EXHIBIT 10.1
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT dated February 28, 1999 but is effective as
of December 10, 1998 by and between Tel-Com Wireless Cable TV Corporation, a
Florida corporation, having its principal place of business at 0000 X.X. 000xx
Xxxxxx, Xxxxx Xxxxx Xxxxx, Xxxxxxx 00000 (the "Company"), The 5th Avenue
Channel, Inc., a Florida corporation located at the same address, Xxxxxx Xxxxx
("Xxxxx"), with an address of 000 X.X. 000 Xxxxxx, Xxxxx Xxxxx Xxxxx, Xxxxxxx
00000 and Xxxxx Xxxxx (the "Consultant"), with an address of 00 X. 00xx Xxxxxx,
Xxx Xxxx, Xxx Xxxx, 00000.
WITNESSETH:
WHEREAS, the Company, through its wholly-owned subsidiary, 5th Avenue
Channel, Inc. ("5th Avenue"), is introducing "The 5th Avenue Channel," a new
television channel, and "0xxXxxxxxXxxxxxx.xxx," a related Internet web site
offering for sale a variety of products and services (the "Business"); and
WHEREAS, the Consultant is a renowned celebrity and has substantial
knowledge and expertise in the subject matter of the Business; and
WHEREAS, the Company desires to engage the Consultant to perform the
"Consultant's Duties" (as hereinafter defined) and the Consultant desires to
perform said Consultant's Duties, in each case in accordance with the terms and
conditions hereinafter set forth; and
WHEREAS, the parties desire that this Consulting Agreement and the
Share Exchange Agreement, dated as of the date of this Agreement, the ("Share
Exchange Agreement") shall supercede that one certain Shareholder Agreement
executed as of July 16, 1997 by and among the Fifth Avenue Shopping Channel,
Inc., Xxxxxx Xxxxx and Xxxxx Xxxxx.
NOW THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto hereby agree as follows:
1. RECITALS. The foregoing recitals are true and correct and are hereby
incorporated herein by this reference.
2. ENGAGEMENT. The Company hereby engages the Consultant as an
independent contractor to perform the Consultant's Duties (as hereinafter
defined) in accordance with the terms hereof and in exchange for the
"Consultant's Fees" and "Stock Options" (as hereinafter defined), and the
Consultant hereby accepts such engagement.
3. CONSULTANT'S DUTIES. The Consultant agrees to provide to the
Company, at reasonable times requested by the Company subject to the provisions
of paragraph 4 hereof, the following services with respect to the Business (the
"Consultant's Duties"):
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(a) Participation and attendance at up to two (2) cable TV or
other industry trade shows per year as well as a certain limited number of
financial, brokerage, merchandising and other business meetings;
(b) Certain in-person promotional appearances as well as
promotional appearances on live and taped television, in print, and in
other media (including but not limited to the Internet);
(c) Duties as the hostess of The 5th Avenue Channel and
0xxXxxxxxXxxxxxx.xxx, including attendance and participation in certain
videotapings, filmings, audiotapings and broadcasting on television and
other media; and
(d) Subject to the provisions of paragraph 5 below, use of the
Consultant's name and likeness in connection with promotional efforts and events
relating to the Business; provided, however, that all such uses shall be subject
to the prior written approval of the Consultant.
The Consultant shall be based at the Consultant's offices in New York,
New York.
4. REASONABLE NOTICE TO CONSULTANT IN COMPANY'S REQUESTS FOR
FULFILLMENT OF CONSULTANT'S DUTIES. It is the intent of the parties that the
Company will consider Consultant's availability in scheduling meetings or
appearances. In this regard, the Company will use its best efforts to give the
Consultant as much advance notice as possible for any personal or promotional
appearances and any business or financial meetings. The spirit of this Agreement
is that the Company will not abuse the right to use the Consultant's time, and
the Consultant will endeavor to be available at least for those meetings or
events which the Company believes are important in connection with the Company's
business operations and public relations.
5. LIMITATION ON CONSULTANT'S DUTIES AND USE OF CONSULTANT'S NAME.
(a) Notwithstanding anything herein to the contrary, the
Consultant's Duties DO NOT include (i) the Consultant's representation, if any,
of individual merchants appearing on The 5th Avenue Channel or
0xxXxxxxxXxxxxxx.xxx, or (ii) her hosting of or appearances on any commercial
television show which is developed by 0xx Xxxxxx and NOT aired as part of The
5th Avenue Channel or 0xxXxxxxxXxxxxxx.xxx programming or content. The
Consultant's commitment for any such additional services shall be separately
compensated by the Company, under terms to be negotiated in good faith between
the Company and the Consultant.
