EXHIBIT 10.4
CONSULTING AGREEMENT
CONSULTING AGREEMENT made as of May 1, 2001, by and between Madison Venture
Capital II, Inc., a New York corporation with offices at 000 Xxxx 00xx Xxxxxx -
00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("MVC"), RKP Capital Partners, LLC, an
Illinois limited liability company with offices at Xxx Xxxxxxxxxxx Xxxx,
Xxxxxxx, Xxxxxxxx 00000 ("RKP") and NovaCorp, LLC, an Illinois limited liability
company ("NCLLC) (MVC, RKP and NCLLC are hereinafter collectively referred to
as the "Consultant") on one hand and DFR Associates I, Inc., a Delaware
corporation with offices at 000 Xxxx 00xx Xxxxxx - 00xx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000 (hereinafter referred to as the "Company") and Spent Lamp Recycling
Technology, an Illinois corporation with offices at 000 Xxxxx Xxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxx 00000 (the "Subsidiary") on the other hand.
WHEREAS, the Company desires to obtain the continued benefit of the
services of Consultant to provide the services hereinafter set forth to the
Company and the Subsidiary during a five year period commencing May 1, 2001 and
ending on April 30, 2006 at the rate of compensation set forth herein; and
WHEREAS, Consultant desires to render such services to the Company;
NOW, THEREFORE, in consideration of the mutual covenants and conditions
herein contained and the acts herein described, it is agreed between the parties
as follows:
1. The Company hereby engages and retains Consultant and Consultant
hereby agrees to render services and advice to the Company, for a five (5) year
period commencing May 1, 2001 and ending April 30, 2006.
2. The services to be rendered by Consultant shall consist giving
advice of a general business nature, including, but not limited to advice on
operating as a publicly held company, and, if the Company (or its successor by
merger) shall obtain directors liability insurance in an amount reasonably
satisfactory to the Consultant, providing one of its principals to serve on the
Board of Directors of the Company to give advice and opinions to the Company
concerning, but not limited to, consulting with management concerning the
development of the business of the Company and general business advice.
Consultant may also seek and evaluate acquisition candidates for the Company.
Consultant shall have the sole discretion as to the form, manner and place in
which said advice shall be given and the amount of time to be devoted to serve
under this Agreement. Except as provided hereinafter, an oral opinion by
Consultant to the Company shall be considered sufficient compliance with the
requirements of this paragraph. Consultant shall devote to the Company only
such time as it may deem necessary, and when reasonably requested by the
Company, and shall not by this Agreement be prevented or barred from rendering
services of the same or similar nature, as herein described, or services of any
nature whatsoever for or on behalf of persons, firms or corporations other than
the Company. The Company recognizes the Consultant provides services to other
clients. The Company acknowledges that it has already received substantial
advice and services from the Consultant and its beneficial owners.
3. The Company shall compensate the Consultant as follows:
(i) The payment of a fee of $1,750 by check on the first day of each
month during the term of this Agreement to each of MVC and RKP and by check on
the first day of each month during the term of this agreement to NCLLC in the
amount of $3,500 (for a total of $7,000 each month);
(ii) In connection with any Merger or other Acquisition where the
acquired company was introduced to the Company by the Consultant payment, in
cash, upon the closing of the transaction (unless the Consultant and the Company
shall mutually agree to a payment other than in cash) based upon the value of
the transaction with any of the Company's securities being valued at their
market value at the time of the transaction based on the following formula:
(A) 5% of the first one million ($1,000,000) dollars of the value of the
transaction;
(B) 4% of the amount of the value of the transaction in excess of one million
($1,000,000) dollars up to and including two million ($2,000,000) dollars;
(C) 3% of the amount of the value of the transaction in excess of two million
($2,000,000) dollars up to and including three million ($3,000,000)
dollars;
(D) 2% of the amount of the value of the transaction in excess of three million
($3,000,000) dollars up to and including four million ($4,000,000) dollars;
and
(E) 1% of the amount of the value of the transaction in excess of four million
($4,000,000) dollars.
The payment of fees under this sub-paragraph (ii) shall apply to any merger
or acquisition which is consummated with any party introduced to the Company be
the Consultant during the term of this Agreement or within two years thereafter.
Unless MVC, RKP and NCLLC shall agree otherwise, all fees to the Consultant
shall be divided as follows: MVC. (25%); RKP (25%) and NCLLC (50%).
For purposes of this Agreement, "Merger or Acquisition" means (A) any
transaction or series of transactions whereby, directly or indirectly, (i) 50%
of the assets, revenues or income of the Company or any of its subsidiaries or
affiliates or (ii) more than 50% of the capital stock of the Company or any of
its subsidiaries or affiliates is acquired, licensed or leased, with or without
a purchase option, by another party or parties or is transferred to another
party or parties in any manner, including by way of stock purchase, sale, or
exchange, merger, consolidation, reorganization, recapitalization, liquidation,
joint venture or partnership, minority investment, tender or exchange offer,
open market or negotiated purchase or any similar transaction or any combination
of the foregoing or (B) any transaction or series of transactions whereby,
directly or indirectly, (i) 50% of the assets, revenues or income of any other
entity or (ii) more than 50% of the capital stock of any other entity is
acquired, licensed or leased, with or without a purchase option, by the Company
or any of its subsidiaries or affiliates or is transferred to the Company or any
of its subsidiaries or affiliates in any manner, including by way of stock
purchase, sale, or exchange, merger, consolidation, reorganization,
recapitalization, liquidation, joint venture or partnership, minority
investment, tender or exchange offer, open market or negotiated purchase or any
similar transaction or any combination of the foregoing. (iii) The
Company shall reimburse the Consultant for any out-of-pocket disbursements
and expenses in connection with services rendered, upon submission of
substantiation therefore.
