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EXHIBIT 6.11
AGREEMENT AND CONTRACT
AGREEMENT made as of this 22nd day of June, 1998, between
MegaWorld Leisure, Inc., 000 Xxxx Xxxxxx, Xxx Xxxx, X.X. 00000 (the
Company)
and
Mr. Xxxxxxx Xxxxxx, d/b/a Global Marketing Group, Ltd. (GMG), 000 Xxxx
00xx Xxxxxx, Xxxxx 0000, Xxx Xxxx, X.X. 00000 (the 'Employee')
WITNESSETH
WHEREAS, the Company desires to employ Xx. Xxxxxx of (GMG) as an
executive officer with the title of President; and
WHEREAS, Xx. Xxxxxx is prepared to accept such employment and to
perform services on behalf of the Company, and to execute this Agreement, upon
terms and conditions contained herein.
In consideration of the conditions contained and for good and valuable,
consideration, the parties agree as follows:
1. The Company, MegaWorld Leisure, Inc., is a wholly owned subsidiary of
MegaWorld, Inc. (MEGW), and will be headed by Xxxxxxx Xxxxxxxx as Chairman. Mr.
Xxx Xxxxxx will be offered a seat on the Board of Directors of MegaWorld
Leisure, Inc. The role of MegaWorld Leisure, Inc. will be to develop and manage
time-share properties in a profitable and growth orientated manner.
2. This enterprise will own, lease, franchise, operate and market time-share
units and those properties (castles, chateau's, resorts and hotels) which the
Company currently owns and/or will subsequently acquire.
3. MegaWorld Inc., will properly fund its subsidiary MegaWorld Leisure, Inc. and
this funding will include certain costs for site improvements including but not
limited to; public areas, property upgrade unit decoration, model units, the
Welcome Center, etc. The Company will also fund the required marketing materials
and lead generation as standard procedure within the timeshare industry for a
project of this type.
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4. The first property-to be developed will be the Castello Torre Xxxxx located
in northern Italy, Xx. Xxxxxx and his group will initiate development, marketing
and sales on the existing units. MegaWorld Leisure, Inc. will expand the
property to additional 100 units (or more) which will generate sales of 5,000
memberships priced at US $17,500 to US $35,000 gross per time-share unit. Xxxxxx
will initiate the sales as soon as possible, and will start with Charter Member
prices of US $15,000. Xx. Xxxxxx will also create a Class 'B' membership that
can accommodate up to an additional 10,000 Castello Club Members.
Xx. Xxxxxx'x responsibilities under this contract will include but not be
limited to the following;
(a) Defining the "Mission Statement" of MegaWorld Leisure.
(b) Preparing the relevant Marketing Concepts and Plans for each
property.
(c) Executing and managing these plans.
(d) Recruiting and managing various Project Directors.
(e) Identifying new projects and properties for the Company.
(f) Conceiving, defining and producing all necessary marketing and
promotional materials, starting with the Castello Torre Xxxxx
project.
5. The Board of MegaWorld, Inc. will be guided by Xx. Xxxxxx'x recommendations,
however the final decision will be only taken and approved by The Board of
MegaWorld, Inc.
6. Subject to the terms and conditions of this Agreement, the Company enters
into a three (3) year contract with Xx. Xxxxxx whereby Xx. Xxxxxx and (GMG) will
act as consultants and advisers to MegaWorld Leisure, Inc. to develop the
marketing and sales of time-share units for properties currently owned and/or to
be acquired by MegaWorld Leisure, Inc. or the parent company MegaWorld, Inc.
7. The Company employs Xx. Xxxxxx (GMG) and Xx. Xxxxxx and (GMG) agree to serve
the Company, during the term and subject to the supervision of the Company's
elected Board of Directors, as the President of the Company, to perform the
duties listed plus other duties assigned to Xxxxxx by the Board of Directors
provided these duties are consistent with the position of a senior executive
officer.
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8. Subject to supervision of the Board of Directors Xx. Xxxxxx shall, during the
term perform duties and services for the Company, as are normally performed, by
a senior executive officer in charge of marketing and sales of a timeshare
company. During the term Xx. Xxxxxx shall devote his time to the business and
affairs of the Company. Xxxxxx shall, during each year be entitled, without loss
of pay, to 4 weeks paid vacation at such time as shall be mutually acceptable
to the Company and Xx. Xxxxxx.
9. Xx. Xxxxxx shall perform his services at the Company's New York office, or at
other locations as the Company shall designate and at Global Marketing Group's
office at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx.
10. The term of this Agreement is for three years and then renewable annually.
The term of this Agreement shall be for the period commencing on the date hereof
and ending on July 31, 2001. At the expiration of this term, this Agreement,
shall be automatically renewed and extended for successive one year periods
(hereinafter "Renewal Periods") unless canceled, in writing to Xx. Xxxxxx, by
the Board of MegaWorld Leisure Inc, or the Board of MegaWorld, Inc.
11. In consideration for services rendered by Xx. Xxxxxx (GMG) for the benefit
of the Company the Company shall compensate Xx. Xxxxxx as follows;
(a) The Company shall pay Xx. Xxxxxx the sum of US $10,000 payable per
month ("Base Compensation") for each month commencing July 1, 1998.
This amount to be paid US $4,000 on the first day of each month, and
US $4,000 on the 15th day of each month (or closest date if 1st and
15th falls on a weekend or holiday. The additional sum of US $2,000
per month will be paid retroactively after MegaWorld Leisure; Inc. has
completed sales of 100 time-share units.
(b) The Company shall pay to Xx. Xxxxxx, a commission equal to two and one
half percent (2-1/2%) on Gross Sales received by the Company. Payment
of this amount will be due and payable 90 days in arrears. For
purposes of this Agreement the term "Gross Sales" shall mean the sum
of; cash payments, cash down payments and money's received by the
Company from sales either factored or financed by the Company.
