EXHIBIT 10.9
CONSULTING AGREEMENT
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This Agreement by and between United Road Services, Inc., ("Company") and Xxxx
Xxxxx ("Consultant") is entered into as of the consummation of the initial
public offering of the Company.
1. Engagement and Scope. The Company hereby engages Consultant and Consultant
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hereby accepts the engagement upon the terms and conditions hereinafter set
forth. Consultant shall consult, advise and assist the Company with respect to
towing, auto transport and related opportunities and its efforts to identify,
locate, evaluate, and acquire entities or their assets in these businesses.
Consultant shall perform such duties in connection with this engagement as the
Company or corporations affiliated with the Company may reasonably require.
Consultant, along with, Xxxx Xxxxxxxxx, shall have the exclusive right to
receive bonus compensation fees as provided in Xxxxxxxxx 0x below for URSI
acquisitions during the term of this Agreement in the geographic area set forth
on Appendix I. In addition, Consultant shall have the exclusive right to
receive bonus compensation fees as provided in Xxxxxxxxx 0x below for URSI
acquisitions of companies whose primary business is the provision of towing and
transport services for Insurance Auto Auctions.
2. Term. Subject only to the provisions for termination set forth in Paragraph
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6 below, the term of Consultant's engagement hereunder to acquire towing, auto
transport and related businesses shall be for a period of three years beginning
on the date hereof, which will be automatically renewed for additional one year
terms thereafter unless the Company or Consultant terminates the Agreement with
at least thirty (30) days advance written notice.
3. Compensation.
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a. The Company shall reimburse Consultant for all ordinary and necessary
business expenses lawfully and reasonably incurred by Consultant in the
performance of his services pursuant to this Agreement. Such expenses may
include but are not necessarily limited to (i) telephone, photocopying, and
facsimile charges as well as postal and courier charges incurred on behalf of
the Company, (ii) economy class airfare, and (iii) reasonable hotel, meals, and
automobile travel expenses exclusively incurred for the benefit of the Company.
For the avoidance of doubt, all such expenses are subject to allocation if
incurred in part for third parties, personal purposes, or otherwise not
specifically and directly related to or exclusively incurred in furtherance of
Consultant's objectives under this Agreement.
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b. All reimbursable expenses shall be appropriately documented in
reasonable detail by Consultant upon submission of any request for
reimbursement, which submission shall be submitted monthly for any such expenses
incurred in the prior month. All documented expenses will be available and
subject to review and audit from time to time upon request by the Company.
c. In addition to the reimbursement of expenses provided for in
subparagraph (a) above, the Company agrees to pay Consultant a bonus consulting
fee, which shall be equal to two percent (2.0%) of the last twelve months
acquired gross revenues following completion of any acquisition entered into by
the Company or an affiliate of the Company resulting from the efforts and
services of Consultant during the period of Consultant's engagement hereunder.
To the extent that any acquisition is consummated by the Company and there is a
dispute between Consultant and any other party or parties regarding the payment
of the above-stated bonus consulting fee for such acquisition, then the Company,
in its sole discretion, will allocate such bonus consulting fee between
Consultant and such other party or parties to reflect the respective effort of
each such party in bringing such acquisition to completion. The above-mentioned
bonus consulting fees shall be distributed to Consultant within 30 days after
closing.
d. Any payment to Consultant contemplated hereunder shall be net of
applicable taxes, if any, whether income, sales, or otherwise which the Company
is required by law to withhold.
4. Extent of Service. Within the scope of the engagement, Consultant shall
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devote such time, attention and energy to the business of the Company, and
corporations affiliated with the Company, as shall be reasonably required in
order for Consultant to meet his objectives hereunder. The Company anticipates
that Consultant's efforts hereunder on an annual basis shall result in completed
acquisitions with an annual revenue goal which is mutually agreeable to
Consultant and Company. Consultant shall not commit any act, or make any
statement, which would be deleterious to the reputation and goodwill of the
Company or corporations affiliated with the Company. Outside the scope of the
engagement and excluding competitors of the Company, Consultant shall be free to
undertake other unrelated activities for remuneration on behalf of third
parties. A "competitor" of the Company for the purpose of this Agreement is
another company, partnership, entity, or person engaged in the towing, recovery
or auto transport business or providing any component aspect thereof.
