EXHIBIT 10.20
CONSULTING AGREEMENT
C.S.F.G.
CONSULTING
FOR STRATEGIC GROWTH, LTD.
0 XXX XXXXXXXX
XXXXXX XXXXXXX, XX 00000
Tel: (000) 000-0000
Mobile: (000) 000-0000
Fax: (000) 000-0000
0-000-000-0000
January 1, 1998
Xx. Xxxxxx August
President & CEO
CPI Aerostructures, Inc.
000X Xxxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Dear Mr. August,
This Agreement, dated as of January 1, 1998 is entered into by and between CPI
Aerostructures, Inc. (the " Company") with offices at 000X Xxxxxxxxx Xxxxx,
Xxxxxxxx, XX 00000 and Consulting for Strategic Growth, Ltd. (the "Consultant")
with offices located at 0 Xxx Xxxxxxxx, Xxxxxx Xxxxxxx, XX 00000.
RECITALS
Whereas the Consultant has experience in the investment banking and financial
services business, and Whereas, the consultant desires to provide the financial
advisory services (the "Services") set forth in Section 3 hereof to the Company,
and the Company desires to retain the Consultant, who will assign Xx. Xxxxxxx
Xxxxxxxxxx to provide the Services to the Company.
NOW THEREFORE, in consideration of the premises and the mutual Covenants and
agreement hereinafter set forth, the parties hereto covenant and agree as
follows:
1. Retention. The Company hereby retains the Consultant, and the Consultant
agrees to be retained by the Company, to perform the Services as a
Consultant to the Company on the terms and conditions set forth herein.
The parties agree that the Consultant shall be retained by the Company as
an independent contractor on a consulting basis and not as an employee of
the Company.
2 Term. The terms of this Agreement shall commence on the date hereof and
shall end on December 31, 1999, unless terminated earlier pursuant to
Section 7. Hereof.
3. Duties of Consultant. During the term of the Agreement Consultant shall
provide the Company with such regular and customary consulting advice as
is reasonably requested by the Company, within the scope of the services
enumerated below. It is understood and acknowledged by the parties that
the value of Consultant's advice is not readily quantifiable, and that
Consultant shall be obligated to render advice upon the request of the
Company, in good faith, but not be obligated to spend any specific amount
of time in so doing. Consultants duties shall include, but will not
necessarily be limited to, providing recommendations concerning one or
more
of the following financial and related matters upon the request of the
Board of Directors of the Company and/or its President.
a. Assisting in the introduction of the Company to retail registered
representatives at various registered broker/dealers;
b. Arranging, on behalf of the Company, meetings with securities
analysts of nationally recognized and regional investment banking
firms on a quarterly basis or more frequently;
c. Arranging, on behalf of the Company, meetings in or within 50 miles
of New York City and Boston with "Small cap" money managers who
manage funds in both North America and Europe, on a quarterly basis
or more frequently;
d. Rendering advice with regard to any of the following corporate
finance matters: (1) changes in the capitalization of the Company;
(2) changes in the Company's corporate structure; (3) review budgets
and business plans; (4) planning the Company's financial
requirements;
e. Furnish advice to the Company in connection with the prospective
acquisition and/or merger candidates;
f. Participating as an observer or advisor at meetings of the Company's
Board of Directors or any committee thereof;
g. Using its best efforts to cause at least two research reports
concerning the Company to be written and disseminated by at least
two regional investment banking firms;
h. Using its best efforts to provide the Company with four
market-makers in its Common Stock, which market makers have not
previously made a market in the Company's securities; and
i. Promptly upon request by the Company, preparing press releases for
the Company and promptly distributing them to the appropriate news
and wire services.
j. Send by-monthly fax messages to select list of institutional
accounts, and interested parties, which would include analyst's
broker/dealers and retail brokers. (BLAST FAX)
4. Compensation. In consideration for the services rendered by Consultant to
the Company pursuant to this Agreement, the Company shall pay to the
Consultant $1,000 upon the signing of this agreement, and $1,000 (by the
tenth of each month) for each successive month during the term of this
Agreement. (subject to review and adjustment by mutual consent.) This fee
will include all regular, ongoing routine out of pocket expenses,
including communications, mailings, fax broadcasts, etc. Unusual special
requests would be paid for by the Company, i.e. Trip to California.
