CONSULTING AGREEMENT
THIS AGREEMENT ("Agreement"), made as of the 8th day of December 1999, by
and between AMERICAN KIOSK CORPORATION, a Delaware corporation, having offices at
0000 XXX Xxxxxxxxx, Xxxxx 000, Xxxx Xxxxx Xxxxxxx, XX 00000 (the "Company"), and
XXXXXX XXXXXXXX, an individual with an address at ______________________________,
______________ ("Xxxxxxxx").
WHEREAS, pursuant to that certain Asset Purchase Agreement of even date herewith
(the "Agreement"), the Company is acquiring substantially all of the assets of Zero's Mr.
Submarine, Inc., a Virginia corporation, which franchises submarine sandwich shops (the
"Business"); and
WHEREAS, the Company desires to secure the continued consulting services of
Xxxxxxxx in connection with the Business and Xxxxxxxx desires to continue to provide such
services to the Company as set forth of Schedule A annexed hereto;
NOW, THEREFORE, in consideration of the mutual promises contained herein, the
parties hereto agree as follows:
1. Xxxxxxxx hereby agrees that he will render to the Company, as requested by the
Company, such services as the Company shall reasonably request with respect to the operation
of the Business (the "Services").
2. The term of this Agreement shall commence as of December 8, 1999 and shall
continue for a period of five (5) years through December 7, 2004 (the "Term").
3. In partial consideration of the Services to be rendered and performed by
Xxxxxxxx during the Term, the Company hereby agrees to pay Xxxxxxxx an aggregate of
$375,000 as follows: $75,000 within ninety (90) days hereof; $75,000 on December 8, 2000;
$75,000 on December 8, 2001; $25,000 on December 8, 2002; and $75,000 on December 9,
2003.
Xxxxxxxx will have the right to forego his cash compensation and receive that
number of shares of the common stock in the Company that could be purchased at a discount
of 25% of the fair market value of the stock as determined by the public market place on the
date said payment is to be made. This option shall apply to each annual payment to be made
by the Company to Xxxxxxxx.
In the event of a default of any of the aforementioned annual payments, after
expiration of all applicable cure periods, or in the event that the Company uses funds from the
Company's pending private placement of securities in a manner which is materially
inconsistent with the Intended Use of Proceeds form to be delivered to Xxxxxxxx prior to such
financing, without the prior written consent of Xxxxxxxx, Xxxxxxxx shall be granted a security
interest in the revenue stream from the franchises acquired by the Company pursuant to the
Agreement.
4. As additional compensation for the Services to be rendered by Xxxxxxxx during
the Term, the Company hereby grants Xxxxxxxx the following options to purchase shares of the
Company's common stock:
# of shares exercise price Vesting
55,666 $1.00 At issuance
55,667 $2.00 1 Year from issuance
55,667 $3.00 2 Years from issuance
Total: 167,000
These options shall expire five years after vesting. Following the vesting dates, the
Company hereby agrees that it shall review the exercise prices of the options as they relate to
the market value of its shares of common stock on such dates with a view towards adjustment
(downward only) if so warranted.
5. Xxxxxxxx will use his best efforts to perform the Services for the Company in a
timely and professional manner, subject to his commitments and obligations to other businesses
for which he performs services, and he shall make himself personally available to the Company
in connection with his performance of the Services.
6. Xxxxxxxx agrees that neither he nor his employees, affiliates or agents will,
during the Term, or at any time thereafter, disclose or divulge or use, directly or indirectly,
for his own, or their own, benefit, any confidential information, data, trade secrets, or similar
information relating to the Company or any of its subsidiaries or to the businesses of the
Company or any of its subsidiaries obtained in connection with the performance of the
Services. The provisions of this paragraph shall survive the termination of this Agreement and
shall continue until such information, data, trade secrets, or similar information becomes
public knowledge through no fault of Xxxxxxxx or any of his employees, affiliates or agents.
7. As a consultant under the terms or this Agreement, Xxxxxxxx may at all times
reasonably rely upon the information supplied to Xxxxxxxx by the Company's authorized
officers, directors, agents and employees as to accuracy and completeness. Therefore, the
Company agrees to indemnify, hold harmless and defend Xxxxxxxx, his employees and agents
from and against any and all claims, actions, proceedings, losses, liabilities, costs and expenses
(including, without limitation, reasonable attorneys' fees), incurred by any or all of them in
connection with or as the result of any inaccuracy, incompleteness or omission of information
given to Xxxxxxxx by such authorized personnel of the Company, unless such misstatement or
omission is the result of any inaccurate, incomplete or erroneous information published by
Xxxxxxxx through no fault of the Company or its personnel or agents.
8. Xxxxxxxx agrees to indemnify, hold harmless and defend the Company and its
subsidiaries, and the directors, officers, employees and agents of the Company and its
subsidiaries, from and against any and all claims, actions, proceedings, losses, liabilities, costs
and expenses (including, without limitation, reasonable attorneys' fees), incurred by any or all
of them in connection with or as the result of any inaccurate or incomplete statements or
omission made by Xxxxxxxx or his employees, affiliates or agents.
9. In the event an action or proceeding is commenced with respect to this
Agreement, the prevailing party shall be entitled to receive payment from the other party of its
reasonable legal fees and expenses.
10. This Agreement may be terminated by Xxxxxxxx upon thirty (30) days' prior
written/fax notice to such effect. In the event Xxxxxxxx elects to so terminate this Contract, the
provisions of Paragraphs 6 and 8 shall survive such termination indefinitely.
11. This Agreement may not be assigned (including by operation of law) by either
party hereto and shall be interpreted under the laws of the State of Florida.
12. The parties hereto acknowledge and agree that Xxxxxxxx is acting in the capacity
as an independent contractor, and shall not be deemed an employee or agent of the Company
for any purpose, nor shall Xxxxxxxx hold himself out as being able to bind the Company in
connection with any matter. All statements proposed to be published or mailings proposed to
be disseminated by Xxxxxxxx in the name of or on behalf of the Company shall be submitted in
advance to a representative of the Company and to legal counsel to the Company for prior
approval.
13. This Agreement expresses the complete agreement and understanding of the
parties and may not be changed except in writing signed by both parties hereto.
14. This Agreement may be sign in one or more counterparts, all of which
counterparts together shall be deemed one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have executed this contract on the date
above written.
AMERICAN KIOSK CORPORATION
By:_______________________________
Xxxxxxx X. Xxxxxxx, President
___________________________________
XXXXXX XXXXXXXX
SCHEDULE A
