed schedule or
minimum number of hours of work. The services to be rendered by Consultant are
as follows:
(a) During the term of this Agreement (as defined in Paragraph
2 below) Consultant shall perform the following services: (i) Consultant shall
be available at reasonable times for purposes of telephonic consultation with
MDI, its officers and directors,, with regard to the management and marketing of
the business of MDI and such other areas as MDI may request; (ii) when
reasonably requested, Consultant shall participate in meetings with the
management or the customers or suppliers of MDI, (iii) if requested by MDI,
Consultant shall attend the trade shows listed on Exhibit A, attached hereto and
incorporated herein and such other trade shows in which MDI participates, at the
expense of MDI, including Consultant's transportation, lodging and meal
expenses; and (iv) Consultant shall use reasonable efforts to maintain contacts
in the lottery industry which it has developed during prior service to MDI by
attendance at trade shows listed on Exhibit A, making sales calls to said
contacts and correspondence with said contacts.
In carrying out the foregoing, Consultant shall use its best efforts to
further MDI's interest and not to in any way, directly or indirectly, injure the
reputation of MDI.
(b) Consultant shall faithfully and industriously assume and
perform with skill, care, diligence and attention all responsibilities and
duties imposed upon Consultant under this Agreement.
(c) Consultant shall have no authority to enter into any
contracts binding upon MDI, which would create any obligations on the part of
MDI, except as may be specifically authorized by MDI..
(d) During the term of this Agreement, Consultant shall not
engage and/or perform services of any nature in any capacity for any person,
corporation, partnership or other entity in the Business, provided that the
foregoing shall not in any way restrict or prohibit Consultant from engaging in
any other consulting services, employment or other gainful activity outside of
the Business.
(e) During the term of this Agreement, Consultant shall make
available Xxxxx Xxxxxxxxx-Xxxxxxx to provide the services to be performed under
this Agreement.
2. Term. This Agreement shall be binding and fully enforceable against
the parties immediately upon the execution hereof. The term of this Agreement
(the "Term") shall be for a period commencing on August 1, 1994 and this
Agreement shall terminate on February 29, 2,000 and shall be renewable by
Consultant for two additional one (1) year periods, upon thirty (30) days prior
written notice by Consultant. After the two (2) renewal terms described above,
this Agreement shall automatically renew from year to year, unless either party
gives the other written notice of its intention not to renew this Agreement at
least ninety (90) days prior to the expiration of the original term or any
annual renewal.
3. Compensation.
(a) Consulting Fee. For the consulting services to be rendered
hereunder, MDI shall pay to Consultant during the period from the date hereof
through February 28, 1998, a consulting fee in the amount of Ninety-Six Thousand
Dollars ($96,000.00) payable in equal semi monthly installments of Four Thousand
Dollars ($4,000.00). On March 1, 1998 and on each anniversary thereafter, the
consulting fee shall be increased to an amount equal to the greater of (i) the
salary payable in the previous year increased by five percent (5%) or (ii) the
consulting fee payable in the previous year multiplied by a fraction, the
numerator of which shall be the Consumer Price Index (the "CPI") as of the last
day of the previous twelve (12) month period and the denominator of which shall
be the CPI as of the last day of the second previous twelve (12) month period
(except that to determine the denominator for the adjustment for the second year
of this Agreement, the denominator shall be the CPI as of the date of the
Agreement). In no event, however, shall the consulting fee be increased by more
than ten percent (10%) over the consulting fee for the then immediately
preceding year. The adjusted consulting fee thereby established shall continue
in effect as the consulting fee until again adjusted as herein provided. As used
herein, the term "Consumer Price Index" or "CPI" shall mean the Consumer Price
Index for All Urban Consumers
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("CPI-U"), Hartford, Connecticut, all items (1982-1984 = 100) issued and
published by the Bureau of Labor Statistics of the United States Department of
Labor. In the event that CPI-U ceases to use a 1982-1984 base rate of 100 as a
basis for calculation, or if substantial changes made in the terms or number of
items contained in CPI-U, then CPI-U shall be adjusted to the figure that would
have been arrived at had the manner of computing the CPI-U is in effect as of
the date of this Lease not been altered. If CPI-U is not available, the term
Consumer Price Index shall mean (i) a successor or substitute index to CPI-U,
appropriately adjusted; or (ii) if such a successor or substitute index is not
available or may not lawfully be used for the purposes herein stated, a reliable
governmental or other non-partisan publication selected by Employer evaluating
the information theretofore used in determining CPI-U. The Employer and Employee
may, from time to time, reflect increases and decreases in the Employee's
compensation as may be mutually agreed upon, in accordance with the foregoing,
by evidencing such change in writing signed by both parties.
