Exhibit 10.1
CONSULTING AGREEMENT
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CONSULTING AGREEMENT ("Agreement") dated as of the March 14, 2002, by and
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between PROFESSIONAL MANAGEMENT AND CONSULTING SERVICES GROUP, INC., of Tampa,
Florida ("PMCS"), and PICK-UPS PLUS, INC., a Delaware corporation with its
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principal place of business in Mason, Ohio (the "Company").
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This Agreement supercedes and replaces any and all existing and outstanding
oral or written understandings and/or agreements between the parties with
respect to the subject matter hereof, and any such understandings and/or
agreements shall no longer be valid and of any force or effect.
RECITALS
WHEREAS, the Company desires to contract for the services of PMCS, and PMCS
desires to provide its services to the Company; and
WHEREAS, the Company recognizes the need for the knowledge, talents and
assistance of PMCS, and desires to enter into this Agreement to secure the
foregoing.
AGREEMENT
NOW THEREFORE, In consideration of the mutual promises herein contained,
and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto, intending to be legally bound
hereby, covenant and agree as follows:
1. CONSULTING RELATIONSHIP. The Company agrees to retain the services
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of PMCS as described herein, and PMCS agrees to perform such services to the
Company, and to perform such related work as determined by the Company, on the
terms and conditions set forth in this Agreement. This Agreement shall be
effective as of the date hereof (the "Effective Date").
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2. COMPENSATION. As consideration for the services to be rendered by
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PMCS under this Agreement, the Company agrees to compensate PMCS as follows:
(a) Stock. As consideration for its Consulting Services (as
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defined in Exhibit A) PMCS shall be compensated with Three Million (3,000,000)
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shares of the common stock of the Company (the "Common Shares").
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(b) Warrants. Subject to the provisions of Section 5, below, as
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additional consideration for its Consulting Services, the Company shall grant
PMCS a warrant (the "Warrant") to purchase from the Company all or any part of
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an additional Three Million (3,000,000) shares of the common stock of the
Company (the "Warrant Shares"), in accordance with and subject to the terms,
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conditions and provisions set forth below, and further subject to the specific
terms, conditions and provisions set forth in the Form of Warrant Agreement
attached hereto as Exhibit B. The Warrant Shares shall vest and become
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exercisable as follows:
VESTING DATES NUMBER OF SHARES EXERCISE PRICE EXPIRATION DATES
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September 13, 2002 1,000,000 $ 0.05 March 13, 2004
March 13, 2003 1,000,000 $ 0.10 March 13, 2004
September 14, 2003 1,000,000 $ 0.15 Xxxxx 00, 0000
(x) Fees. In consideration of PMCS's Construction Management
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Services, as defined in Exhibit A, (i) the Company will pay PMCS a fee equal to
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five percent (5%) of the total construction costs of the new store, and (ii)
where PMCS also provides Contractor Services, as defined in Exhibit A, the
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Company will pay PMCS an additional fee equal to twelve percent (12%) of the
total construction costs of the new store, provided however, that such fees
shall be reduced to the extent necessary to maintain the provision of such
services on terms which are not less favorable than those which could be
obtained from a third party in an arm-length transaction at the time.
(e) Expenses. In addition to the above compensation, the
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Company agrees to reimburse PMCS for reasonable expenses, actually incurred by
PMCS in the furtherance of the Company's business, for the following: travel
and accommodations, telephone calls (including business-related calls on PMCS's
cellular phones and business-related long distance calls), entertainment, and
attendance at conferences, conventions and institutes, provided proper
itemization of said expenses is furnished to the Company by PMCS within thirty
(30) days from the date incurred . All such expenditures shall be subject to
the reasonable control of the Company.
3. SERVICES. PMCS agrees to perform such duties and responsibilities
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and to render advice and consulting as may be requested by the Company from time
to time during the Term (as defined below) of this Agreement in connection with
the Company's business throughout the United States. Said consulting services
shall include, but not be limited to, those set forth on Exhibit A attached
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hereto and incorporated by reference herein. PMCS shall use its best efforts to
keep the Company informed of all corporate business opportunities which shall
come to PMCS' attention and appear beneficial to the Company's business, so that
the Company can obtain the maximum benefits from PMCS' knowledge, experience,
and personal contacts. PMCS agrees to subject itself at all times during the
Term of this Agreement to the direction and control of the Company in respect to
the services to be performed. In that regard, and as further consideration for
this Agreement, PMCS agrees to comply with, and abide by, such rules and
directives of the Company, as may be reasonably established from time to time,
and recognizes the right of the Company, in its reasonable direction to, not
inconsistent with this Agreement, change, modify or adopt new policies and
practices affecting the relationship which is the subject of this Agreement, as
deemed appropriate by the Company.
