CONSULTING AGREEMENT
AGREEMENT made as of the 27th day of January, 1999, between Weststar
Environmental Inc.. a Florida corporation, with principal offices at 0000
Xxxxxxx Xxxxxx Xxxx., Xxxxx 0000, Xxxxxxxxxxxx, XX 00000 ( hereinafter referred
to as the "Company"); and Environmental and Financial Consulting, Inc. residing
at 00000 Xxxxxxx Xxxxx Xxxxxx X., Xxxxxxxxxxxx, XX 00000 (hereinafter referred
to as "E.F.C.").
WHEREAS, E.F.C. shall be employed by the Company as a CONSULTANT.
WHEREAS, E.F.C. has the requisite experience, background and skill and is
willing to formalize its relationship with the Company on the terms and subject
to the conditions herein contained.
NOW, THEREFORE, in consideration of the premises and mutual convenants herein
contained, the parties hereby agree as follows:
1) RECITALS CONFIRMED. All of the recitals hereinabove stated are confirmed by
all of the parties hereto as being in all respects true and correct and the
same are hereby incorporated herein by reference into this agreement (the
"Agreement").
2) EMPLOYMENT. The Company hereby confirms its hiring of E.F.C. and E.F.C.
hereby confirms its employment by the Company. E.F.C. shall, in the
performance of its duties, be at all times subject to the direction,
supervision and authority of the Company's Board of Directors.
3) NO BREACH OF OBLIGATION. E.F.C. represents and warrants to the Company that
it has the requisite skill and experience and is ready, willing and able to
perform those duties attendant to the position for which it is hired or
which may be assigned to it; and that its entry into this Agreement with
the Company does not constitute a breach of any prior agreement between
E.F.C. and any person, firm or corporation, contain any restriction or
impediment to the ability of E.F.C. to perform those duties for which it
was hired or which may be assigned to or reasonably expected of it. The
Company acknowledges that E.F.C. has other business interests.
4) SERVICES. During the full term of this Agreement, E.F.C. shall perform to
the best of its ability the following services and duties, in such manner
and at such times as the Company may direct; the following being included
by way of example and not by way of limitation:
(a) E.F.C. will search for acquisition/merger candidates. If
acceptable to the Company, E.F.C. will perform due diligence on
such candidates, and
work with the Company's attorneys and accountants to close each
transaction. If directed by the Board, E.F.C. will search for
qualified candidates to purchase the Company.
(b) E.F.C. shall aid and assist the administration of the Company's
sales, marketing programs, finance and other similar and related
aspects of the Company's operations;
(c) E.F.C. shall promote the Company's relations with its clients,
employees, potential clients and others;
(d) E.F.C. shall consult with and advise the other officers and
employees of the Company, either orally, or, at the request of the
Company, in writing, with respect to such matters as the Board of
Directors shall request from time to time, relating to the
management and operation of the Company, sales, marketing and the
institution of programs and systems designed to increase the
efficiency of the Company's business and overall management and
operation of the Company.
(e) E.F.C. shall, together and in connection with the other executive
officers of the Company, supervise and direct the administrative
aspects of and share responsibility for the conduct and
supervision of the administrative areas of the Company's
operation;
(f) E.F.C. shall, if requested by the Company, seek out equity/debt
financing for the Company.
5) RETAINER. At the beginning of the 1st and 2nd contract year, the Company
shall pay to E.F.C. a retainer fee of $250,000 for which E.F.C. will make
itself available to perform any duties requested by the Company. At the
beginning of the 3rd contract year, the retainer fee will be reduced to
$150,000 per contract year. This retainer will only be paid upon the
successful completion of an I.P.O. for Weststar.
6) EXCLUSIVITY. The Company hereby agrees and appoints E.F.C. as the exclusive
agent for negotiations on acquisitions, mergers, raising of equity/debt
and/or a sale of the Company. Compensation for these services is described
in Paragraph 8.
7) PLACE OF PERFORMANCE. E.F.C. agrees to perform its duties hereunder at the
offices of the Company, in Jacksonville, Florida, or any other suitable
place and agrees, to the extent that it shall be determined necessary and
advisable in the sole discretion of the Company's Board of Directors to
travel to any place in the United States or to any foreign country where
its presence is or may reasonably be temporarily required for the
performance of its duties hereunder.