(b) Consultant Expenses. MDI shall be responsible for all
reasonable expenses of Consultant in connection with the performance of services
under this Agreement. Consultant shall be reimbursed by MDI for out-of-pocket
expenses within thirty (30) days after submission of invoices therefore by
Consultant to MDI. In addition, MDI shall pay to Consultant an automobile
allowance in the amount of One Thousand Dollars ($1,000.00) per month.
4. Independent Contractor Status. Consultant shall perform services for
MDI pursuant to this Agreement as an Independent Contractor and will not for any
purposes be treated as an employee with respect to such services, including for
purposes of federal and/or state taxes. Consultant will pay its self-employment
and any and all income taxes and other taxes of any type or description
whatsoever without withholding or contribution by MDI. Accordingly, it is
recognized by both parties that there will be no withholding by MDI of any FICA,
FUTA or Federal or State income taxes, unless such withholding is required under
any existing or future internal revenue law with respect to payments to
independent contractors. Additionally, Consultant acknowledges that it shall not
be entitled to fringe benefits of any nature, as a result of her serving as a
Consultant pursuant to the terms of this Agreement, including, but not limited,
pension benefits, life insurance, health insurance, paid vacation, use of
company vehicles, or any other benefits similarly offered by MDI to its
employees. Consultant is under the control of MDI as to the result of
Consultant's work only and not as to the means by which such results are
accomplished. This Agreement shall not be construed as a partnership and neither
party hereto shall be liable for any obligation incurred by the other except as
provided elsewhere herein.
5. Records of MDI. Consultant, during the Term of this Agreement, may
work on and be consulted with respect to matters for customers of MDI. All such
matters are highly confidential. Consultant understands and agrees that
Consultant shall acquire no rights to any of this information. All records,
notes, memoranda, files, financial statements, client and customer lists,
brochures, documents and all other similar material relating to MDI or its
business or those of its customers shall remain and be deemed to be the property
of MDI. Consultant shall promptly return any originals and all copies of the
Records to MDI upon request. Upon the termination of this Agreement
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for whatever reason, Consultant shall promptly deliver to MDI the records in its
possession or delivered to or otherwise acquired by her concerning MDI or its
clients.
6. Non-Disclosure. Except with the prior written consent of MDI, which
consent is within the sole discretion of MDI, Consultant agrees that it will not
directly or indirectly, during or after the Term of this Agreement, disclose or
reveal (except as Consultant is required to disclose by court order, summons,
subpoena or similar process of law or to Consultant's attorney in connection
with the foregoing) to or use for itself or others, the confidential information
of MDI or its customers including, but not limited to proprietary information,
secrets, the lists of MDI's customers, the lists of employees of MDI, any secret
or confidential information or data regarding the business of MDI, any secret or
confidential information or data concerning the customers or prospective
customers of MDI. Such business methods and secrets shall include but are not
limited to programs, data systems, processes, computer programs, computer
systems, equipment and configurations, financial information, pricing policies,
names of employees, names of customers, any information contained on any Records
and all other business knowledge and techniques of MDI.
7. Indemnification. Consultant agrees to indemnify, save and hold MDI
and its officers, directors and stockholders harmless from any and all claims
and damages which may arise out of or result from or in connection with any
breach by Consultant of the provisions herein, including, but not limited to
MDI's reasonable attorney's fees and litigation and legal expenses, if MDI shall
prevail in such litigation, provided that if Consultant shall prevail in such
litigation, then MDI shall pay Consultant's reasonable attorney's fees and
litigation and legal expenses. For purposes of the obligations of Consultant set
forth in Paragraph 1 hereof, Consultant shall not be deemed to be in breach of
such obligations, unless MDI shall have given Consultant written notice of the
nature of such breach, and Consultant shall have failed to cure the breach
within fifteen (15) days after receipt of such written notice. MDI shall be
entitled to set-off against the payments due to Consultant under Paragraph 3
hereof, any amounts due from Consultant under this Paragraph 7.