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4. RELATIONSHIP BETWEEN PARTIES. During the Term of this Agreement,
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PMCS shall be deemed to be an independent contractor. PMCS shall be free to
devote its time, energy and skill to any person, firm or company as PMCS deems
advisable, except to the extent PMCS is obligated to devote such time, energy
and skill to the Company as is necessary to perform the terms of this Agreement,
and provided further that PMCS shall devote not less than one half of its
business time and attention to the furtherance of the consulting arrangement set
forth in this Agreement. PMCS shall not be considered as having an employee
status vis- -vis the Corporation, or by virtue of this Agreement to be entitled
to participate in any plans, arrangements or distributions by the Company
pertaining to or in connection with any pension, stock, bonus, profit sharing,
welfare benefits, or similar benefits for the regular employees of the Company.
The Company shall not withhold any taxes in connection with the compensation due
PMCS hereunder, and PMCS will be responsible for the payment of any such taxes
and hereby agrees to indemnify the Company against nonpayment thereof.
Furthermore, PMCS shall have no authority to enter into any contracts binding
upon the Company except as authorized in writing, in advance, by the Company.
5. TERM OF CONSULTING RELATIONSHIP; TERMINATION.
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(a) PMCS's services hereunder shall commence as of the Effective
Date hereof and continue until March 13, 2004 (the "Term").
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(b) The Term of this Agreement, the compensation under Section 2
of this Agreement, and any and all other rights of PMCS under this Agreement or
otherwise as a consultant of the Company will terminate (except as otherwise
provided in this Section 5):
(i) for Reasonable Cause (as defined in Section 5(d), below),
immediately upon notice from the Company to PMCS, or at such later time as such
notice may specify; or
(ii) for Good Reason (as defined below), upon not less than
thirty (30) days' prior notice from PMCS to the Company.
(c) Definition of "Reasonable Cause". For the purpose of this
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Section 5, "Reasonable Cause" means any of the following: (i) PMCS's material
breach of this Agreement; (ii) the failure of PMCS to achieve mutually-agreed
business goals; (iii) PMCS's failure to adhere to any written Company policy, if
PMCS has been given a reasonable opportunity to comply with such policy or cure
its failure to comply (which reasonable opportunity must be granted during the
ten-day period preceding termination of this Agreement); (iv) the appropriation
(or attempted appropriation) of a material business opportunity of the Company,
including attempting to secure or securing any personal profit in connection
with any transaction entered into on behalf of the Company; (v) the
misappropriation (or attempted misappropriation) of any of the Company's funds
or property; or (vi) the conviction of, the indictment for (or its procedural
equivalent), or the entering of a guilty plea or plea of no contest with respect
to, a felony, the equivalent thereof, or any other crime with respect to which
imprisonment is a possible punishment.
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(d) Definition of "Good Reason". For purposes of this Section 5,
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"Good Reason" means: (i) the Company's material breach of this Agreement, or
(ii) a Change of Control (as defined below) if the Successor Company (as defined
in Section 16, below) fails to assume this Agreement in its entirety. For the
purposes of this Agreement, "Change of Control" means a sale outside the
ordinary course of business of more than fifty percent (50%) of the assets or
equity interests in the Company to any person or entity.
(e) Severance Compensation. Effective upon the termination of
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this Agreement, the Company will be obligated to pay PMCS only such compensation
as is provided in this Section 5(e).
(i) Termination by the Company for Reasonable Cause. If the
Company terminates this Agreement for Reasonable Cause (or if PMCS terminates
this Agreement without Good Reason), PMCS shall be entitled to receive accrued
compensation for services performed through the effective date of such
termination, but shall not be entitled to any Severance Compensation or other
amounts in respect of such termination.
(f) Termination of Warrant. The Warrant and the purchase rights
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granted thereunder shall terminate (A) immediately, upon the termination of this
Agreement by the Company for Reasonable Cause or by PMSC without Good Reason;
and (B) 90 days after termination of this Agreement by the Company without
Reasonable Cause or by PMSC with Good Reason, unless this termination provision
is waived by resolution adopted by the Board of Directors of the Company within
30 days of the termination of hereof.
