EXHIBIT 99.1
CONSULTING AGREEMENT
1. Parties.
1.1. This Consulting Agreement (this "Agreement") is made and
entered into effective as of April 3, 2001, by and between
Entertainment Technology and Programs, Inc., a Delaware corporation, (the
"Company"), whose address is 00000 Xxxxx Xxxxxx Xxxx., Xxxxx
000, Xxxxxxx, Xxxxx 00000 and Fordham, Ltd, a Bahamian corporation, (the
"Consultant"), whose address is 000 Xxxxxxxx Xxx, Xxxxx 000,
Xxxxx Xxxxxx, Xxxxxxx 00000.
2. Recitals.
2.1. This Agreement is made with reference to the following facts
and circumstances.
(a) The Company wishes to engage the services of the
Consultant to advise and consult with the Company on
certain business and financial matters as set forth in this Agreement.
(b) The Consultant is willing to accept such engagement, on
the terms set forth in this Agreement.
2.2. In consideration of the premises, and for other good and
valuable consideration, the receipt of which is hereby
acknowledged, the Company and the Consultant agree as follows.
3. Engagement.
3.1. The Company hereby engages the services of the Consultant,
as an independent contractor, for a period of one year
beginning on the date hereof, and ending one year from and after the date
hereof (the "Term"), and the Consultant hereby accepts such
engagement, for the purposes set forth in section 3.2. below.
3.2. The scope of the services to be rendered by the Consultant to
the Company are and are limited to the following:
(a) The Consultant shall, from time to time as the Company
may request, advise and consult with the Company's
board of directors and executive officers regarding (i) the Company's
merger and acquisition strategies, including the
evaluation of targets and the structuring of transactions; (ii) the
Company's investor relations; and (iii) the Company's
business development activities, including major geographic and service
expansion plans.
(b) The Consultant shall devote such time to this
engagement as is reasonably necessary, but the Consultant
need not devote his full time or attention to the engagement. The
Company recognizes that the Consultant has numerous
clients and engagements, and that this engagement is not exclusive.
(c) The services need not be rendered at the
Company's offices and may be rendered by telephonic
communication; provided, however, that upon the Company's request and
reasonable notice, the Consultant will attend meetings
of the Company's board of directors and executive officers for the
purpose of advising and consulting with them with respect
to matters within the scope of this engagement.
(d) Anything in this Agreement to the contrary
notwithstanding, the services rendered by the Consultant under
this Agreement shall not include any services in connection with the
offer or sale of securities and will not directly or
indirectly promote or maintain a market for the Company's securities.
4. The Consultant's Fees and Expenses.
4.1. The Company shall pay the Consultant as a fee for his services
under this Agreement (the "Consulting Fee") 325,000
shares (the "Shares") of the Company's common stock ("Common Stock"). The
Consulting Fee shall be fully earned and non-refundable in
consideration of the Consultant's execution of this Agreement.
4.2. Promptly upon the execution of this Agreement, this Agreement
shall be registered under the Securities Act of 1933, as
amended, pursuant to a registration statement on Form S-8. Immediately
thereafter, the Company shall cause the Shares to be issued
to Xxxxxx X. Xxxxxxxx, on behalf of the Consultant, pursuant to the terms of
this Agreement. The certificates representing the Shares
shall not contain any restrictive legends. In connection with the issuance
of the Shares to the Consultant, the Consultant hereby
represents and warrants to the Company that the Consultant is an "accredited
investor" as defined by paragraph (a) of SEC Rule 501.
4.3. The Company shall issue irrevocable instructions to its transfer
agent (the "Irrevocable Transfer Agent Instructions")
to issue the certificates representing the Shares in Depository Trust
Corporation ("DTC") form, free and clear of any legend,
restriction or stop order, and deliver the shares, so registered, to DTC
for the account designated by Consultant. The Company
warrants that no instruction other than the Irrevocable Transfer Agent
Instructions referred to in this Section 4.3 will be given by
the Company to its transfer agent and that the Shares shall otherwise
be freely transferable on the books and records of the
Company. Nothing in this Section 4.3 shall affect in any way the
Consultant's obligations and agreement to comply with all
applicable securities laws upon resale of the Shares. The Company acknowledges
that a breach by it of its obligations hereunder will
cause irreparable harm to Consultant by violating the intent and purpose of
the transaction contemplated hereby. Accordingly, the
Company acknowledges that the remedy at law for a breach of its obligations
under this Section 4.3 will be inadequate and agrees, in
the event of a breach or threatened breach by the Company of the provisions
of this Section 4.3, that Consultant shall be entitled,
in addition to all other available remedies, to an injunction restraining
any breach and requiring immediate issuance and transfer,
without the necessity of showing economic loss and without any bond or other
security being required.