4. The Company agrees to indemnify and hold harmless Consultant,
its officers, directors, employees and agents and each person, if any who
controls the Consultant, against any and all loss, liability, claim, damage and
expense whatsoever (including but not limited to attorneys' fees and any and all
expense whatsoever reasonably incurred in investigating, preparing or defending
against any litigation, commenced or threatened, or any claim whatsoever)
arising out of or based upon any untrue or alleged untrue statement of a
material fact contained (i) in any information provided to Consultant by the
Company or (ii) arising out of Consultant's services.
If any action is commenced against the Consultant or any of its officers,
directors, employees, agents or controlling persons (an indemnified party) in
respect of which indemnity may be sought against the Company pursuant to the
foregoing paragraph, such indemnified party or parties shall promptly notify the
indemnifying party in writing of the commencement of such action and the
indemnifying party shall assume the defense of such action, including the
employment of counsel (satisfactory to such indemnified party or parties) and
payment of expenses. Such indemnified party or parties shall have the right to
employ its or their own counsel in any such case but the fees and expenses of
such counsel shall be at the expense of such indemnified party in connection
with the defense of such action or the indemnifying party or parties unless the
employment of such counsel shall have been authorized in writing by the
indemnifying party in connection with the defense of such action or the
indemnifying party shall not have employed counsel to have charge of the defense
of such action or such indemnified party or parties shall have reasonably
concluded that there may be defenses available to it or them which are different
from or additional to those available to the indemnifying party (in which case
the indemnifying party shall not have the right to direct the defense of such
action on behalf of the indemnified party or parties), in any of which events
such fees and expenses shall be borne by the indemnifying party. Anything in
this paragraph to the contrary notwithstanding, the Company shall not be liable
for any settlement of any such claim or action effected without its written
consent. The Company agrees promptly to notify the Consultant of the
commencement of any litigation or proceeding against the Company or any of its
officers or directors in connection with any matter covered by the services to
be rendered by Consultant.
None of Consultant its officers, directors, employees, affiliates,
subsidiaries, agents or controlling persons shall have any liability to the
Company, its subsidiaries or affiliates or any person asserting a claim on
behalf of or in the right of the Company or its subsidiaries or affiliates in
connection with or as a result of Consultant's engagement hereunder or any
matter referred to herein, except to the extent that a loss, claim, liability,
damage or expense incurred by the Company or its subsidiary or affiliate is
finally determined by a court of competent jurisdiction to have resulted from
the gross negligence or willful misconduct or fraud of the person or entity
performing services hereunder. The Company, for itself and for anyone claiming
through it or in its name or on behalf of its security holders or other owners
irrevocably waives any right it may have to a trial by jury with respect to
relative to or arising under this Agreement or Consultant's engagement
hereunder. Without the prior written consent of Consultant, which shall not be
unreasonably withheld, the Company shall not settle, compromise, or consent to
the entry of a judgement in any pending or threatened claim, action or
proceeding if, following such event, indemnity against the Consultant or its
officers, directors, employees affiliates subsidiaries, agents, or controlling
persons may be sought.
5. This instrument contains the entire agreement of the parties.
There are no representations or warranties other than as contained herein, and
there shall not be any liability to Consultant for any services rendered to the
Company pursuant to the terms of this Agreement. No waiver or modification
hereof shall be valid unless executed in writing with the same formalities as
this Agreement. Waiver of the breach of any term or condition of this Agreement
shall not be deemed a waiver of any other of subsequent breach, whether of like
or of a different nature.
6. This Agreement shall be construed according to the laws of the
State of New York as they are applied to agreements executed and to be performed
entirely within such State and shall be binding upon the parties hereto, their
successors and assigns.
7. All notices required to be given under his agreement shall be
given by Certified Mail Return Receipt Requested or by recognized overnight
courier (signature required) to the addresses set forth at the head of this
Agreement unless a different address is specified in a notice to a party.
8. This agreement supercedes the consulting agreement between SLRT
and NCLLC, dated April 20, 2000 and also supercedes a consulting agreement by
and among MVC, RKP, DFR and SLRT, dated as of May 1, 2001.
IN WITNESS WHEREOF, the parties hereto have caused these presents to be
signed and their respective seals to be hereunto affixed the day and year first
above written.
Madison Venture Capital II, Inc.
By: ---------------------------------
Xx. Xxxxxx Xxxxxxxx, President
RKP Capital Partners, LLC
By: ---------------------------------
Xxxxxx X. Xxxxx
NovaCorp, LLC
By: ----------------------------------
Xxxxx Xxxxxxx Xxxxxxxx, President
D.F.R Associates I, Inc.
By: ----------------------------------
Xxxxxxxx X. Xxxxx, President
Spent Lamp Recycling Technology, Inc.
By: ------------------------------------
Xxxxxxxx X. Xxxxx, President
