Exhibit 10.10
INDEPENDENT CONTRACTOR'S AGREEMENT
October 2, 2000
United Ventures Group, Inc., a Delaware corporation, with its principle office
at 000 Xxxx 00xx Xxxxxx (Xxxxx Xxxxx), Xxx Xxxx, Xxx Xxxx 00000 (hereinafter
referred to as "UVGI") and Xxxxxx Xxxxxxx, a resident of New York with an office
at 000 Xxxx 00xx Xxxxxx (Xxxxx Xxxxx), Xxx Xxxx, Xxx Xxxx 00000 (hereinafter
referred to as "Kalman") do, as of this 2nd day of October, 2000, agree as
follows:
WHEREAS, Kalman is, or has been, actively engaged in a broad range of business
interests including, but not limited to, real estate ventures, gold mines in
Ghana and Guyana, chemicals, fishlock and until recently the jewelry business
through his ownership of A.K.S. Jewelry Manufacturing Corp. and AKS
International AA Corp; and
WHEREAS, Kalman through entities owned by him has a broad range of experience
and expertise in sourcing raw material for and in the production and marketing
of quality precious metal chain and other jewelry, with and without gems; and
WHEREAS, Kalman, through entities owned by him, controls patents relating to
precious metal chain construction and has employed customized machinery,
equipment and trained personnel to produce jewelry for his own account and for
others at his New York City business location; and
WHEREAS, UVGI is purchasing the customer lists, good will and specified assets
of A.K.S. Jewelry Manufacturing Corp. and AKS International AA Corp. under a
contemporaneously executed Agreement of even date and desires to retain the
services of Kalman as an independent contractor hereunder to facilitate the
orderly transfer of the business of such corporations' jewelry business to UVGI
as well as the maintenance, continuation and growth of such business; and
WHEREAS, Kalman is amenable to serving as an independent contractor on the terms
and for the period set forth below.
NOW, THEREFORE, by virtue of these promises the parties hereto agree as follows:
1. Duties: Kalman will assist UVGI in retaining the loyalty and business of
those customers whose names appear on the Customer List being conveyed to UVGI
simultaneously herewith by affiliates of Kalman under separate Agreement. In
addition, he will contact them on behalf of UVGI and encourage them to increase
their product orders from UVGI. He shall comport himself with former customers
of his jewelry operation in such a manner as to convey the impression that the
management is unchanged so long as such conduct does not create real exposure to
Kalman or his affiliated entities. Kalman will not be deemed to be in breach of
this Agreement if, in spite of his efforts, customers are lost or is generally
unsuccessful in increasing aggregate orders, sales, productivity with respect to
the jewelry business that Kalman has been involved with while under AKS Jewelry
Manufacturing, Inc. or AKS AAA International, Inc. Kalman shall also provide
advice, guidance and assistance to UVGI in the areas of new product development
to the extent that he is called upon to do so; and jewelry design, manufacture
and marketing. Kalman agrees to devote at least 80% of his business time,
attention and energies to faithfully and to the best of his abilities
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perform his above described duties for UVGI, its subsidiaries and affiliates.