8) COMPENSATION. The Company will pay to E.F.C. a finders fee/fee of 10% of
the gross selling price (price & debt) for any acquisition or merger
candidate that is acceptable to the Company. The Company will pay to E.F.C.
a finders fee/fee of 10% of the gross amount of any equity placements/debt
arranged by E.F.C. Said fee shall be paid as follows:
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(a) FEE. (Acquisitions/Merger/Sale)
1. CASH. One half (1/2) of the fees will be paid in cash at time
of closing or at the completion of the I.P.O.
2. STOCK. One half (1/2) of the fees will be paid in fully paid,
non-assessable shares of stock in the Company. Valuation of
this stock shall be the average price for the preceding three
months closing price as quoted by NASDAQ (or a comparable
stock exchange) or, in case of an acquisition closing prior
to the Company having quoted stock price, then stock will be
valued at price of the Company at the time, as determined by
similar transactions or services for value. The stock will be
S-8 stock, in that the Company will agree to file an S-8
registration at the Company's expense upon demand by E.F.C.
Such stock will be delivered at time of closing of the I.P.O.
If requested by E.F.C. said stock may be given to individual
consultants working for E.F.C.
(b) FEE-EQUITY/DEBT PLACEMENTS
1. CASH. 100% of the fee will be paid in cash at time of closing.
(c) EXPENSES, ACCOMMODATIONS, INSURANCE, AND MEDICAL BENEFITS. The
Company shall pay to E.F.C., and/or furnish E.F.C. with expenses,
accommodations, insurance and medical benefits referenced in
Paragraph 11 of this Agreement; and
(d) AUTOMOBILES. E.F.C. shall be entitled to the use of automobiles at
the Company expense during the term of this Agreement;
(e) SEVERANCE. The Company shall pay E.F.C. the severance compensation
enumerated in Paragraph 15(c) of this Agreement.
9) REPRESENTATION AND WARRANTIES OF ENVIRONMENTAL AND FINANCIAL CONSULTING,
INC. By virtue of its execution hereof, and in order to induce the Company
to enter into this Agreement, E.F.C. hereby represents and warrants as
follows:
(a) E.F.C. is not presently actively engaged in any business,
employment or venture, which is or may be in conflict with the
business of the Company.
(b) E.F.C. has full power and authority to enter into this Agreement,
to enter into the employ of the Company and to otherwise perform
this Agreement in the time and manner contemplated; and
(c) E.F.C.'s compliance with the terms and conditions of this
Agreement in the time and manner contemplated herein will not
conflict with any instrument or agreement pertaining to the
transaction contemplated herein, and will not conflict in, result
in a breach of or constitute a default under any instrument to
which is a party.
10) REPRESENTATION AND WARRANTIES OF THE COMPANY. By virtue of the execution of
this Agreement, the Company hereby represents and warrants to E.F.C. as
follows:
(a) The Company has full power, right and authority to execute and
perform this Agreement in the time and manner contemplated; and
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(b) The execution and performance of this Agreement will not result in
a breach of or violate the provisions of any contract or agreement
to which the Company is a party.
11) EXPENSES, ACCOMMODATIONS, INSURANCE, MEDICAL BENEFITS, AND ETC. The Company
and E.F.C. agree that E.F.C. shall receive reimbursement, for all expenses
incurred by E.F.C. in connection with the performance of its duties
hereunder subject to compliance with the Company's procedures; and the
Company shall pay to E.F.C. directly or reimburse E.F.C. for all other
reasonable, necessary and proven expenses and disbursements incurred by
E.F.C. for and on behalf of the Company in the performance of E.F.C.'s
duties during the term of this Agreement. Weststar will provide E.F.C. with
office space and secretarial support during the term of this Agreement.
12) AUTOMOBILE(S). E.F.C. shall be entitled to the use of an automobile(s) and
all expense(s) necessary to operate and maintain such auto(s); with the
Company reimbursing E.F.C. for such costs.
