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EXHIBIT 10.3
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT ("Agreement"), dated as of the 1st day of
April, 2000, is entered into by and between All-Star Car Wash, Inc., a Nevada
corporation (the "Company"), and Xx. Xxxx Xxxxxx residing at 0000 Xxxxxxxxx
Xxxxxxxx, Xxxx Xxxxxx, XX 00000 (the "Consultant").
WITNESSETH:
WHEREAS, Company desires to obtain the services of the Consultant on a
part time basis; and
WHEREAS, Consultant desires to enter into this Agreement to render
services to the Company upon the terms and conditions contained herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound hereby, agree as follows:
Employment. For the term provided in Section 2, the Company hereby employs the
Consultant on a part time basis as its Vice President for Sports and
Entertainment Marketing, and the Consultant hereby accepts that employment, upon
the terms and conditions hereinafter set forth.
Term of Employment. The Consultant's term of employment under this Agreement
shall commence as of April 1, 2000 and shall continue in effect through the
third anniversary of the date of the closing of the acquisition by the Company
or any of its subsidiary corporations of its first car wash (the "Original
Term") estimated to be on or before April 1, 2000 unless extended as provided in
the next sentence or unless terminated sooner as provided elsewhere in this
Agreement. Notwithstanding the foregoing, on the last day of the Original Term
(the "First Extension Date") and again on the one year anniversary of the First
Extension Date if the Original Term is extended as provided below (the "Second
Extension Date"), the term of this Agreement shall automatically be extended for
one additional year unless, not later than 90 days prior to the First Extension
Date or the Second Extension Date, as the case may be, the Company shall have
given written notice to the Consultant that this Agreement will not be extended.
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Duties of the Consultant.
(a) The Consultant agrees, during the term of the Consultant's
employment hereunder, to devote thirty five percent (35%) of his
regular working time, that is an average of not less than 14
hours per week, using his skills and best efforts, in accordance
with the Company's policies and procedures, to the promotion and
marketing of the car wash businesses operated by the Company and
its subsidiaries, subject to such directions with respect
thereto as shall be given the Consultant by the Board of
Directors of the Company or the Board of Directors of E-Star
Holding Corp., of which corporation the Company is a wholly
owned subsidiary, or by the presidents of either the Company or
of E-Star Holding Corp. The Consultant shall also perform such
duties not inconsistent with his position as an executive
officer of the Company, nor requiring more than the limited
amount of time that the Consultant is required to devote under
the terms of this Consulting Agreement, as shall be assigned to
him by the president or the Board of Directors of either the
Company or of E-Star Holding Corp. Unless otherwise agreed to in
advance by the Company, the Consultant shall not accept any
employment with any other person or entity, become self-employed
in any capacity, or engage in any activities which are
considered by the Company to be detrimental to the business of
the Company. The Consultant shall perform his duties hereunder
in such locations as the Company or its subsidiaries are
conducting business from time to time, it being acknowledged
that the Company and its subsidiaries intend to conduct business
throughout the United States, and shall undertake reasonable
business travel as may be necessary to perform his duties
hereunder.
(b) The Consultant covenants that all services to be performed by
the Consultant pursuant to his employment hereunder shall be
performed in accordance with all applicable legal requirements.
Termination of Agreement. During the term of the Consultant's employment
hereunder, the Consultant's employment with the Company may not be terminated by
the Company or the Consultant for any reason or under any circumstances, except
that the Company may terminate this Agreement as follows:
1. Upon the death of the Consultant; provided, that the Company
shall pay to the estate of the Consultant the compensation which would otherwise
be payable to the Consultant for one hundred eighty (180) days after the date of
death.
2. For "Cause", which for purposes of this Agreement shall mean
that:
(i) The Consultant shall have (A) committed fraud or
embezzlement, (B) materially breached any of the
provisions of Sections 8, 9, 10 or 12 of this Agreement,
or (C) materially breached, or failed to perform and
discharge, his duties hereunder.
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(ii) The Consultant shall have (A) been convicted of any
felony, (B) committed an act of moral turpitude, or (C)
engaged in conduct intended to result in substantial
personal enrichment of the Consultant at the expense or
otherwise to the detriment of the Company or any of its
affiliates or subsidiaries;
(iii) The Consultant shall have failed to comply on a timely
basis with a reasonable directive of the Board of
Directors of the Company not inconsistent with the terms
of this Agreement; or
(iv) The Consultant shall have engaged in misconduct which
materially injures the reputation, business, business
relationships of the Company or its affiliates,
monetarily or otherwise.