8. Termination.
(a) MDI shall have the right to terminate this Agreement for
"good cause" upon the occurrence of any one of the following conditions or
events:
(i) By the death or disability of the Consultant;
(ii) In the event the Consultant shall fail or refuse
to faithfully or diligent perform the provisions of this Agreement and such
failure is not corrected within thirty (30) days of written notice from MDI;
(iii) In the event that the Consultant is convicted
of a felony;
(iv) The withholding by Consultant of any fees or
income rightfully belonging to MDI.
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For the purposes of said subsection (a)(i) above, "disability" shall
mean a physical or mental illness, which results in Employee not being able to
carry out her duties under this Agreement for a period of six (6) consecutive
months. As of the date of termination, MDI shall be responsible to pay to
Consultant only such fees and expenses due Consultant prior to the date of
termination and MDI shall have no further obligations to Consultant.
(b) Consultant shall have the right to terminate this
Agreement, in its sole discretion upon ninety (90) days prior written notice
(the "Termination Date") of termination to MDI. In such event, MDI shall pay
Consultant any fees and expenses due to Consultant through the Termination Date
within ten (10) days following the termination date.
(i) Consultant shall have the right to terminate
this Agreement at any time for "good reason" upon not less than thirty (30) days
prior written notice to MDI specifying in reasonable detail the reason
therefore. For purposes of this Section 9., "good reason" means any of the
following:
((a)) The failure of MDI, within ten (10)
business days after the Consultant has provided written notice to the Board of
Directors of MDI (with a copy to the President of Command Entertainment, Inc.)
requesting any payment of fees or reimbursable expenses due and owing to the
Consultant hereunder, to make said payment to the Consultant.
((b)) MDI requires the Consultant to be
based at any office or location more than twenty-five (25) miles from the office
at which Consultant is based as of the date of this Agreement, except for travel
reasonably required in the performance and discharge of the Consultant's tasks
and duties hereunder, and unless MDI and Consultant agree that such requirement
shall not constitute "good reason";
((c)) Any failure by MDI Entertainment, Inc.
("Parent") to obtain the assumption of this Agreement by any successor of
Parent;
((d)) Any material change by MDI in the
Consultant's function, duties, or responsibilities from those contemplated
herein, without the prior written consent of the Consultant;
((e)) Any pattern or practice of harassment
or other conduct by the Board of Directors or senior management of MDI or Parent
intended to provoke the Consultant's resignation, or which modifies in any
material adverse respect the manner in which the business of MDI is operated
from the manner in which MDI's business has been operated prior to the date
hereof;
(c) In the event that, on or before February 28, 2002, MDI
terminates the Consultant's services without "good cause" or Consultant
terminates the Agreement for "good
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reason", MDI shall pay to the Consultant or, in the event of the Consultant's
death subsequent to the date of termination or resignation, to the Consultant's
estate, in addition to the fees and reasonable expenses to Consultant prior to
the date of termination (computed pro rata through the date of termination), an
amount equal to the present value sum of the consulting fee fixed at the
consulting fee rate on the date of termination or resignation which the
Consultant would have received through February 28, 2002 had her services not
been terminated or had she not resigned ("Present Value Amount"). The Present
Value Amount shall be payable in twelve (12) consecutive, equal monthly payments
commencing on the fifteenth (15th) day of the month immediately following the
month in which the termination or resignation occurred. In determining the
present value amount, a discount factor equal to the prime rate as published in
The Wall Street Journal shall be used.
9. Default. MDI shall not be deemed to be in default of any of its
obligations to Consultant hereunder, unless and until Consultant shall have
given MDI written notice thereof and MDI fails to cure such default within
fifteen (15) days after receipt of such written notice.
10. Remedies. Consultant acknowledges that violation of any of the
agreements or covenants contained herein could cause irreparable injury to MDI
and there may be no adequate remedy at law for such violation. In the event of a
breach by Consultant of the provisions of this Agreement, MDI shall have the
right, in addition to any other remedies available to it at law or in equity, to
enjoin Consultant or any of Consultant's representatives, agents, employees of
Consultant or the employer of Consultant, in a court of equity from violating
any of the provisions hereof.
This Subsection shall not be construed to limit in any manner
whatsoever any other rights and remedies an aggrieved party may have by virtue
of any breach of this Agreement.