4.4. The Shares delivered to the Consultant for his services under
this Agreement shall include the Consultant's costs and
expenses incurred in the performance of this Agreement, including travel,
lodging, meals and legal fees.
5. Confidential Information.
5.1. The parties hereto recognize that a major need of the Company is
to preserve its specialized knowledge, trade secrets,
and confidential information. The strength and good will of the Company is
derived from the specialized knowledge, trade secrets, and
confidential information generated from experience with the activities
undertaken by the Company and its subsidiaries. The
disclosure of this information and knowledge to competitors would be
beneficial to them and detrimental to the Company, as would the
disclosure of information about the marketing practices, pricing practices,
costs, profit margins, design specifications, analytical
techniques, and similar items of the Company and its subsidiaries. By reason
of his being a Consultant to the Company, Consultant has
or will have access to, and will obtain, specialized knowledge, trade
secrets and confidential information about the Company's
operations and the operations of its subsidiaries, which operations
extend through the United States. Therefore, Consultant
recognizes that the Company is relying on these agreements in entering into this
Agreement:
5.2 During and after the Term Consultant will not use, disclose to
others, or publish any inventions or any confidential
business information about the affairs of the Company, including but not
limited to confidential information concerning the Company's
products, methods, engineering designs and standards, analytical techniques,
technical information, customer information, employee
information, and other confidential information acquired by him in the
course of his past or future services for the Company.
Consultant agrees to hold as the Company's property all memoranda, books,
papers, letters, formulas and other data, and all copies
thereof and therefrom, in any way relating to the Company's business and
affairs, whether made by him or otherwise coming into his
possession, and on termination of his employment, or on demand of the Company,
at any time, to deliver the same to the Company within
twenty four hours of such termination or demand.
5.3 During the Term Consultant will not induce any employee of the
Company to leave the Company's employ or hire any such
employee (unless the Board of Directors of the Company shall have authorized
such employment and the Company shall have consented
thereto in writing).
6. Arbitration of Disputes, Litigation Expenses.
6.1. Any controversy or claim arising out of or relating to any
acts or omissions of either party hereto or any of the
Company's officers, directors, agents, affiliates, associates, employees or
controlling persons shall be settled by arbitration under
the Federal Arbitration Act in accordance with the commercial arbitration
rules of the American Arbitration Association ("AAA") and
judgment upon the award rendered by the arbitrators may be entered in any
court having jurisdiction thereof. In such arbitration
proceedings, the parties shall be entitled to any and all remedies that
would be available in the absence of this Section and the
arbitrators, in rendering their decision, shall follow the substantive
laws that would otherwise be applicable. The parties
acknowledge that the subject matter of this Agreement is of unique value to
Consultant and agree that Consultant shall have the right
to specific enforcement of this Agreement. The arbitration of any dispute
pursuant to this Section shall be held in Houston, Texas.
Notwithstanding the foregoing in order to preserve the status quo pending the
resolution by arbitration of a claim seeking relief of
an injunctive or equitable nature, any party, upon submitting a matter to
arbitration as required by this Section, may simultaneously
or thereafter seek a temporary restraining order or preliminary injunction from
a court of competent jurisdiction pending the outcome
of the arbitration.
6.2. In the event of any litigation or other proceeding between the
Company and the Consultant with respect to the subject
matter of this Agreement and the enforcement of the rights hereunder, the
losing party shall reimburse the prevailing party for all
of his/its reasonable costs and expenses, as well as any forum fees,
relating to such litigation or other proceeding, including,
without limitation, his/its reasonable attorneys' fees and expenses, provided
that such litigation or proceeding results in a
(a) final settlement requiring payment to the prevailing
party; or
(b) final judgment.
7. Miscellaneous.
7.1. Relationship. The relationship between the Company and
the Consultant created by this Agreement is that of
independent contractors. Consultant understands and agrees that (i)
Consultant will not be treated as an employee of the Company for
federal tax purposes; (ii) Company will not withhold on behalf of Consultant
pursuant to this Agreement any sums for income tax,
unemployment insurance, social security, or any other withholding pursuant
to any law or requirement of any governmental body
relating to Consultant; (iii) all of such payments, withholdings, and
benefits, if any, are the sole responsibility of Consultant;
and (iv) Consultant will indemnify and hold Company harmless from any
and all loss or liability arising with respect to such
payments, withholdings, and benefits, if any. In the event the Internal
Revenue Service or any other governmental agency should
question or challenge the independent contractor status of Consultant, the
parties agree that Consultant and Company shall have the
right to participate in any discussion or negotiation occurring with such
agency or agencies, irrespective of who initiates the
discussion or negotiations. The services to be rendered by the Consultant
pursuant to this Agreement do not include the services or
activities of an "investment adviser," as that term is defined by U.S.
federal or state laws and, in performing services under this
Agreement, the Consultant shall not be deemed to be an investment adviser under
such laws.