While Kalman can devote the balance of his time to other endeavors he shall not
engage in any aspect of the jewelry business with persons other than UVGI, its
affiliates or subsidiaries without (a) first obtaining the written approval of
UVGI (which may be withheld without reason) and (b) without offering UVGI or its
affiliates or subsidiaries the right to participate on equal terms with him, and
entities or persons controlled by him or common control. Notwithstanding the
previous sentence, it is understood that Kalman is expected to devote time to
collect the jewelry receivables that were not acquired by UVGI, its subsidiaries
and affiliates from NIGT Inc., Kalman's affiliate, and will strive to do so to
the best of his ability in a manner that will retain the good will of the
account debtors so as not to impact or endanger ongoing business between such
account and UVGI; it being understood between parties hereto that any loss of
business as a result of such collection efforts shall not be deemed a breach
hereunder. In situations where collection proves difficult Kalman shall confer
with UVGI's officers before instituting a collection action and collecting such
receivables but in no event shall Kalman be prevented from collecting such
receivables by any legal means available to him. Kalman is also authorized and
expected to sell off the inventory retained by him and his affiliates to third
parties; provided, however, that he shall first offer the same to UVGI, its
affiliates and subsidiaries, at an at cost basis. Kalman will exercise his
reasonable efforts to cause entities controlled by him, who are indebted to
former suppliers and creditors of his jewelry business, to pay, if possible,
their outstanding obligations due to such suppliers and creditors in a
sufficiently timely basis so that it does not interfere with UVGI's ability to
continue to do business with them under normal trade terms. In furtherance of
assuring a continuity of the former business relationships enjoyed by Kalman in
the jewelry business he undertakes to credit returns of jewelry from customers:
(a) Received within sixty days of the date hereof, whatever the dollar
amount (provided said returns are within the usual and customary trade practices
of the jewelry business); (b) received within six months from the date hereof if
it is for an amount in excess of $5,000. He may do so either through monthly
offsets of inventory sold to UVGI, its affiliates or subsidiaries or, in months
when the offset is insufficient, by cash settlements. Anything herein to the
contrary notwithstanding, should UVGI, its affiliates or subsidiaries not
purchase an interest in the machinery utilized by Kalman, or his affiliates in
the past, pursuant to an Equipment and Machinery Purchase Option Agreement, to
produce gold chain on or before the date set forth therein, and, the rental
arrangement for such equipment and machinery is not renewed than Kalman shall be
free to produce and market from said machines gold and silver rope chain for his
own account as well as sell the machinery that produces the same; provided,
however, UVGI is given the right of first refusal to purchase the same. Finally,
it is understood that ownership and operation of gold mines, or marketing and
trading in gold bullion is not considered the jewelry business for purposes of
this Agreement.
2. Performance of Duties: Kalman, shall perform his services from such location
or locations, in such manner and through such means as he determines; provided,
however that such services are professionally and ethically done. Kalman shall
provide his own office and computer hardware and software to carry out his
duties hereunder. However, UVGI, shall provide Kalman with an office in its
facilities upon notice from Kalman at UVGI's premises.
3. Term: Absent any justifiable action taken pursuant to this Agreement, your
employment will commence on the date hereof and will terminate at the close of
business
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three (3) years hence. Upon mutual agreement, reduced to writing, we may extend
this employment arrangement on a year to year basis on such terms as may be
agreed upon.
4. Base Salary: Kalman's base compensation for services rendered hereunder will
be $150,000 per annum payable bi-monthly, payable in arrears on the 15th and on
the final day of the month. Anything herein to the contrary notwithstanding
Kalman may supply the services he is to provide hereunder through a wholly owned
entity such as a Sub Chapter S corporation or a LLC; provided, however, that he
is the supplier of the services for such entity. He may also designate that
entity as the party to whom payments are to be made hereunder by UVGI, its
affiliates and subsidiaries.
5. Incentive Compensation: (a) For Year l-Should the gross revenues, for the
first twelve months of this Agreement for the product lines being presently
acquired by UVGI or its subsidiaries from you or entities controlled by you,
together with the gross revenues generated from any additional product lines
developed by the subsidiary or division of UVGI carrying on your former A.K.S.
Jewelry Manufacturing Corp. and AKS International AA Corp business, exceed Six
Million Dollars, but are less then Eight Million Dollars, you will receive UVGI
shares of One Hundred Thousand Dollars in value as determined below. Should the
gross revenues for such measuring period equal or exceed Eight Million Dollars,
but are less then Ten Million Dollars, Kalman, or designee, will receive Two
Hundred Thousand Dollars in value as determined below. Finally, should gross
revenues for such measuring period equal or exceed Ten Million Dollars then
Kalman will receive Two Hundred and Fifty Thousand in value as determined below.
(b) For Year 2- Should the gross revenues, for the second twelve months of
this Agreement for the product lines acquired by UVGI or its subsidiaries from
Kalman or entities controlled by Kalman, together with the gross revenues
generated from any additional product lines developed by the subsidiary or
division of UVGI carrying on Kalman's former A. K. S. Jewelry Manufacturing
Corp. and AKS International AA Corp. business, exceed Eight Million but are less
than Ten Million Dollars, Kalman, or designee, will receive UVGI shares of One
Hundred Thousand Dollars as determined below. Should the gross revenues for such
measuring period exceed Ten Million Dollars but are less than Twelve Million
Dollars Kalman or designee will receive UVGI shares of Two Hundred Thousand in
value as determined below. Should the revenues for such measuring period exceed
Thirteen Million Dollars, Kalman or designee will receive UVGI shares of Two
Hundred and Fifty Thousand in value as determined below.