6. COMPLIANCY WITH LAWS. PMCS will comply with all federal and state
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laws, rules and regulations relating to any of PMCS's responsibilities and
duties with the Company, and will not violate any such laws, rules and
regulations.
7. COVENANTS NOT TO COMPETE. Each of PMCS, Xxxxxxx X. Xxxxxx
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("Xxxxxx"), Xxxxxx Xxxxxxxxxx ("Xxxxxxxxxx") and Xxxxx Xxxxxx ("Xxxxxx" and
together with Xxxxxx and Xxxxxxxxxx for the purposes of Sections 7, 8, and 9 of
this Agreement, the "Related Parties"), do hereby acknowledge the following, and
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agree to conform to the following concerning non-competition:
(a) The Company undertakes to disclose to PMCS and the Related
Parties, confidential information and knowledge about the Company's business
policies, accounts procedures and methods. For the purposes of this Agreement,
the term "Confidential Information" shall include, but is not limited to, (i)
any list of suppliers, customers, investors and/or stockholders, including their
names, addresses, phone numbers, amount of investments and similar information,
(ii) any operational information of the Company, including but not limited to
information on the Company's methods of conducting business, profits and/or
losses of the Company, and marketing material, and (iii) any information that
would reasonably be considered proprietary or confidential in nature. The
Company has established a valuable and extensive trade in its products and
services, which business has been developed at a considerable expense to the
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Company. Confidential Information includes not only written information, but
also any such information transferred orally, visually, electronically or by any
other means.
(b) PMCS desires to enter into the service of the Company and by
virtue thereof, PMCS and the Related Parties will become familiar with the
manner, methods, secrets and Confidential Information pertaining to the
Company's business. During the Term of this Agreement, PMCS and the Related
Parties will receive Confidential Information. Through representatives of the
Company, PMCS and the Related Parties will become personally acquainted with the
business of the Company and its methods of operation.
(c) In consideration of the Company's agreement to contract for
PMCS's services, as herein provided, and the disclosure by the Company to PMCS
and the Related Parties of the knowledge and Confidential Information described
above, the Company requests, and PMCS and each of the Related Parties makes the
covenants hereinafter set forth. PMCS and each of the Related Parties
understand and acknowledge that such covenants are required for the fair and
reasonable protection of the business of the Company carried on in the area to
which the covenants are applicable, and that without the limited restrictions on
PMCS's and each of the Related Parties' activities imposed by this Agreement,
the business of the Company would suffer irreparable and immeasurable damage.
The following covenants on the part of PMCS and each of the Related Parties (and
the covenants in Sections 8 and 9 of this Agreement) shall be construed as an
agreement independent of any other provision of this Agreement, and the
existence of any claim or course of action, whether predicated on this Agreement
or otherwise, shall not constitute a defense to the enforcement of such
covenants.
(d) PMCS and each of the Related Parties agrees that during the
Term of this Agreement, and for the period of twelve (12) months immediately
following thereafter, which time period shall be increased by an amount equal to
any time during which PMCS or any of the Related Parties is in violation of this
Agreement, PMCS and each of the Related Parties will not, within the Territory
(hereinafter defined), directly or indirectly, for himself or itself, or on
behalf of others, on his own or its own account, or as a consultant, employee,
agent, or representative of any other person, partnership, firm or corporation:
(i) Compete with the business of the Company by engaging or
participating in or furnishing aid or assistance in competition with the
business of the Company.
(ii) Engage, in any capacity, directly or indirectly, in or
be employed by or consult for, any business similar to the kind or nature of the
business conducted by the Company.
(e) For the purposes of this Section 7, the business of the
Company shall be limited to the truck and SUV aftermarket accessories retailing
industry, and any industries in which the Company operates during the Term of
this Agreement.
(f) "Territory" as referred to in this Section 7, shall be the
states of Florida, Louisiana, Ohio, Washington, and any other states in which
the Company operates during the Term of this Agreement.
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(g). Each restrictive covenant in this Agreement is separate and
distinct from any other covenant set forth herein. In the event of the
invalidity of any covenant, the remaining obligations shall be deemed
independent and divisible. PMCS and each of the Related Parites agree that the
territory set forth is reasonable and necessary for the protection of the
Company. In the event any term or condition is deemed to be too broad or
unenforceable, said provision shall be deemed reduced in scope to the extent
necessary to make said provision enforceable and binding.