Activities described on Schedule 13.1 to that certain Agreement and Plan of
Reorganization among the Company, Consultant and Absolute Towing and
Transporting, Inc. (the "Reorganization Agreement") shall not constitute a
violation of this Section 4.
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5. Disclosure of Information. Consultant recognizes and acknowledges that he
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will have access to certain confidential information of the Company, and of
corporations affiliated with the Company, and that such information constitutes
valuable, special, and unique property of the Company, and such other
corporations. Consultant will not, during or after the term of this Agreement,
disclose any of such confidential information to any person, firm, corporation,
association or other entity, unless it is in the public domain or required by
law, except to authorized representatives of the Company and corporations
affiliated with the Company, for any reason or purpose whatsoever, or use such
information, other than in furtherance of this Agreement upon the written
authorization of the Company. In the event of a breach or threatened breach by
Consultant of the provisions of this paragraph, the Company, and corporations
affiliated with the Company, shall be entitled to injunctive relief or other
judicial restraint prohibiting Consultant from disclosing, or using, in whole or
in part, such confidential information. Nothing herein shall be construed as
prohibiting the Company, and corporations affiliated with the Company, from
pursuing any other remedies available to them for such breach or threatened
breach, including the recovery of damages from Consultant. The provisions of
this Paragraph 5 shall survive the dissolution or termination of this Agreement.
6. Termination.
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a. In the event Consultant materially fails to observe or perform any of
the written duties required of him under this Agreement, or otherwise violates
the provisions of the Agreement, the Company may immediately terminate
Consultant's engagement under this Agreement subsequent to a written
notification of the material failure to perform, as per section 11, and a
reasonable period of time for corrective action.
b. Without cause, the Company may terminate Consultant upon six (6) months
prior written notice by the Company. In such event, the Company shall continue
to pay Consultant the compensation reflected in subparagraph 3(c) accrued prior
to such termination.
c. In the event of change in control of the Company, this Agreement shall
immediately terminate, provided, however, all outstanding amounts of advance
draw, bonus consulting fees, and expenses that arose prior to such change of
control shall become due and payable, in addition to a severance payment equal
to sixty (60) days pro-rata share of annual advance draw compensation. For the
purposes of this Agreement, a "change in control" of the Company shall be deemed
to have occurred if: (i) any person (other than any employee benefit plan of
the Company and its subsidiaries of the Company or any
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person organized, appointed, or established pursuant to the terms of any such
benefit plan) is or becomes the beneficial owner of securities of the Company
representing at least 50% of the combined voting power of the Company's then
outstanding securities, or (ii) there shall be consummated (x) any
consolidation, merger, share exchange or other business combination of the
Company in which the Company is not the continuing or surviving corporation or
pursuant to which shares of the Company's capital stock would be converted into
cash, securities, or other property, other than any of the foregoing events in
which the holders of the Company's capital stock immediately prior to such event
own not less than fifty percent (50%) of the capital stock of the surviving
corporation immediately after such event, or (y) any sale, lease, exchange, or
other transfer (in one transaction or a series of related transactions) of all,
or substantially all, of the consolidated assets of the Company.
d. In the event of a termination of Consultant's engagement in accordance
with the provisions of subparagraph (a) above, the Company shall have no further
obligation to Consultant, other than the amount owed to Consultant under 3(a)
and 3(c).