(c) A stock option of 400,000 Shares of MegaWorld 144 Legend Stock will be
offered to Xx. Xxxxxx upon his signing of this Agreement, at a
notional price of US $3.50. This notional price will reduce by a
percentage basis to reflect the achievement of the minimum sales
revenue achieved within three years (3) years of the date of this
contract. If the minimum sales target (US $15,000,000) is achieved
then the actual price for each share of MegaWorld 1,44 Legend Stock
will be US $0.01. If fifty percent (50%) of the sales target us
achieved, the purchase price of this 144 Legend Stock will be US $1.75
(details in final
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contract to be more specific).
(d) Additional income/stock to be derived as Xx. Xxxxxx develops new
profit centers for, the Company. The amount and type of this
additional compensation will be decided by the Board of MegaWorld,
Inc. and may be along the lines of Xx. Xxxxxx'x compensation in this
Agreement.
(e) Should Xx. Xxxxxx and his group fail to achieve a level of US
$7,500,000 in time-share sales in the course of 3 years, the Board of
MegaWorld Leisure, Inc., at its sole discretion, will decide the price
and amount of the stock, which may be offered to Xx. Xxxxxx.
(f) If during the term Xx. Xxxxxx shall be the procuring cause of an
investor providing the Company an equity investment in any transaction
in which the Company has an interest, the Company will pay to Xx.
Xxxxxx, a bonus ("Equity Compensation") in an amount TBD.
(g) If during the term Xx. Xxxxxx shall be the procuring cause of an
investor of a financial institution providing the Company with the
proceeds of debt in any transaction in which the Company has an
interest, the Company shall pay to Xx. Xxxxxx a bonus in an amount to
be determined by the Company.
(h) If during the term Xx. Xxxxxx shall be the procuring cause for the
Company to enter into a transaction in which the Company has an
interest, the Company and Xx. Xxxxxx shall, prior to the acquisition
of any such interest by the Company, agree upon the compensation to be
paid to Xx. Xxxxxx.
12. The Company shall reimburse Xx. Xxxxxx for all ordinary and necessary
expenses including and without limiting the generality of the following;
entertainment, travel, office items, delivery services, phone, fax and like
expenses which Xxxxxx may incur in connection with performance of his duties for
the Company (in accordance with the guidelines of the Internal Revenue Service
for the deductibility of business expenses). These expenses shall be reimbursed
to Xx. Xxxxxx within 10 days upon his presenting receipts and statements for
expenditures above US $25 in accordance with procedures of the Company.
13. During period of illness or other incapacity or disability preventing Xxxxxx
from performing his duties, Xx. Xxxxxx shall be entitled to receive full
compensation, provided Xx. Xxxxxx is prevented from performing the duties
required by him for a continuous period of 120 days, then the compensation to
which Xx. Xxxxxx shall be entitled shall be one-half that specified in paragraph
11(a) and, if Xx. Xxxxxx shall be prevented from performing his duties for a
continuous period of 240 days, then the Company shall have the option, on sixty
(60) days written notice given to Xxxxxx after 240 days, to terminate
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this Agreement If the Company elects to exercise said option and terminate this
Agreement it shall be obligated to pay Xx. Xxxxxx his commissions due for the
time employed including the 240 day extension. This provision continuous to
the end of the term (June 30, 2001).
14. Xx. Xxxxxx may continue to engage in business activities, which are
non-competitive with MegaWorld, Inc. or any of its present or future
subsidiaries.
15. In addition to the above, Xx. Xxxxxx shall be entitled to all rights and
benefits for which any salaried executive of the Company shall be eligible
including any profit sharing, pension plans, stock option or stock purchase plan
and medical benefits of other plan for the payment of benefits to employees of
the Company. Xx. Xxxxxx has option to utilize his own Major Medical Plan and the
Company shall compensate Xx. Xxxxxx $850 per month for medical coverage if Xx.
Xxxxxx elects to use his own Major Medical Plan during the term of this
Agreement.
16. Any notices given by either party to the other shall be in writing and be
hand delivered or mailed, first class mail, postage prepaid, certified, return
receipt requested, to the respective party at the address indicated on the first
page of this Agreement.
17. Any disputes, claims or controversies arising from this Agreement shall be
submitted to and settled by binding arbitration to be held in the City of New
York, State of New York in accordance with the rules and regulations of the
American Arbitration Association, and the award of the arbitrators shall be
enforceable. Any such arbitration shall be held before three arbitrators, one
designated by Xx. Xxxxxx, one designated by the MegaWorld, Inc., and one
designated by the other two arbitrators. The prevailing party in any such
arbitration shall be entitled to reimbursement for all costs and expenses
incurred in connection with such arbitration including, reasonable Attorney's
fees.
18. This Agreement sets forth the entire Agreement between the parties and shall
be governed in accordance with the laws of New York, and cannot be altered,
amended, modified, terminated or rescinded (except as noted in 10 above) except
in writing executed by both of the parties, and shall inure to the benefit of,
and be binding upon, the parties hereto and their respective successors,
transferees, heirs, assigns and beneficiaries.
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IN WITNESS THEREOF, the parties hereto have executed this Agreement as of this
22nd day of June 1998.
/s/ Xxx Xxxxxx
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MR. XXX XXXXXX
President
GLOBAL MARKETING GROUP, INC.
/s/ Xxxxxxx Xxxxxxxx
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XXXXXXX XXXXXXXX
Chairman
MEGAWORLD LEISURE, INC.
/s/ Xxxxx Xxxx
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XXXXX X. XXXX
Chief Operating Officer
MEGAWORLD, INC.