13) PROPRIETARY RIGHTS. E.F.C. or any of its employees shall at no time before
or after the termination of this Agreement hereunder use or divulge or make
known to anyone without the express written consent of the Board of
Directors of the Company (except to those duly authorized by the Company to
have access thereto) any marketing systems, programs or methods, customer
or client lists, computer programs, configurations, systems or procedures,
ideas, formulae, inventions, discoveries, improvements, secrets, processes
or technical or other information of the Company or any accounts, customer
or client lists, transactions of business affairs of the Company. At the
conclusion of this Agreement by the Company, E.F.C. shall forthwith
surrender to the Company all letters, brochures, agreements and documents
of every character relating to the business affairs and properties of the
Company and then in its possession and shall not, without the Company's
prior written consent, retain or disclose any copies thereof.
14) COMPETITION. During the seven (7) year term of this Agreement, or upon the
termination of its consulting contract, whichever event shall occur later
and for a period of 24 months thereafter, E.F.C. shall not, without the
prior express written consent of the Company, engage in any business which
is in direct competition or threatening to be in competition with the
Company within any other state or other jurisdiction in which the Company
is engaged in such operations.
E.F.C. further convenants that during the stated term of this Agreement and
for the twelve (12) month period thereafter, it will not solicit any
clients or customers, known by it to be clients or customers of the Company
for competitive business. The foregoing restrictions shall not apply to a
termination of the consulting contract by the Company without cause or a
termination of the employment by E.F.C. because of a breach of Agreement by
the Company.
15) TERM AND TERMINATION. The Agreement shall be deemed to be effective as of
the date of its execution and shall continue in full force and effect until
the last day of the month
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after the seventh (7th) anniversary thereof unless sooner terminated as
hereinafter set forth:
(a) TERMINATION BY THE COMPANY FOR CAUSE.
(1) The Company may terminate E.F.C.'s contract for cause (as defined
in sub-paragraph (2) below) upon compliance with the provisions of
sub-paragraph (3). Upon such termination, the Company shall have
no further obligations to E.F.C., except for the compensation or
other benefits due for a period prior to the date of Termination.
(2) "Cause" shall mean: (i) E.F.C.'s willful and continued failure to
perform any of its duties with the Company; or (ii) E.F.C. willful
engaging in misconduct which is materially injurious to the
Company, monetarily or otherwise. For purpose of this
sub-paragraph (2), no act or failure to act on E.F.C.'s part shall
be considered "willful" unless the act or failure to act by E.F.C.
is done in bad faith and with absolute certainly that such action
or omission was not in, or opposed to, the best interest of the
Company.
(3) Termination for Cause shall be effected only if: (i) the Company
has delivered to E.F.C. a copy of a Notice of Termination which
complies with Paragraph 14 hereof and which gives E.F.C. at least
thirty (30) business days' prior notice, the opportunity, together
with E.F.C. counsel, to be heard before the Board of Directors and
(ii) the Board of Directors (after such notice and opportunity to
be heard), adopts a resolution concurred in by not less than
two-thirds of all of the Directors of the Company then in office,
including at least two-thirds of all of the directors who are not
officers of the Company, that in the good faith opinion of the
Board of Directors, E.F.C. was guilty of conduct set forth above
in clause (i) and (ii) of the first sentence of sub-paragraph (2),
and specifying the particulars thereof in detail.
(b) TERMINATION BY E.F.C. FOR GOOD REASON.
(1) E.F.C. may terminate its employment for Good Reason (as defined in
sub-paragraph (2) below) by giving the Company a Notice of
Termination which complies with Paragraph 14 hereof. Upon such
termination E.F.C. shall have the rights described in
sub-paragraph (3) hereof.
(2) "Good Reason": shall mean: (i) E.F.C. being removed without Good
Reason; (ii) the assignment to E.F.C. without its express written
consent, of any duties other than those permitted by Paragraph 4;
(iii) the Company's requiring E.F.C. to maintain its principal
offices or conduct its principal activities anywhere other than at
the Company's principal executive offices, (iv) the failure of the
Company to obtain the assumption and agreement to perform this
Agreement by any successor as contemplated in Paragraph 8
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hereof; (v) repudiation by the Company of any material obligation
of the Company under paragraph 7 hereof; or (vi) the delivery of a
Notice of Termination by the Company pursuant to Paragraph 14(a)
(3), above (except that the delivery of such Notice shall be
retroactively deemed not to constitute Good Reason if within sixty
(60) days after the Board of Directors shall make the
determination described in Paragraph 14(a)(3), (after the
opportunity to be heard provided for therein) and such
determination is not thereafter reversed by an arbitration
decision or final judgment of a court of competent jurisdiction.