e. In the event of a pending acquisition which has not been consummated
prior to termination of Consultant's engagement by the Company in accordance
with the provisions of (b) or (c) above, and the acquisition is in fact
consummated no later than six (6) months after the termination of this
Agreement, the obligation of the Company to pay the bonus consulting fee
described in paragraph 3(c) above shall survive the termination of this
Agreement. For the avoidance of doubt, after said six (6) month period, any
outstanding obligation to Consultant pertaining to a pending acquisition shall
terminate.
f. Upon termination of this Agreement, for whatever reason, Consultant
will promptly deliver to Company all originals and copies, whether in note,
memo, or other document form or on film, video, audio, or computer tapes or
discs or otherwise of confidential information of the Company and of
corporations affiliated with the Company that are in Consultant's possession,
custody, or control whether prepared by Consultant or others. Confidential
information includes, but is not limited to, the name of any person, entity,
company, or business all or any part of which is or at any time was a candidate
for a potential acquisition by or joint undertaking with the Company (whether or
not through the introduction or efforts of Consultant), together with all
analysis and other information which Consultant or the Company has generated,
received, compiled, or otherwise obtained or possesses with respect to such
potential acquisition or joint undertaking.
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g. In case of a dispute there will be no right of offset by Company for
any fees or expenses due to Consultant referred to in section 3.
7. Limit of Engagement. This Agreement does not and shall not be construed to
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create any partnership or agency whatsoever beyond the purposes set forth in
Paragraph 1 above. Consultant acknowledges and agrees that he is an independent
contractor vis-a-vis the Company and that Consultant shall not be deemed to be a
partner, employee, agent, or legal representative of the Company for any purpose
other than the purposes of this Agreement set forth in said Paragraph 1, nor
shall Consultant have any authority or power to act for, or to undertake any
obligation or responsibility on behalf of, the Company, or corporations
affiliated with the Company, other than as expressly herein provided.
Consultant represents and warrants that he is engaged independently in the field
of business prospect qualification and the service sought by the Company under
this Agreement, and conducts a business enterprise independent of the Company.
Further, Consultant acknowledges and agrees that the amounts paid under
Paragraph 3 hereof are in full satisfaction of all amounts due by the Company
for services rendered by Consultant hereunder and the Consultant disclaims any
right, title, or interest in employee benefits offered by the Company or other
compensation without regard to the reclassification or other characterization of
Consultant's relationship with the Company at a future point in time by any
Federal, State, or local government or agency.
8. Unauthorized Acts.
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a. Consultant represents and agrees with the Company that he will make no
disbursement or other payment of any kind or character out of the compensation
paid to him hereunder or with any other fund, or take or authorize the taking of
any other action which contravenes any statute or rule, regulation, or order of
any jurisdiction. Consultant further agrees to indemnify and save harmless the
Company, its subsidiaries and affiliates and their directors, officers, and
employees from any and all liabilities, obligations, claims, penalties, fines or
losses resulting from any unauthorized or unlawful acts of Consultant (or from
any violations by Consultant of any laws or regulations, whether willful or not)
except to the extent such acts were undertaken at the direction of the Company.
Consultant further represents and warrants that under no circumstances shall
Consultant solicit or accept either directly or indirectly any form of
remuneration from any third party including but not limited to any business
owner or broker for or related to the performance of Consultant's service
hereunder. The provisions of this Paragraph 8 shall survive the dissolution or
termination of this Agreement.
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b. The Consultant agrees to disclose honestly and fully all information
and documentation in his possession concerning all transactions or events
relating to or affecting the Company or any affiliate of the Company as and to
the extent such information or documentation (i) was acquired or developed by
Consultant during his engagement under this Agreement and (ii) is requested by
the Company or the authorized representative thereof.
9. Conflict of Interest. Subject to Section 13 of the Reorganization
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Agreement, during the term of this Agreement, Consultant agrees that he will
represent the Company within the scope of the engagement and that he will not
perform similar consulting services within the scope of the engagement for any
competitor of the Company which services Consultant acknowledges and agrees
would give rise to a serious and damaging conflict of interest; provided,
however, Company may engage other consultants and Consultant may otherwise be
engaged by third parties (excluding competitors) outside of the scope of
Consultant's engagement hereunder.