Termination for Cause pursuant to Section 4(b)(i)(C) or 4(b)(ii)
shall be effective only if the Consultant's material breach or
failure to perform remains unremedied for thirty days after
delivery by the Board of Directors of the Company to the
Consultant of a written notice specifying the conduct for which
this Agreement will be terminated for Cause.
If the Consultant's employment is terminated upon the occurrence
of one or more of the events specified in this subsection 4(b),
then the Consultant shall only be entitled to receive his then
unpaid salary (as defined in Section 5(a) prorated to the
effective date of termination), and shall not be entitled to any
other compensation or employment benefits for any period after
the effective date of termination.
3. Upon "disability" provided that the Company shall pay to the
Consultant the compensation which would otherwise be payable to the Consultant
for sixty (60) days from the effective date of termination of the Consultant's
employment hereunder due to his disability. For purposes of this Agreement,
"disability" means the Consultant's incapacity due to physical or mental
illness, which renders the Consultant unable to perform the Consultant's duties
hereunder for ninety (90) consecutive days, and, within ten (10) days after the
Company notifies the Consultant in writing that the Company intends to terminate
the Consultant's employment in accordance with this Section 4(c), the Consultant
shall not have returned to the performance of the Consultant's duties hereunder
on the part-time basis as provided in this Agreement for a period of at least
thirty (30) consecutive days.
4. In the event that on or prior to 60 days from the date hereof,
the Company or a subsidiary of the Company has not consummated the first
acquisition of a car wash.
Compensation.
The Company agrees to pay the Consultant for all services rendered under
this Agreement at the rate of $72,000 per year.
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E-Star's Common Stock
1. As further compensation to the Consultant, the Company shall
cause E-Star Holding Corp ("E-Star") to issue to the Consultant, at no cost to
the Consultant, an aggregate of thirty thousand (30,000) shares of E-Star's
common stock (the "Initial Shares") as follows: five thousand (5,000) shares
upon the execution of this Agreement and if the Consultant is then still
employed by the Company an additional five thousand (5,000) shares on each of
the next five half year anniversaries of the date this Agreement is executed by
both the Company and the Consultant. All such shares shall be "restricted
securities", as such term is defined in Rule 144(a) promulgated under the
Securities Act of 1933, as amended, and the certificates evidencing such shares
shall have the following legend endorsed thereon:
THE SHARES OF STOCK REPRESENTED BY
THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, AND MUST BE HELD
INDEFINITELY UNLESS REGISTERED UNDER
SUCH ACT OR UNLESS AN EXEMPTION
FROM SUCH REGISTRATION IS AVAILABLE.
2. The Consultant shall not be entitled to receive any additional
shares because of any extension of this Consulting Agreement.
Compensation-Fringe Benefits. The Consultant shall receive the following
additional benefits, which may be extended or increased, but not reduced, by the
Company in its discretion:
1. During the term of the Consultant's employment hereunder, the
Consultant shall also be eligible to participate in any of the Company's
medical, dental (if any), life insurance, disability (if any) and any pension,
profit sharing and stock option plan, then in effect, but only if, and to the
extent, such participation is permitted by such plan.
2. The Company shall reimburse the Consultant for business expenses
reasonably incurred in connection with his employment in accordance with the
Company's reimbursement practice upon presentation of adequate documentation.
