CONSULTING AGREEMENT DATED MARCH 29, 2007 CONSULTING AGREEMENT
Exhibit
10.22
CONSULTING
AGREEMENT DATED MARCH 29, 2007
THIS
CONSULTING AGREEMENT
(this
“Agreement”)
is
made and entered into effective as of March __, 2007 (the “Effective
Date”),
by
and among RG
AMERICA, INC.,
a
Nevada corporation (“RG
America”),
RG
RESTORATION, INC.,
a Texas
corporation (“RG
Restoration”),
RG
RISK MANAGEMENT, INC.,
a Texas
corporation (“Risk
Management”),
and
RG
ROOFING, INC.,
a Texas
corporation (“RG
Roofing”)
(RG
America, RG Restoration, Risk Management and RG Roofing, each a “RGMI
Entity”
and,
collectively, the “RGMI
Entities”),
and
FIRELINE
RESTORATION, INC.,
a
Florida corporation (the “Consultant”).
RECITALS
WHEREAS,
the RGMI
Entities are borrowers under a certain loan transaction (the “Loan”)
between the RGMI Entities and LAURUS MASTER FUND, LTD, a Cayman Islands company
(“Lender”).
WHEREAS,
the RGMI
Entities are not currently in compliance with their obligations with respect
to
the Loan, and each RGMI Entity has become unable to pay its debts as they become
due and has ceased the operations of its present business.
WHEREAS,
the
Consultant is in the business of providing restoration and other construction
services.
WHEREAS,
upon the
terms and conditions set forth in this Agreement, the RGMI Entities desire
to
engage the Consultant to provide consulting services to the RGMI Entities and
to
that end to outsource any and all construction and related duties and services
under the RGMI Entities’ currently existing and future construction contracts
and projects (collectively, the “Construction
Contracts”).
WHEREAS,
the RGMI
Entities are in the process of assigning to the Consultant one or more of the
Construction Contracts, and will assign to the Consultant additional
Construction Contracts upon obtaining the proper consent from the customers
to
the respective contracts.
WHEREAS,
the
Consultant desires to provide the consulting services to the RGMI Entities
upon
the terms and conditions set forth in this Agreement.
NOW,
THEREFORE,
in
consideration of the foregoing recitals and for other good and valuable
consideration, the parties hereto, intending to be legally bound, covenant
and
agree as follows:
Recitals.
The foregoing Recitals are true and accurate and are incorporated herein by
this
reference.
Consulting
Engagement.
The
RGMI
Entities hereby engage the Consultant to provide consulting services to the
RGMI
Entities, and the Consultant hereby accepts such engagement, upon the terms
and
conditions set forth in this Agreement. The consulting services to be provided
by the Consultant hereunder will consist of the complete and total outsourcing
of any and all functions, rights, preferences, rights to payment and obligations
under the Construction Contracts (collectively, the “Consulting
Services”).
In
connection with the Consulting Services, the Consultant shall have the power
and
authority, for itself and in the stead and on behalf of the RGMI Entities,
to do
any or all of the following:
| · |
Control
completely the projects contemplated by the Construction
Contracts;
|
| · |
Deal
directly with the customers, suppliers, and subcontractors under
the
Construction Contracts;
|
| · |
Negotiate
directly with the customers, suppliers, and subcontractors regarding
payment and pricing under the Construction
Contracts;
|
| · |
Process
payment applications and payroll applications on behalf of the RGMI
Entities with respect to the Construction Contracts, and make
determinations as to the proper payment
thereof;
|
| · |
Deal
directly with Lender for additional advances and funding, under the
Loan
and otherwise, that may be necessary in connection with the performance
of
the Construction Contracts, including without limitation, arranging
for
Lender to make such additional advances on the RGMI Entities’ behalf,
which advances may be funded directly to the Consultant;
and
|
1
| · |
To
do all other things the Consultant reasonably deems necessary to
carry out
and perform the Construction Contracts and the terms of this
Agreement.