(b) No Company or 0xx Xxxxxx press releases using the
Consultant's name, image, likeness or any other form of identification, will be
issued without her prior written approval. The Consultant shall have total
approval of any final promotional material in which she or her likeness appears,
including without limitation video or audio tape, voiceovers, posters, photo
shoots, photographs or graphics, or any other use of her likeness or image.
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(c) This Agreement does not confer to the Company or any of
its subsidiaries or affiliates any ownership rights in the trade names "Ivana,"
"Xxxxx Xxxxx," "Ivana, Inc.," "House of Ivana" or any other trademark or trade
name owned by the Consultant presently or in the future.
6. CONSULTANT'S FEES; STOCK OPTIONS.
(a) CONSULTANT'S FEES. In consideration for the performance of
the Consultant's Duties, the Company shall pay to the Consultant the following
fees (collectively, the "Consultant's Fees"):
(i) BASE MONTHLY FEE. The Company shall pay to the
Consultant the sum of $10,000.00 per month during the Term (as hereinafter
defined), payable in advance on the first day of each month.
(ii) FEE FOR PROMOTIONAL PERSONAL APPEARANCES. For
each personal appearance made by the Consultant when 0xx Xxxxxx or the Company
sponsors or co-sponsors an event where the Consultant appears and her name is
used as a draw for the event, the Company shall pay to the Consultant a fee of
$15,000.00 with respect to each appearance which does not require air travel to
the event, and $20,000.00 (plus expenses as set forth in paragraph 6(a)(iii)
below) for each out of town appearance requiring air travel. An event requiring
no air travel shall be an event held in the metropolitan area where the
Consultant is then located.
(iii) FEE FOR ON-CAMERA WORK. After a total of 18
days per year up to and including a total of 24 days per year, of on-camera
appearances and participation in tapings and broadcasts, the Company shall pay
to the Consultant a fee of $5,000 per day and $2,500 per half-day of such
services. For all days after a total of 24 days per year of on-camera
appearances and participation in tapings and broadcasts, the Company and the
Consultant shall negotiate in good faith a "per day" and "per-half-day" fee for
such services. For purposes of this provision, a "day" is defined to mean a
calendar day in which the Consultant attends and participates in an aggregate of
four or more hours of taping or broadcasting and a "half-day" is defined to mean
any calendar day in which the Consultant attends and participates in more than
zero but less than four hours of taping or broadcasting.
(iv) TRANSPORTATION AND TRAVEL. The Company shall
provide to the Consultant executive limousine transportation to and from all
promotional events, and with respect to each appearance requiring travel outside
New York City, the Company shall provide to the Consultant two round-trip,
non-restricted first class airline tickets and luxury hotel accommodations.
(v) REIMBURSEMENT OF OTHER EXPENSES. The Company
shall also pay and/or reimburse the Consultant for reasonable expenses incurred
in connection with the performance of the Consultant's Duties, including
reasonable amounts for hair styling and make-up.
(b) STOCK OPTIONS. The Company agrees to grant to the Consultant, and
to deliver to the Consultant within ten (10) days from the date hereof, a series
of three-year options
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(the "Options") to acquire an aggregate of 700,000 shares of the Company's
common stock, $.001 par value per share (the "Common Stock"), as follows:
(i) 200,000 shares at an exercise price of
$5.00 per share;
(ii) 200,000 shares at an exercise price of
$8.00 per share;
(iii) 200,000 shares at an exercise price of
$12.00 per share; and
(iv) 100,000 shares at an exercise price of
$15.00 per share.
The Company agrees to register such shares for resale by the Consultant
by amending its pending registration statement on Form SB-2, File No. 33-41459,
to include such shares, and shall undertake its best efforts to have such
registration statement declared effective by the Securities and Exchange
Commission as soon as reasonably practicable. Such registration obligation shall
be in accordance with and shall include the indemnification rights contained in
the provisions for registration of the "Tel-Com Shares" under Section 4 of the
Share Exchange Agreement, such terms being hereby incorporated herein by this
reference.