10. Pending Acquisitions and Geographical Noncompetition. It is recognized
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that pending acquisitions may not have been consummated prior to the expiration
or termination of this Agreement. Therefore, it is mutually agreed that the
parties shall identify in writing on or about the date of expiration or
termination of the Agreement, all geographical areas in which such acquisitions
have been actively pursued by Consultant and in which such acquisitions may be
pending. Consultant agrees that, subject to Section 13 of the Reorganization
Agreement, he will not consult with, represent, or be employed by any
competition of the Company with respect to (i) such geographical areas
(determined by county together with a buffer zone of 20 miles from the outside
perimeter thereof); and (ii) any pending acquisition prior to one (1) year after
the expiration or termination of the Agreement, without first obtaining the
written approval of the Company. Notwithstanding the foregoing, in the event of
change in control of the Company (as defined above herein), the restrictions
reflected in this Paragraph 10 shall be null and void.
11. Notices. Any notice required or permitted to be given under this Agreement
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shall be in writing and shall be deemed to have been given seven (7) days after
deposited with the United States postal service in a postage prepaid envelope
addressed, if to the Consultant, at Absolute Towing and Transporting, Inc., 0000
Xxxxxx Xxxxxx Xxxx., Xxxxx Xxxxxxxxx, C.A. 91605 and if to the Company, x/x
Xxxxxxxxx Xxxxxxxxx, Xxxxxx Xxxx Services, Inc., 0 Xxxxxxxxxx Xxxx, Xxxxxx, X.X.
00000 or to such other address as either party shall designate by written notice
to the other.
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12. Assignment. Consultant may not assign his rights or obligations hereunder.
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The rights and obligations of the Company hereunder shall insure to the benefit
of, and shall be binding upon the successors and assigns of the Company.
13. Miscellaneous.
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a. This Agreement shall be subject to and governed by the laws of the
State of New York. The parties submit to the exclusive jurisdiction of the
State and Federal Courts located in the State of New York if a lawsuit is filed
by Consultant and to the exclusive jurisdiction of the State and Federal Courts
located in the State of California if a lawsuit is filed by the Company.
b. Failure to insist upon strict compliance with any provision hereof
shall not be deemed a waiver of such provision or any other provision hereof.
c. This Agreement may not be modified except by an agreement in writing
executed by the parties hereto.
d. The invalidity or unenforceability of any provision hereof shall not
affect the validity or enforceability of any other provision.
e. Consultant represents and warrants that entering into this Agreement
and the performance of Consultant's services hereunder shall not be in violation
of any other agreement with any third party to the best knowledge of Consultant.
f. This Agreement supersedes all previous agreements and any written or
oral addendum thereto between the Company and any of its affiliated companies
and representatives and Consultant, both verbal and written.
g. If Company breaches section 3 of this agreement, Consultant will have
the right to terminate the agreement immediately, upon written notice, according
to section 11, and the Company remains responsible for any payment for
remuneration referred to in section 3, until the date of termination.
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IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the
day and year first above written.
"Consultant" United Road Services, Inc.
By: By:
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Xxxx Xxxxx Xxxxxx X. Xxxxxxx
Title: Chief Executive Officer
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APPENDIX I
The exclusive geographical region shall consist of the following California
counties:
Los Angeles
Xxxx
Xxxxxxx
San Bernardino
Riverside
Orange
San Diego
Imperial
Santa Xxxxxxx
San Xxxx Obispo
Notwithstanding the foregoing, Consultant shall not be entitled to any
compensation under the Consulting Agreement for URSI transactions with any of
the following entities: XxXxxxxx & Sons, U.S. Tow, Doug's Tugs, Xxxx & Wags,
A&A Towing, Elite Towing, E&R Towing and Garage Inc.
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