(c) TERMINATION BY CHANGE OR CONTROL. In the event the Company
experiences a Change of Control as hereinafter defined, E.F.C.
shall have the right and option, in its sole unfettered
discretion, to declare this Agreement breached by the Company.
Upon the occurrence of such a course of action, E.F.C. shall be
entitled to receive all of the compensation and remuneration
provided in Section 5, 8, and 16 of this agreement.
16) CHANGE IN CONTROL. For purpose of this Agreement, a Change in Control will
be deemed to have occurred:
(a) If following (i) a tender or exchange offer for voting securities
of the Company, (ii) a proxy contest for the election of Directors
of the Company or (iii) a merger or consolidation or sale of all
or substantially all of the business or assets of the Company, the
Directors of the Company immediately prior to the initiation of
such event cease to constitute a majority of the Board of
Directors of the Company upon the occurrence of such event or
within one year after such event. Or
(b) If any "person" or "group" (as defined under the beneficial
ownership rules of Section 13(d)(3) and 14(d)(2) of the
Securities Exchange Act of 1934 and Rule 13d3 thereunder) acquires
ownership or control, or power to control, twenty-five percent
(25%) or more of the outstanding voting securities of the Company
without prior approval or ratification by a majority of the
Company's directors in office at the time of such event.
(c) E.F.C.'S RIGHT UPON CERTAIN TERMINATION. If the Company terminates
E.F.C.'s contract hereunder, otherwise than for cause pursuant to
Paragraph 15(2) or if E.F.C. terminates this contract for Good
Reason pursuant to Paragraph 15(b), or pursuant to Paragraph 15
(2):
(1) The Company shall pay E.F.C. the greater of (a) the average of
compensation to E.F.C. prior to this termination x (times) the
remaining life of this contract or (b) the sum of $500,000 as
damages, except for a sale of the Company.
(2) E.F.C. shall be entitled to the full amount which would have
been due it under any bonus or profit sharing plan, or similar
arrangement,
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in which it was participating prior to the Date of
Termination, for the full seven (7) year term of this
Agreement, without any proration or reduction because of
E.F.C. not being under contract during the full term;
(3) E.F.C. shall also be entitled to the full amount of any
contingent compensation or benefit which would have become
vested had its contract continues throughout the
Post-Termination Period;
(4) The Company shall also pay to E.F.C. an amount equal to all
legal fees and expenses incurred by E.F.C. as a result of such
termination (including all fees and expenses, if any, incurred
in contesting or disputing any such termination or in seeking
to obtain or enforce or retain any rights or benefit provided
by this Agreement);
(5) The Company shall maintain full force and effect, for
E.F.C.'s; continued benefit throughout the Post-Termination
Period, all life and health insurance and other benefit plans
in which E.F.C. was entitled to participate immediately prior
to the Date of Termination, provided that the Employee
continued participation is possible under the general terms
and conditions of such plans. If E.F.C.'s participation in any
such plan is barred for any reason whatsoever, the Company
shall arrange to provide E.F.C. with benefits substantially
similar to those which he is entitled to receive under such
plan;
(6) E.F.C. shall not be required to mitigate the amount of any
payment provided for in this Paragraph 16 and payments due may
not be reduced by any compensation earned by E.F.C. in any
manner after the Date of Termination.
17) DATE OF TERMINATION. "Date of Termination" shall mean the date on which a
Notice of Termination is given.
18) SUCCESSORS; BINDING AGREEMENT.