The Options described in this Section 6(b) are in addition to the
35,000 Initial Shares and the 65,000 Performance Shares to be transferred to the
Consultant under the Share Exchange Agreement, dated as of the date of this
Consulting Agreement, to which the Consultant is a party. Exhibit "A" to this
Consulting Agreement sets forth the aggregate number of Shares to which the
Consultant shall have rights under these Agreements.
7. TERM. This Agreement shall commence as of the date hereof and shall
continue to be in effect until December 31, 2001 ("Term"), unless terminated
prior to the end of the Term in accordance with Section 8 of this Agreement.
Thereafter, this Agreement shall be automatically renewed for successive
additional one (1)-year terms ("Renewal Terms") unless either party provides
written notice of non-renewal to the other party not less than sixty (60) days
prior to the expiration of the then current Term or Renewal Term.
8. TERMINATION UPON DEATH. This Agreement shall terminate immediately
upon the Consultant's death. Such termination shall not affect any rights to or
under the Options conferred to the Consultant under Section 6(b) of this
Agreement.
9. INDEPENDENT CONTRACTOR.
(a) This Agreement does not create a relationship of
principal and agent, joint venture, partnership or employment between the
Company and the Consultant. Neither party shall be liable for any obligations
incurred by the other except as expressly provided herein. The Consultant is
retained by the Company only for the purposes of and to the extent set forth in
this Agreement, and the Consultant's relation to the Company during the period
of her engagement hereunder shall be that of an independent contractor. By
virtue of this Agreement, the Consultant does not have employee status with the
Company and is not entitled to participate in any plans, arrangements or
distributions by the Company pertaining to or in connection with any pension,
stock, bonus, profit sharing or similar benefits as may be available to the
Company's employees. The Consultant agrees that she shall be responsible for the
reporting and payment of
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all income and self-employment taxes for all compensation paid to the Consultant
hereunder. Notwithstanding the above, the Consultant also serves as Chairman of
the Board of the Company's 5th Avenue subsidiary and may be compensated as such.
10. CONFIDENTIAL INFORMATION.
(a) The parties contemplate that they may come into
contact with confidential information regarding one or more of the other parties
(or the shareholders, officers, directors, employees, partners, associates,
consultants, customers and clients of the parties), including without limitation
(i) information of a business nature; (ii) information as to sales, customers,
costs, profits, markets, advertising or promotion; (iii) plans for future
development of business; and (iv) other information of a similar nature to the
extent not generally available to the public (all of which is referred to
hereinafter as "Confidential Information"). All parties agree to keep secret all
Confidential Information and further agree not to use such Confidential
Information or to disclose it to anyone, either during or after the Term of this
Agreement except upon the written consent of the other parties or as required by
a court of law.
(b) The foregoing prohibition against disclosing
Confidential Information to third parties shall further apply, either during or
after the term of this Agreement, to Confidential Information and other similar
information relating to the personal lives of the Consultant or the Consultant's
family, or the principal officers and directors of the Company, and their
respective business activities, financial dealings and/or condition, contractual
matters and any other matter affecting the lives of such parties.
11. NON-COMPETITION. As a material consideration and inducement to the
Company to enter into this Agreement, the Consultant hereby covenants and agrees
that, unless the Company and its successors and assigns shall cease to engage in
the Business or unless the Company gives its prior written consent, during the
Term of this Agreement and for a period of six (6) months thereafter, the
Consultant shall not directly or indirectly:
(a) promote any television marketing concept
substantially identical to that of the Company or 0xx Xxxxxx. The Company agrees
and acknowledges that the present activities of Xxxxx Xxxxx, Ivana, Inc. and the
HOUSE OF IVANA, in selling, marketing and/or promoting products and services on
television (including, without limitation, Value Vision, USA, Home Shopping
Channel Canada, QVC London and Germany), her speaking engagements and TV
commercials (e.g., Pizza Hut, Milk and Cotton) are NOT substantially identical
to the Company's 0xx Xxxxxx Channel concept, and that future activities that are
substantially the same as such present activities would also not be considered
to be substantially identical to the Company's 0xx Xxxxxx Channel concept. It is
understood that the Consultant's agreements hereunder are not intended, in any
way, to conflict with her business licensing agreements or other marketing
efforts, including other television marketing efforts such as those described in
this paragraph, or to prohibit her from endorsing, in television commercials or
otherwise, any specific high-end or luxury products.
(b) enter into, operate, own, manage or consult with
(either individually or through any corporation, firm or organization in which
she shall have an interest as an owner, operator, partner or major shareholder)
any other business or venture on the Internet which competes with The 0xx Xxxxxx
Channel's Internet business.