11. Miscellaneous.
(a) This Agreement shall be binding upon and the benefits
shall inure to the heirs, successors and assigns of the parties hereto, subject
to Paragraph 13 (c) below.
(b) All notices provided for under this Agreement shall be in
writing and shall be sufficient if sent by certified mail to the following
listed addresses of the parties hereto or to such other address as shall be
designed in writing to the other party:
MDI: c/o Xxxxxx X. Xxxxxxx, President
000 Xxx Xxxxxx
Xxxxxxxx, XX 00000
With a copy to: Xxxxxxx X. Fine, Esquire.
Xxxxxx, Heyman, Greenberg, Xxxxxxxx
& Belgrad, P.A.
00 X Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, XX 00000
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CONSULTANT: Xxxxx Xxxxxxxxx-Xxxxxxx
1010 Productions, Inc.
0 Xxxx Xxxxxx Xxxx
Xxxxxxxxxx, XX 00000
(c) This Agreement is personal to the parties hereto and may
not be assigned, sold or otherwise conveyed by either of them, except as
follows: (i) MDI may assign or sell its rights hereunder in connection with a
sale of all or substantially all of the assets of MDI, provided that at the time
of such sale, MDI shall be required to satisfy all payment obligations to
Consultant under this Agreement, even if such payments are not yet due; and (ii)
Consultant shall be permitted to assign its rights hereunder to an entity
controlled at least fifty percent (50%) by Consultant, without the consent of
MDI.
(d) The failure of any party hereto to enforce at any time any
of the provisions or terms of this Agreement shall not be construed to be a
waiver of such provision or term, nor of the right of any party thereafter to
enforce such term or provision.
(e) This Agreement constitutes the entire Agreement between
MDI and Consultant regarding rendering consulting services, and there are no
agreements or understandings concerning such Agreement which arc not fully set
forth herein or in other agreements referenced herein.
(f) If any provision of this Agreement is invalid or
unenforceable in any jurisdiction, the other provisions herein shall remain in
full force and effect in such jurisdiction and shall be liberally construed in
order to effectuate the purpose and intent of this Agreement, and the invalidity
or unenforceability of any provision of this Agreement in any jurisdiction shall
not affect the durability of enforceability of any such provision in any other
jurisdiction.
(g) The titles of the paragraphs throughout this Agreement are
for convenience and reference only, and the words contained therein shall in no
way be held to explain, modify, amplify or aid in the interpretation,
construction or meaning of the provisions of this instrument.
(h) Whenever any provision in this Agreement assumes a right
or responsibility to MDI or Consultant after termination of this Agreement said
right or responsibility shall survive the termination of this Agreement.
(i) MDI and Consultant acknowledge that the law firm of
Xxxxxx, Heyman, Greenberg, Xxxxxxxx & Belgrad, P.A. and Xxxxxxx X. Fine, Esquire
solely represent MDI and that Consultant has been previously advised by counsel
for MDI that she should obtain an independent attorney to represent her with
respect to this matter. Employee is hereby on notice and is again being advised
that she should obtain independent legal counsel.
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(j) The provisions of Paragraphs 5 through 7 inclusive and
Paragraph 11 shall survive any termination of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have signed, or caused to be
signed this Consulting Agreement as a document under seal as of the date of
first above written.
WITNESS: MEDIA DROP-IN PRODUCTIONS, INC.
/s/ Xxxxx Xxxxxxxx /s/ Xxxxxx X. Xxxxxxx
----------------------- By:
----------------------------------
Xxxxxx X. Xxxxxxx, President
10120 PRODUCTIONS, INC.
/s/ Xxxxx Xxxxxxxx /s/ Xxxxx Xxxxxxxxx-Xxxxxxx
----------------------- By:
----------------------------------
Xxxxx Xxxxxxxxx-Xxxxxxx, President
GUARANTY
--------
MDI Entertainment, Inc., for the purpose of inducing Consultant to
enter into this Agreement, joins in this Agreement and does hereby absolutely
and unconditionally guarantee to Consultant, her heirs, personal representatives
and assigns, the performance of all covenants and agreements of MDI under this
Agreement, including but not limited to payment of all fees, reimbursable
expenses and Present Value Amount due hereunder.
MDI ENTERTAINMENT, INC.
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------
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