(a) The Company shall require any purchaser of all or
substantially all of the Business of the Company, by agreement
or form and substance satisfactory to E.F.C., to assume and
agree to perform this Agreement in the same manner and to the
same extent that the Company would be required to perform if
no such purchase had taken place. If there is no agreement,
the full amount will become due and payable. As used in this
Agreement, "Company" shall mean the Company as hereinabove
defined, and any successor to the Company's business or assets
which executes and delivers this Agreement provided for in the
Paragraph 18(a) or which otherwise becomes bound by all the
terms and provisions of this Agreement by operation of law.
19) ARBITRATION. E.F.C. shall have the right to submit any determination by the
Board of Directors terminating its contract for Cause, or an other dispute
hereunder, to arbitration by a single arbitrator in Jacksonville, Florida
under the laws of American Arbitration
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Association. Any award in such arbitration may be enforced in any court
of competent jurisdiction.
20) ENTIRE AGREEMENT. This Agreement sets forth the entire understanding of the
parties with respect to the subject matter hereof, shall supersede any
prior agreements and understandings between the parties with respect to
such subject matter, and no statement, representation, warranty or covenant
has been made by either party except as expressly set forth herein.
21) MODIFICATION. This Agreement shall not be terminated orally. All of the
terms and provisions of this Agreement shall be binding upon and inure to
the benefit of and be enforceable by the respective heirs and personal
representatives of E.F.C. and the successors and assigns of the Company.
22) LAWS OF THE STATE OF FLORIDA. This Agreement is being delivered in the
State of Florida and shall be construed and enforced in accordance with the
laws of the State of Florida, irrespective of the state of incorporation of
the Company or the place domicile or residence of E.F.C. In the event of a
controversy arising out of the interpretation, construction, performance or
breach of this Agreement, the parties hereby agree and consent to the
jurisdiction and venue of the Circuit Court of the State of Florida, Xxxxx
County and/or the United States District Court for the Northern District of
Florida and further agree and consent that personal service or process in
any such action or proceeding outside of the County of Xxxxx shall be
tantamount to service in person within the County of Xxxxx and shall confer
personal jurisdiction upon either of said courts.
23) NOTICES. Any notice given by one party to the other in connection with this
Agreement shall be in writing and shall be sent certified mail, return
receipt requested, with postage and certification fees prepaid, to the
following addresses:
Consulting Company: Environmental and Financial Consulting, Inc.
00000 Xxxxxxx Xxxx Xxxxxx X.
Xxxxxxxxxxxx, XX 00000
Company: Weststar Environmental Inc.
0000 Xxxxxxx Xxxxxx Xxxx.
Xxxxx 0000
Xxxxxxxxxxxx, XX 00000
24) ADDITIONAL INSTRUMENTS. Each of the parties shall from time to time, at the
request of the others, execute, acknowledge and deliver to the other party
any and all further instruments that may be reasonably required to give
full effect and force to provisions of this Agreement.
25) ORIGINALS. This Agreement may be executed in counterparts each of which so
executed shall be deemed an original and constitute one and the same
agreement.
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26) ADDRESS OF PARTIES. Each of the parties shall at all times keep the other
informed of its principal place of business or residence if different from
that stated herein, and shall promptly notify the other of any change,
giving the new principal place of business or residence.
27) MODIFICATION AND WAIVER. A modification or waiver of any of the provisions
of this Agreement shall be effective only if made in writing and executed
with the same formality as this Agreement. The failure of any party to
insist upon strict performance of any of the provisions of this Agreement
shall not be constructed as a waiver of any subsequent default of the same
or similar nature or of any other nature or kind.
28) REMEDIES ON BREACH. E.F.C. hereby agrees that it may not be possible for
the Company to be adequately compensated in damages for any breach by
E.F.C. of any of the representations, warranties, terms or any conditions
contained in this Agreement and accordingly E.F.C. hereby agrees and
consents that in the event of any such breach, the Company, in addition to
any other remedies it may have, shall be entitled to injunction or other
equitable relief restraining such breach.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written.
ATTEST:
BY: /s/ XXXXXXX X. XXXX BY: /s/ XXXXXXX X. XXXXX
-------------------------- -------------------------------
Xxxxxxx X. Xxxx Xxxxxxx X. Xxxxx
Chairman of the Board Weststar Environmental, Inc.
(Corporate Seal) BY: /s/ Signature illegible
--------------------------------
Environmental and Financial
Consulting, Inc.
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