|
Each
of
the RGMI Entities hereby appoints the Consultant, or any other person whom
the
Consultant may designate, as the RGMI Entity’s attorney-in-fact, with power to:
(a) execute any documentation on the RGMI Entity’s behalf relating to the
Construction Contracts and to supply any omitted information and correct patent
errors in any documents executed by the Consultant or on the RGMI Entity’s
behalf in connection therewith; (b) sign the particular RGMI Entity’s name on
any invoice or xxxx of lading relating to any accounts receivable, drafts
against account debtors, schedules and assignments of accounts receivable,
notices of assignment, financing statements and other public records,
verifications of accounts receivable and notices to or from account debtors
relating to the Construction Contracts; (c) endorse the particular RGMI Entity’s
name on any checks, notes, acceptances, money orders, drafts or other forms
of
payment or security that may come into the Consultant’s possession relating to
the Construction Contracts; (d) verify the validity, amount or any other matter
relating to any accounts receivable by mail, telephone, telegraph or otherwise
with account debtors relating to the Construction Contracts; and (e) to do
all
other things the Consultant deems necessary to carry out the terms of this
Agreement. Each of the RGMI Entities hereby ratifies and approves all acts
of
the attorney-in-fact and neither the Consultant nor the attorney-in-fact will
be
liable for any acts of commission or omission, nor for any error of judgment
or
mistake of fact or law other than gross negligence or willful misconduct (as
determined by a court of competent jurisdiction in a final and non-appealable
decision). This power being coupled with an interest is irrevocable during
the
Consulting Term (as defined below).
Term.
Subject
to the terms and conditions of this Agreement, including, but not limited to,
the provisions for early termination set forth below, the consulting engagement
of the Consultant under this Agreement shall commence on the Effective Date
and
shall continue through the first (1st)
anniversary of the Effective Date (the "Consulting
Term");
provided,
however,
that
this Agreement shall automatically be renewed for successive one (1) year terms
unless the Consultant gives the RGMI Entities notice of non-renewal at least
thirty (30) days prior to the expiration of any term.
Notwithstanding
the foregoing, the Consultant may,
prior to the scheduled expiration of the Consulting Term, terminate the
Consulting Term at any time without cause and without penalty effective
immediately upon notice. In the event of such a termination, the Consultant
shall be entitled to receive any unpaid Consulting Fees owing to the Consultant
up through and including the effective date of the termination of the Consulting
Term.
Notwithstanding
the foregoing, the RGMI Entities may, prior to the scheduled expiration of
the
Consulting Term, terminating the Consulting Term for Cause in accordance with
the terms herein. For purposes of this Agreement, the RGMI Entities shall have
"Cause"
to
terminate the Consulting Term hereunder if the Consultant is not performing
the
Consulting Services in accordance with the terms hereof. Prior to any
termination for Cause by the RMGI Entities, the RGMI Entities shall provide
the
Consultant with written notice of their intention to so terminate (the
“Termination
Notice”).
The
Termination Notice shall set forth in reasonable detail the grounds for the
termination for Cause. The Consultant shall have a period of sixty (60) days
from the date of the receipt by the Consultant of the Termination Notice to
remedy any act or omission of the Consultant which constitutes the grounds
for
Cause hereunder. If at the end of such sixty (60) day period, the RGMI Entities
and the Consultant disagree as to whether or not there exists grounds for a
termination for Cause hereunder, then the RGMI Entities (acting collectively)
and the Consultant shall each appoint one independent arbitrator, which two
appointed arbitrators shall select a third independent arbitrator. The panel
of
three arbitrators shall decide the issue as to whether or not there exists
grounds for a termination for Cause hereunder (the agreement of two of the
three
arbitrators shall be required). The decision of the arbitrators shall be final
and binding upon the RGMI Entities and the Consultant. The costs and expenses
of
the arbitrators shall be paid for by the non-prevailing party.
2
Independent
Contractor.
At all times during the Consultant’s engagement, the Consultant will act as an
independent contractor. The Consultant will not be considered an employee of
the
RGMI Entities for any purpose. In
addition to the foregoing, nothing set forth in this Agreement shall be
construed as creating a partnership or joint venture between the Consultant
and
the RGMI Entities.
Consulting
Fee.