7.2. Indemnity. The Company hereby agrees to defend, indemnify,
and hold the Consultant, and his employees, agents,
partners and affiliates harmless from and against any and all claims, damages,
judgments, penalties, costs, and expenses (including
attorney fees and court costs now or hereafter arising from the enforcement
of this clause) arising directly or indirectly from the
activities of the Consultant or any of his employees, agents, partners or
affiliates under this Agreement, or from the activities of
the Company or any of its shareholders, officers, directors, employees,
agents, partners or affiliates, whether such claims are
asserted by any governmental agency or any other person. This indemnity shall
survive termination of this Agreement.
7.3. Advertisement. The Company agrees that the Consultant has
the right to place advertisements in financial and other
newspapers and journals at his own expense describing his services to the
Company.
7.4. Notices. Any notice or other communication required or
permitted to be given shall be in writing and shall be mailed
by certified mail, return receipt requested (or by the most nearly comparable
method if mailed from or to a location outside of the
United States), or delivered against receipt to the party to whom it is to
be given at the address of such party set forth in the
preamble to this Agreement (or to such other address as the party shall have
furnished in writing in accordance with the provisions
of this Section). Any notice given to any corporate party shall be addressed
to the attention of the Corporation Secretary. Any
notice of other communication given by certified mail (or by such
comparable method) shall be deemed given at the time of
certification thereof (or comparable act), except for a notice changing a
party's address which will be deemed given at the time of
receipt thereof.
7.5. Survival of Obligations. The obligations of the parties under
Sections 6 and 7.2 of this Agreement shall survive the
termination for any reason of this Agreement (whether such termination is by
the Company, by the Consultant, upon the expiration of
this Agreement or otherwise).
7.6. Severability. In case any one or more of the provisions or part
of the provision contained in this Agreement shall
for any reason be held to be invalid, illegal or unenforceable in any respect
in any jurisdiction, such invalidity, illegality or
unenforceability shall be deemed not to affect any other jurisdiction
or any other provision or part of a provision of this
Agreement, but this Agreement shall be reformed and construed in such
jurisdiction as if such provision or part of a provision held
to be invalid or illegal or unenforceable had never been contained herein
and such provision or part reformed so that it would be
valid, legal and enforceable in such jurisdiction to the maximum extent
possible. In furtherance and not in limitation of the
foregoing, the Company and Consultant each intend that the covenants
contained in Section 5 shall be deemed to be a series of
separate covenants, one for each county of the State of Delaware and one for
each and every other state, territory or jurisdiction of
the United States and any foreign country set forth therein. If, in any
judicial proceeding, a court shall refuse to enforce any of
such separate covenants, then such enforceable covenants shall be deemed
eliminated from the provisions hereof for the purpose of
such proceedings to the extent necessary to permit the remaining separate
covenants to be enforced in such proceedings. If, in any
judicial proceeding, a court shall refuse to enforce any one or more of such
separate covenants because the total time thereof is
deemed to be excessive or unreasonable, then it is the intent of the parties
hereto that such covenants, which would otherwise be
unenforceable due to such excessive or unreasonable period of time, be
enforced for such lesser period of time as shall be deemed
reasonable and not excessive by such court.
7.7. Entire Agreement, Amendment. This Agreement contains the
entire agreement between the Company and the Consultant with
respect to the subject matter thereof. Consultant acknowledges that he
neither holds any right, warrant or option to acquire
securities of the company, nor has the right to any such rights, warrants
or options, except pursuant to this Agreement. This
Agreement may not be amended, waived, changed, modified or discharged except
by an instrument in writing executed by or on behalf of
the party against whom any amendment, waiver, change, modification or discharge
is sought.
7.8. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Texas;
provided, however, if any provision of this Agreement is unenforceable
under Texas law, but is enforceable under the laws of the
State of Delaware, then Delaware shall govern the construction and
enforcement of that provision. The courts of the State of Texas
shall have exclusive jurisdiction for any action arising out of or related to
this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement,
effective as of the date first above written.
The Consultant: The Company:
Fordham, Ltd. Entertainment Technology and Programs, Inc.
By:_/s/Xxxxxx X. Johnston__________ By:_/s/Xxxxx X. Butcher__________
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Xxxxxx X. Xxxxxxxx, President Xxxxx X. Xxxxxxx, President and Chief
Executive Officer
Date signed __________________________ Date signed __________________________