(h) The provisions of this Section 7 shall not apply if the
Company terminates PMCS's services without Reasonable Cause prior to the
expiration of the Term.
8. INDUCING EMPLOYEES OF THE COMPANY TO LEAVE. Any attempt on the part
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of PMCS or either of the Related Parties to induce others to leave the Company's
service or employment, or any efforts by PMCS or either of the Related Parties
to interfere with the Company's relationship with its employees or other
consultants, would be harmful and damaging to the Company. PMCS and each of the
Related Parties expressly agrees that during the Term of this Agreement and for
a period of twelve (12) months thereafter (provided said time period shall be
increased by any time during which PMCS or either of the Related Parties is in
violation of this Agreement), PMCS and each Related Party will not in any way
directly or indirectly:
(a) Induce or attempt to induce an employee or other consultant to
sever his or her employment or consulting relationship with the Company;
(b) Interfere with or disrupt the Company's relationship with its
employees or other consultants; and/or
(c) Solicit, entice, take away or employ, any person employed by
or providing consulting services to the Company.
9. CONFIDENTIAL INFORMATION. In connection with this Agreement, the
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Company will furnish Confidential Information to PMCS. PMCS and each of the
Related Parties understands that its execution of this Agreement was and is a
condition precedent for the Company to disclose to each and give each of them
access to the Confidential Information, and as a condition to such disclosure,
each of PMCS and the Related Parties agree as follows:
(a) The Confidential Information will be used solely for the
purpose of the consulting relationship established under this Agreement, and for
no other purpose.
(b) The Confidential Information will be kept secret and
confidential and shall not be disclosed to anyone, without the prior written
consent of the Company. Each person to whom such Confidential Information is
disclosed, with the Company's prior written consent, must be advised of its
confidential nature and of the terms of this Agreement and must agree to abide
by such terms.
(c) Upon request from the Company, (i) the Confidential
Information which is in tangible from will either be destroyed or returned to
the Company, including any copies which may have made, and all abstracts,
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summaries thereof or reference thereto in PMCS's or either of the Related
Parties documents will be destroyed, and PMCS and each of the Related Parties
will certify to the Company that it has done so, and (ii) the Confidential
Information shall not be used with respect to, or in furtherance of, PMCS's
business or in the business of anyone else, whether or not in competition with
the Company, or for any other purpose whatsoever.
(d) Confidential Information does not include any information that
(i) was publicly available prior to PMCS's or either of the Related Parties'
receipt thereof, or (ii) thereafter became publicly available. Information
shall be deemed "publicly available" if it becomes a matter of public knowledge
or is contained in materials available to the public or is obtained from any
source other than the Company, provided that such other source has not, to
PMCS's or either of the Related Parties' knowledge, entered into a
confidentiality agreement with the Company with respect to such information or
obtained the information from an entity or person party to a confidentiality
agreement with the Company.
(e) In the event that PMCS, either of the Related Parties (or
anyone to whom they have transmit the Confidential Information pursuant to this
Agreement) becomes legally compelled to disclose any of the Confidential
Information, PMCS and each of the Related Parties, as the case may be, will
provide the Company with prompt notice so that the Company may seek a protective
order or other appropriate remedy and/or waive compliance with the provisions of
this Agreement. In the event that the Company is unable to obtain such
protective order or other appropriate remedy, PMCS and each of the Related
Parties agrees that it will furnish only that portion of the Confidential
Information which it is advised by counsel is legally required, and PMCS and
each of the Related Parties will exercise its reasonable efforts to obtain a
protective order or other reliable assurance that confidential treatment will be
accorded the Confidential Information so disclosed.
(f) PMCS and each of the Related Parties agrees that it will
indemnify the Company in respect of any and all claims, losses, costs,
liabilities and expenses (including reasonable attorneys' fees) directly or
indirectly resulting from or arising out of any breach of this Section 9.
(g) PMCS and each of the Related Parties understands and agrees
that money damages would not be a sufficient remedy for any breach of this
Section 9, and that the Company shall be entitled to specific performance and/or
injunctive relief as a remedy for any such breach. Such remedy shall not be
deemed to be the exclusive remedy for any such breach of this Section 9, but
shall be in addition to all other remedies available at law or in equity. PMCS
and each of the Related Parties further agree that no failure or delay by the
Company, its agents, or representatives in exercising any right, power or
privilege under this Agreement shall operate as a waiver thereof, nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any right, power or privilege under this Agreement.