(c) For Year 3- Should the gross revenues, for the third twelve months of this
Agreement for the product lines acquired by UVGI or its subsidiaries from Kalman
or entities controlled by Kalman , together with the gross revenues generated
from any additional product lines developed by the subsidiary or division of
UVGI carrying on Kalman's former A. K. S. Jewelry Manufacturing Corp. and AKS
International AA Corp. business, exceeds Ten Million Dollars but are less than
Twelve Million Dollars Kalman or designee will receive UVGI shares of One
Hundred Thousand Dollars value as determined below. Should the gross revenues
for the measuring period exceed Twelve Million but are less than Fourteen
Million Dollars for the measuring period, Kalman or designee will receive UVGI
shares of $200,000 in value as determined below. Should the gross revenues for
the measuring period exceed
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Fourteen Million Dollars for the measuring period, Kalman or designee shall
receive UVGI shares of $250,000 in value as determined below.
(d) Should Kalman resign or be terminated as an independent contractor of UVGI
during a measuring period the amount of incentive compensation he may be
entitled to shall be pro-rated for the portion of the period he was employed.
Thus, for example, if Kalman's revenues generated in the first quarter of year 3
are such, that when projected over the four quarters of such year would yield 13
Million Dollars (when such remaining quarters are counted as producing the equal
of last years like quarters adjusting for holidays that may shift into different
quarters) than Kalman shall receive shares valued at $50,000 (one fourth of
$200,000).
The shares to be issued will be issued promptly after completion of UVGI's
audit for the applicable fiscal year. As a publicly traded company UVGI is
required to file its financial statements in its Annual Report on Form 10-K not
later than 90 days following the conclusion of its fiscal year. The number of
shares of UVGI stock you receive as incentive compensation for year 1 will be
determined by dividing the amount of Incentive Compensation earned, utilizing
the above formula, by the closing bid price on a share of UVGI stock on the day
prior to issuance of that stock. For example, if such shares closed at $1. bid
and you earned $250,000 in Incentive Compensation, because gross revenues
exceeded Ten Million Dollars, you would receive 250,000 shares of UVGI. Sale of
those shares shall be registered on Form S-8 as expeditiously as is possible.
Until registered all such shares shall be "Restricted Shares" and shall bear a
legend to that effect.
6. Company Car: UVGI will provide Kalman with a monthly car rental allowance of
four hundred ($400) dollars per month during the term of this Agreement so long
as he is serving as an independent contractor.
7. Benefits: If legally possible Kalman will be provided with fully paid family
health insurance coverage and personal disability insurance comparable to that
provided to the Chairman of the Board of UVGI. If this is legally impossible due
to Kalman's independent contractor status, Kalman will be provided a monthly
amount equal to that expended by UVGI for family health insurance and personal
disability insurance for UVGI's Chairman.
8. Taxes: Kalman, as an independent contractor, is entirely responsible for the
payment of all taxes, be they U. S., foreign, state, or local on his
compensation for services to be provided for hereunder and shall be responsible
for any estimated tax payments that may be required by any applicable law.
9. Termination of the Agreement by the Company: UVGI has the right to terminate
your employment as an independent consultant at any time, with or without cause,
in its sole discretion. In the event of termination Kalman's exclusive remedies
are those set forth in Section 10.
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10. Severance Payment:
(a) If, during the term of this Agreement, UVGI elects to terminate
Kalman's employment as an independent contractor without cause, as defined
below, UVGI shall continue to pay Kalman his base compensation from the date of
termination until the earlier of (i) the date on which Kalman's contract as an
independent contractor would have terminated (including extensions of the same
by mutual written agreement) but for the earlier termination; or (ii) the date
Kalman violates the provisions contained in Item 12 of this Agreement, plus the
Incentive Compensation pro-rated from the beginning of the twelve month period
that measures incentive compensation within which Kalman's agreement was
terminated through the date of termination. Reference is made to Section 5 (d)
hereof for an example as to how the adjustment for incentive compensation is
effected. The foregoing payments are hereinafter referred to as the Liquidated
Termination Payment or the "LTP."