As compensation for the Consultant’s services, the RGMI Entities, jointly and
severally, shall pay the Consultant a consulting fee in the form of the complete
and irrevocable assignment of any and all payments and amounts received by
the
RGMI Entities, and any and all rights to payment or compensation of any nature
whatsoever, under the Construction Contracts, including, without limitation,
profits, fees, charges, expenses and overhead (the “Consulting
Fee”).
The Consultant may direct the RGMI Entities to pay a portion of the Consultant
Fee to a third party at the Consultant’s direction. The Consultant shall be
entitled to reimbursement for all actual costs and expenses incurred by the
Consultant in connection with the performance of the Consulting Services.
Representations
and Warranties by the RGMI Entities.
Each of the RGMI Entities represents and warrants to the Consultant that the
execution and delivery by the RGMI Entities and the Consultant of this Agreement
do not, and the performance by the RGMI Entities and the Consultant of their
respective obligations hereunder will not, with or without the giving of notice
or the passage of time, or both: (a) violate any judgment, writ,
injunction, or order of any court, arbitrator, or governmental agency applicable
to any of the RGMI Entities, or (b) conflict with, result in the breach of
any provisions of or the termination of, or constitute a default under, any
agreement to which any of the RGMI Entities is a party or by which any of the
RGMI Entities is or may be bound.
No
Assumption of Liabilities; Release.
Each
of
the RGMI Entities expressly acknowledges, agrees and covenants that the
Consultant is not assuming any of the RGMI Entities’ or Lender’s duties or
obligations under and with respect to the Loan the loan documents entered into
in connection with the Loan (the “Loan
Documents”)
and
the transactions contemplated thereby or relating thereto, and that nothing
contained in this Agreement shall be construed inconsistent therewith. The
Consultant hereby expressly disclaims any and all duties, liabilities and
obligations under and with respect to the Loan or the Loan Documents and the
transactions contemplated thereby or relating thereto.
For
and
in consideration of the Consultant’s agreements contained herein, each RGMI
Entity hereby irrevocably releases each of the Indemnified Parties (as defined
below) from any and all claims, demands, agreements, actions, expenses, damages,
judgments, liabilities and obligations which any of the RGMI Entities has or
ever had against any of the Indemnified Parties arising out of or related in
any
way to the Loan, the Loan Documents or any of the transactions contemplated
thereby or relating thereto.
Indemnification.
For and in consideration of the Consultant’s agreements contained herein, each
RGMI Entity, jointly and severally, hereby indemnifies each of the Consultant,
and the Consultant’s parent corporation, Home Solutions of America, Inc., a
Delaware corporation, and their respective partners, Affiliates, directors,
officers, employees, representatives and agents (each being an
“Indemnified
Party”),
from, and agrees to defend and hold such Indemnified Party harmless against,
any
and all losses, liabilities, charges, damages, expenses and fees which may
be
asserted against such Indemnified Party arising out of or related in any way
to
this Agreement and/or the transactions contemplated hereby or relating hereto,
except for matters owing such Indemnified Party to the extent that a court
of
competent jurisdiction shall have determined by judgment, no longer subject
to
appeal, that such indemnified amount primarily resulted from such Indemnified
Party’s willful misconduct or gross negligence.
Further
Assurances.
Each of the RGMI Entities agrees to execute and deliver all such further
documents, to do or cause to be done all such further acts and things, and
to
obtain all consents reasonably requested by the Consultant, in order to effect
the transactions contemplated by this Agreement and to otherwise grant to the
Consultant the intended benefit of this Agreement.
Notices.
For purposes of this Agreement, notices and all other communications provided
for herein shall be in writing and shall be deemed to have been duly given
when
hand-delivered, sent by facsimile transmission (as long as receipt is
acknowledged), or mailed by United States certified or registered mail, return
receipt requested, postage prepaid, addressed to the address or facsimile number
for each party set forth below, or to such other address or facsimile number
as
either party may have furnished to the other in writing in accordance herewith,
except that a notice of change of address shall be effective only upon
receipt:
|
If
to the RGMI Entities
|
c/o
RG America, Inc.