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(c) become a spokesperson for any other Internet site
which might offer luxury or premium brand products or services.
Notwithstanding the above, the Consultant shall not be precluded from conducting
business on her own Web site (or the web site of another party), through House
of Ivana, Inc., Ivana, Inc., or in her individual name where she or the other
web site markets and sells her own lines of cosmetics, jewelry, clothing and
related products and accessories, and products licensed by her. Additionally,
the Consultant shall not be precluded from operating the business of promoting
her new magazine or magazines, books or other publications.
12. INDEMNIFICATION OF THE CONSULTANT. The Company and 0xx Xxxxxx shall
indemnify and hold harmless the Consultant, in her capacity as hostess of The
5th Avenue Channel and as a shareholder, an officer and/or a member of the Board
of Directors of 5th Avenue, from any claims, obligations or liabilities of any
nature (except those arising from her gross negligence or willful misconduct).
13. MISCELLANEOUS.
(a) NOTICES. All notices, demands or other
communications given hereunder shall be in writing and shall be deemed to have
been duly given by hand delivery thereof or by mailing by United States
registered or certified mail, return receipt requested, postage prepaid, to the
address set forth for each party in the first page of this Agreement, or to such
other address or such other person as any party shall designate, in writing, to
the other for such purposes and in the manner hereinabove set forth. A copy of
any notice sent to the Consultant shall be sent to: Xxxx Xxxxx, Esq., 000 Xxxx
Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000.
(b) ENTIRE AGREEMENT. This Agreement constitutes the
complete understanding between the parties with respect to the engagement of the
Consultant hereunder, and no statement, representation, warranty or covenant has
been made by any party with respect thereto except as expressly set forth
herein.
(c) AMENDMENT. The parties hereby irrevocably agree
that no attempted amendment, modification, termination, discharge or change
(collectively, "Amendment") of this Agreement shall be valid and effective,
unless the Company and the Consultant shall unanimously agree in writing to such
Amendment.
(d) NO WAIVER. No waiver of any provision of this
Agreement shall be effective unless it is in writing and signed by the party
against whom it is asserted, and any such written waiver shall only be
applicable to the specific instance to which it relates and shall not be deemed
to be a continuing or future waiver.
(e) HEADINGS. The headings set forth in this
Agreement are for convenience only and shall not be considered as part of this
Agreement in any respect nor shall they in any way affect the substance of any
provisions contained in this Agreement.
(f) BINDING EFFECT; NO ASSIGNMENT. This Agreement
shall be binding upon the parties hereto, their administrators, successors and
assigns. Any assignment or delegation of duties in violation of this provision
shall be null and void; provided, however, Consultant may
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assign this Agreement to a corporation of which she is the sole shareholder and
provided further, that in the event of such assignment, Consultant shall
continue to be personally responsible for the rendering of services hereunder.
Nothing in this Agreement shall prohibit the Consultant from transferring her
Option Shares to a third party.
(g) FURTHER ASSURANCES. The parties hereto will
execute and deliver such further instruments and do such further acts and things
as may be reasonably required to carry out the intent and purposes of this
Agreement.
(h) PROVISIONS SEVERABLE. This Agreement is intended
to be performed in accordance with, and only to the extent permitted by, all
applicable laws, ordinances, rules, and regulations of the jurisdiction in which
the parties do business. If any provision of this Agreement, or the application
thereof to any person or circumstance shall, for any reason or to any extent, be
invalid or unenforceable, the remainder of this Agreement and the application of
such provision to other persons or circumstances shall not be affected thereby,
but rather shall be enforced to the greatest extent permitted by law.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
COMPANY:
TEL-COM WIRELESS CABLE TV CORPORATION,
a Florida corporation
/S/ XXXXXX XXXXX
---------------------------------------------
By: Xxxxxx Xxxxx
Its: President
THE 0XX XXXXXX XXXXXXX, XXX.,
a Florida corporation
/S/ XXXXXX XXXXX
---------------------------------------------
By: Xxxxxx Xxxxx
Its: President
CONSULTANT:
XXXXX XXXXX
/S/ XXXXX XXXXX
--------------------------------------------
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EXHIBIT "A"
Under the Consulting Agreement:
Option Shares 700,000
Under the Share Exchange Agreement:
Initial Shares 35,000
Performance Shares 65,000
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