(b) You will not be entitled to the LTP if your termination is either a
result of your death, voluntary departure or due to (or justifiable by) cause
which is defined as: (i) commission of any act of fraud, or intentional material
misrepresentation or serious misconduct in connection with the business of UVGI
or its subsidiaries, including but not limited to, falsifying any documents or
agreements (regardless of form); or (ii) willful breach or habitual neglect of
any material aspect of Kalman's duties, as described in this Agreement, after
written notice and a reasonable opportunity to cure, provided, however that lack
of profitability or growth in the business of UVGI shall not constitute proof,
in of itself, that Kalman has breached or neglected his duties hereunder; or
(iii) while serving UVGI or its subsidiaries as an independent contractor, and
without the written approval of the Chief Executive Officer of UVGI Kalman
performs services for any other corporation or person which is not permitted
hereunder and which competes with UVGI or its subsidiaries; or (iv) Kalman is
convicted by a court of competent jurisdiction of a felony or any crime
involving dishonesty.
Upon termination of Kalman's employment as an independent contractor by
UVGI for any of the reasons defined above, or voluntary termination of the
independent contractor status by Kalman, no Severance Payment will be required
to be made nor will Kalman be entitled to any other benefits under this
Agreement. This provision shall not be construed as limiting any other rights
that UVGI may have against you.
(c) If there is a dispute between Kalman and UVGI as to whether the
termination was justifiable for any of the reasons enumerated above (x) such
termination shall nonetheless be effective, (y) such dispute shall be subject to
litigation pursuant to this agreement, and (z) the LTP payments (i.e. base
compensation and incentive bonus) to be made by UVGI in connection with such
termination shall be deposited into escrow with the Court until the final
resolution of such dispute; provided, however, that in the event Kalman is
successful in such litigation he shall promptly collect all the LTP payments
made into the escrow account and collect form UVGI, any interest that has
accrued on such LTP from the date of such wrongful termination at the legal rate
of the Court. The losing party to any such litigation shall be obligated to
reimburse the other party for all its fees and expenses in conducting such
litigation including without limitation the reasonable attorneys' fees.
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11. Ability to Contract; Kalman has advised UVGI that Kalman has the right to
enter into this independent contractor's arrangement and that Kalman is not
subject to any agreement that would preclude him from entering into the same or
fulfilling the Duties and obligations reasonably expected of him hereunder.
12. Confidentiality, Return of Materials and Competition: (a) As noted before
this offer of employment is made in connection with the sale by you, or entities
controlled by you, of certain business lines, trade secrets patents, other
intellectual property and know how. In addition, during the performance of your
duties on behalf of UVGI, you may receive and be entrusted with certain
additional confidential and/or secret information of a proprietary nature. Other
than as required in connection with your duties, you agree not to disclose, use
or permit anyone else access to, during your employment or anytime thereafter,
any such information which is not publicly available otherwise.
(b) You also agree, upon the termination of your employment for any reason,
to return to UVGI any materials containing any confidential and/or secret
information as well as all property and tangible assets of UVGI.
(c) During the term of Kalman's service as an independent contractor and
for one year thereafter (or any extension of such status), Kalman shall not
directly or indirectly, for himself or as an agent, representative, or employee
of another (i) encourage any employee of UVGI, its affiliates and subsidiaries,
to leave the employ of UVGI to join an entity or person whose business is
competitive with that of UVGI; (ii) encourage any customer, supplier or service
provider of UVGI to terminate such relationship where such action would be
detrimental to UVGI's business as it is then being conducted; and (iii) solicit
business from any then customer of UVGI or one with whom it had solicited
business from or did business with during the preceding 12 months in areas of
business UVGI engages in; provided, however, that should UVGI terminate Kalman
without cause and fail to pay him the LTP it has obligated itself to pay under
Item 10 of this agreement then Kalman may seek and obtain competitive
employment.
13. Survival: This is the entire agreement with regard to the subject matter.
Should any provision of this Agreement be determined to be unenforceable as a
matter of law the arbitrator is authorized to substitute such provision as most
closely meets the intent of UVGI in offering the independent contractor status
to Kalman memorialized in this Agreement.
14. Governing Law: Any dispute relating to this Agreement shall be determined in
New York, New York in the appropriate Court. This Agreement will be governed by
and construed under the laws of the State of New York without regard to the
choice of laws provisions of that state.
United Ventures Group, Inc.
By:
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Xxxxxx Xxxxxxx Xxxxx Xxxxxx CEO
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