5. Confidentiality. Consultant acknowledges that, as a consequence of its
relationship with the Company, it has been and will continue to be given
access to ideas, trade secrets, methods, customer information, business
plans and other confidential and proprietary information of the Company
(collectively, "Confidential Information"). Consultant agrees that it
shall maintain in confidence, and shall not disclose directly or
indirectly, to any third parties or use for any purposes (other than the
performance hereof), any Confidential Information for the term of this
Agreement and a period of seven years thereafter, unless previously
approved by the Company in writing. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of
this Section 5 are not performed by the Consultant in accordance with
their specific terms or are otherwise breached by the Consultant. It is
accordingly agreed that the Company shall be entitled to an injunction or
injunctions to prevent breaches of this section 5 and to enforce
specifically the terms and provisions hereof in any court of the United
States or any State having jurisdiction in addition to any other remedy to
which they are entitled at law or in equity.
6. Pursuant to its 1995 Stock Option Plan, as amended, the Company agrees to
grant non-qualified stock options (the "Options") to the Consultant to
purchase 75,000 fully paid and non-enforceable shares of Common Stock of
the Company ("the Shares") exercisable at $2.50 per Share. The Options
shall become exercisable on September 22, 1998 and shall be exercisable
for as long as the consultant is retained by the Company and in no case
for less than five years from the date hereof. The Company hereby agrees
to register the Options and the Shares with the Securities and Exchange
commission on the Company's next available Form S-8 Registration
Statement, or any successor form.
7. Termination: This agreement shall terminate upon the earlier of:
(i) Expiration of the term of the agreement; or
(ii) Sixty (60) days written notice by either parts
8. Compliance with Law. The Consultant agrees that in performing this
agreement, that the Consultant shall comply with the applicable provisions
of the Securities Act of 1933, as amended. The applicable rules and
regulations of the National Association of Securities Dealers, Inc. and
any other applicable federal, state or foreign laws, rules and
regulations.
9. Indemnity. The consultant shall indemnify the Company, it directors,
officers, stockholders, representatives, agent s and affiliates
(collectively, the "Affiliated Parties") from and against any and all
losses, damages, fines, fees penalties, deficiencies, expenses, including
expenses of investigation, court costs and fees and expenses of attorneys,
which the Company or its Affiliated Parties may sustain at any time
resulting from, arising out of or relating to the breach or failure to
comply with any of the covenants or agreements of the Consultant or its
Affiliated Parties contained in this Agreement.
10. Notices. Notices, other communications or deliveries required or permitted
under this Agreement shall be in writing delivered by hand against
receipt, certified mail return receipt, or reputable overnight courier to
the addresses set forth below or such address as a party may designate in
accordance with this paragraph and shall be effective upon the earlier of:
(i) actual receipt; (ii) three (3) calendar days if sent by certified
mail; or one (1) day if sent by overnight courier.
A. To the Company at:
000 X Xxxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Attn: Xxxxxx August
B. To the Consultant at:
0 Xxx Xxxxxxxx
Xxxxxx Xxxxxxx, XX 00000.
11. Applicable Law. This agreement shall be governed by the internal laws of
the State of New York without regard to its conflict of law provisions.
If the foregoing sets forth your understanding of our agreement, kindly
indicate your agreement by signing on the space provided below.
Very truly yours,
Consulting for Strategic Growth, Ltd.
By: /s/ Xxxxxxx Xxxxxxxxxx
-----------------------------------
Name: Xxxxxxx Xxxxxxxxxx, Chairman
Agreed and Accepted by:
By: /s/ Xxxxxx August
-----------------------------------
Name: Xxxxxx August, president & CEO