0000
Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxx,
Xxxxx 00000
Fax:
(000) 000-0000
Attn:
Chief Financial Officer
|
|
If
to the Consultant
|
Fireline
Restoration, Inc.
0000
Xxxxxxx Xxxxxx
Xxxxx,
Xxxxxxx 00000
Fax:
(000) 000-0000
Attn:
Xxxxx X. Xxxxxxxx
|
3
Miscellaneous.
No provision of this Agreement may be modified or waived unless such waiver
or
modification is agreed to in writing signed by both of the parties hereto.
No
waiver by any party hereto of any breach by any other party hereto shall be
deemed a waiver of any similar or dissimilar term or condition at the same
or at
any prior or subsequent time. This Agreement is the entire agreement between
the
parties hereto with respect to the Consultant's engagement by the RGMI Entities,
and there are no agreements or representations, oral or otherwise, expressed
or
implied, with respect to or related to the engagement of the Consultant which
are not set forth in this Agreement. This Agreement shall be binding upon,
and
inure to the benefit of, the RGMI Entities, their respective successors and
assigns, and the Consultant and the Consultant’s successors and assigns. The
parties agree that if any provision of this Agreement shall under any
circumstances be deemed invalid or inoperative, the Agreement shall be construed
with the invalid or inoperative provision deleted and the rights and obligations
of the parties shall be construed and enforced accordingly.
Counterparts;
Facsimile Signatures.
This Agreement may be executed in one or more counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the
same instrument. Any signature delivered by facsimile transmission shall be
deemed an original signature hereto.
Governing
Law.
The validity, interpretation, construction, and performance of this Agreement
shall be governed by the laws of the State of Texas, without regard to
principles of choice of law or conflicts of law thereunder.
Attorneys’
Fees.
In the event of any dispute arising out of this Agreement or any instrument
given in connection herewith, or in the event it shall become necessary for
a
party to employ counsel to protect the party under this Agreement or any
instrument given in connection herewith, the prevailing party shall be entitled
to recover reasonable attorneys’ fees and costs, whether incurred out of court
or in litigation, including fees and costs incurred for representation on
appeals.
Construction.
Notwithstanding the fact that this Agreement has been drafted or prepared by
one
of the parties, each of the parties confirms that both it and its counsel have
reviewed, negotiated and adopted this Agreement as the joint agreement and
understanding of the parties. The language used in this Agreement shall be
deemed to be the language chosen by the parties to express their mutual intent,
and no rule of strict construction shall be applied against any
party.
Waiver
of Jury Trial.
THE
CONSULTANT AND THE RGMI ENTITIES KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY
WAIVE
THE RIGHT TO A JURY TRIAL IN ANY LAWSUIT BETWEEN THEM THAT ARISES AT ANY TIME
OUT OF THIS AGREEMENT OR THE CONSULTANT’S ASSOCIATION OR ENGAGEMENT WITH THE
RGMI ENTITIES, WHETHER AT LAW OR IN EQUITY, WHETHER BASED ON A CLAIM OR
COUNTERCLAIM ARISING BEFORE OR AFTER THE EFFECTIVE DATE OF THIS AGREEMENT,
REGARDLESS OF THE NATURE OF THE CLAIM OR COUNTERCLAIM, AND INCLUDING CLAIMS
UNDER TORT, CONTRACT, CORPORATE, AND OTHER LAWS.
[SIGNATURES
ON FOLLOWING PAGE]
4
IN
WITNESS WHEREOF,
the
parties have duly executed and delivered this Consulting Agreement as of the
day
and year first above written.
|
THE
RGMI ENTITIES:
|
|
|
RG
AMERICA, INC.,
a
Nevada corporation
By:
Name:
Title:
|
|
|
RG
RESTORATION, INC.,
a
Texas corporation
By:
Name:
Title:
|
|
|
RG
RISK MANAGEMENT, INC.,
a
Texas corporation
By:
Name:
Title:
|
|
|
RG
ROOFING, INC.,
a
Texas corporation
By:
Name:
Title:
|
|
|
THE
CONSULTANT:
|
|
|
FIRELINE
RESTORATION, INC.,
a
Florida corporation
By:
Name:
Title:
|
5