10. RETURN OF THE COMPANY'S PROPERTY. On termination of the consulting
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relationship hereunder, regardless of how termination is effected, or whenever
requested by the Company, PMCS shall immediately return to the Company all of
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the Company's property used by PMCS rendering services hereunder or otherwise
that is in PMCS's possession or under PMCS's control.
11. NOTICES. All notices, requests, consents, and other communications
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under this Agreement shall be in writing and shall be deemed to have been
delivered on the date personally delivered or the date mailed, postage prepaid
by certified mail, return receipt requested, or faxed and confirmed, if
addressed to the respective parties as follows:
If to the Company, to it at:
0000 Xxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxx, Xxxx 00000
Attention: Xxxx Xxxxxxxxxx
Fax No.: (000) 000-0000
If to PMCS, to it at:
0000 Xxxxxx Xxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Facsimile No.: 000-000-0000
A party hereto may change its address for the purpose of receiving notices,
demands, and other communications by giving written notice to the other party of
such change.
12. VOLUNTARY AGREEMENT. PMCS represents that he has not been
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pressured, misled or induced to enter this Agreement based upon any
representation by the Company not contained herein.
13. COVENANTS TO SURVIVE. The parties hereto acknowledge that many of
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the terms and conditions of this Agreement are intended to survive the
consulting relationship. Therefore, any terms and conditions that are intended
by the nature of the promises or representations to survive the termination of
the consulting relationship shall survive regardless of whether such provision
is expressly stated as so surviving.
14. ENTIRE AGREEMENT. This Agreement represents the entire Agreement
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between the parties and shall not be subject to modification or amendment by any
oral representation, or any written statement by either party, except for a
dated written amendment to this Agreement signed by PMCS and an authorized
officer of the Company.
15. VENUE AND APPLICABLE LAW. This Agreement shall be enforced and
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construed in accordance with the laws of the State of Florida, and venue for any
action or arbitration under this Agreement shall be in Hillsborough County,
Florida.
16. ASSIGNMENT. This Agreement shall not be assignable by one party
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without the written consent of the other party; provided however, that this
Agreement shall be assignable to any corporation or entity which purchases the
assets of or succeeds to the business of the Company (a "Successor Company").
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Subject to the foregoing, this Agreement shall be binding upon and inure to the
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benefit of the parties hereto and their respective heirs, personal
representatives, successors and assigns.
[Signature page follows.]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
THE COMPANY
Pick-Ups Plus, Inc.
By: ________________________________________
Xxxx Xxxxxxxxxx, Its President
President
PMCS
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Xxxxxxx X. Xxxxxx, Its President
By executing this Agreement, the below undersigned, each in their
individual capacities, hereby agrees to be bound by the provisions contained in
Sections 7, 8, and 9 hereof.
XXXXXX
________________________________________
Xxxxxxx X. Xxxxxx, an Individual
XXXXXXXXXX
________________________________________
Xxxxxx Xxxxxxxxxx, an Individual
XXXXXX
________________________________________
Xxxxx Xxxxxx, an Individual
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EXHIBIT A
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TO CONSULTING AGREEMENT
DATED MARCH 14, 2002
SERVICES OF PMCS
In addition to such other services as may be reasonably requested of PMCS
by the Company, PMCS shall use its best efforts to perform the following
services to the Company:
"CONSULTING SERVICES" - (a) become familiar with the business and
operations of the Company and review and analyze the Company's formal and
informal financial, strategic and business plans; (b) assist and advise the
Company on all issues relating to its growth strategies; (c) provide assistance
and advice to the Company in the development and execution of acceptable merger
and acquisition strategies; (d) assist in the selection and the negotiations of
acceptable sites for the construction of new stores; (e) assist and advise the
Company in all phases of its efforts to secure lines of credit, establishing and
enhancing banking relationships, and the like, in connection with the
acquisition or construction of new stores, and as otherwise needed.
"CONSTRUCTION MANAGEMENT SERVICES" - serve as the construction manger
overseeing all phases of construction at the sites of all new stores.
"CONTRACTOR SERVICES" - where appropriate, provide the total construction
contract, as the contractor of record.
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