Noncompetition. The Consultant covenants and agrees that during the term of his
employment hereunder and for a period of up to three (3) years from the later of
the (a) termination of this Agreement or (b) the termination of the Consultant's
employment with the Company (regardless of the reason for such termination of
employment), the Consultant shall not, directly or indirectly (i) enter into the
employ of or render any services to (A) any person, or entity engaged in any
enterprise that owns or operates one or more car washes within three (3) miles
of any location where the Company or any of its subsidiaries operate a car wash
(a "Competitive Business") or (B) any entity or enterprise involved in the
consolidation of individual or group of car washes (a "Competitive Consolidating
Company"), (ii) engage in any Competitive Business or any Competitive
Consolidating Company for his own account; (iii) become associated with or
interested in any Competitive Business or any Competitive Consolidating Company
as an individual, partner, equity owner, creditor, director, manager, officer,
principal,
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agent, employee, director, consultant, advisor or in any other relationship or
capacity, or (iv) call on, solicit, take away, accept as a client, agent or
customer or attempt to call on, solicit, take away or accept as a client, agent
or customer, any individual, agent or entity that (A) was a client, agent or
customer of the Company or any of its subsidiaries during the twenty four (24)
month period immediately preceding any such act or (B) that was a client, agent
or customer of the Company or any of its subsidiaries at any time and with which
the Consultant had direct or indirect contact in the scope of the Consultant's
employment by the Company. However, nothing in this Agreement shall preclude the
Consultant from investing in the securities of any corporation or other business
entity which is engaged in a Competitive Business or a Competitive Consolidating
Company if such securities are traded on a regional or national stock exchange
or quoted through an inter-dealer quotation system and if such investment does
not result in the Consultant beneficially owning, at any time, more than 1% of
the publicly-traded equity securities of such competitor. Prior to accepting
employment or a consulting arrangement with any business or entity competing
with the Company, the Consultant shall notify the Company in writing of the name
of the prospective employer, clearly describing each of such prospective
employer's businesses and describing in detail the services to be performed by
the Consultant in the proposed employment. The Company shall promptly notify the
Consultant whether it believes that such new employment will violate the
restrictions imposed upon the Consultant pursuant to the provisions of this
Section 8. The Company's response shall be made within forty-eight (48) hours
after receipt of such written notification from the Consultant but the Company's
response made later than 48 hours if the delay is for reasonable cause, shall
also be deemed to have been timely made.
If the Company wishes to continue the restrictions of this Section 8 for
a further term, but not to exceed an additional two (2) years, the
Company shall pay to the Consultant compensation at the rate of the
annual salary payable to the Consultant at the time of the termination
of Employee's employment pursuant to Section 5. In such event, the
provisions of this Section 8 shall be applicable for so long as such
additional compensation payments continue.
Confidential Data.
1. The Consultant further agrees that during the term of employment
hereunder and at all times thereafter he will keep confidential and not,
directly or indirectly, divulge to anyone nor use or otherwise appropriate for
the Consultant's own benefit or the benefit of any third party, any material
information obtained or learned by him during the course of his employment with
the Company (for the purposes of this Section 9 and Sections 10, 11, 12, 13 and
14, the term "Company" includes the Company's parent and the Company's and such
parent's subsidiaries, and any successor to any such entity) relating to the
operational, financial, business, or other affairs of the Company, including but
not limited to pricing, marketing, customer, financial, mailing list, sales,
technical, or other proprietary or non-public information, as well as designs,
procedures, plans, methods, strategies, techniques of production or service,
vendors, methods, confidential records, formulas, computer software programs or
any portions of logic comprising said programs, clients, customers, financial
planning and information, of the Company or any of its subsidiaries
("Confidential Data"). The Consultant hereby acknowledges and agrees that the
prohibitions against disclosure of the Confidential Data recited herein are in
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addition to, and not in lieu of, any rights or remedies which the Company may
have available pursuant to the statutory laws and/or at common law to prevent
the disclosure of trade secrets or proprietary information, and the enforcement
by the Company of its rights and remedies pursuant to this Agreement shall not
be construed as a waiver of any other rights available or remedies which it may
possess in law or equity absent this Agreement.
2. This Agreement imposes no obligation upon the Consultant with
respect to Confidential Data which (i) at the time of disclosure or thereafter
is generally available to and known by the public (other than as a result of a
disclosure directly or indirectly by the Consultant or by any other person or
entity bound by a confidentiality agreement with the Company), (ii) was
available to the Consultant from a source other than the Company or its
directors, officers, employees, agents or advisors whom the Consultant
reasonably believed was permitted to divulge such information or (iii) subject
to the next two sentences, is disclosed in response to legal process. In the
event the Consultant becomes legally compelled (by deposition, interrogatory,
request for documents, subpoena, civil investigative demand or similar process)
to disclose any Confidential Data, the Consultant shall provide the Company with
prompt written notice of such requirement so that the Company may seek a
protective order or other appropriate remedy. In the event that such protective
order or other remedy is not obtained, the Consultant agrees to furnish only
that portion of the Confidential Data which is specifically required and (at the
Company's expense) to exercise best efforts to obtain reliable assurance that
confidential treatment will be accorded such of the disclosed information that
the Company so designates.
Non-solicitation of Employees. The Consultant covenants that during the term of
his employment hereunder and for a two (2) year period following the termination
of the Consultant's employment for any reason whatsoever, the Consultant shall
neither, directly or indirectly, induce or attempt to induce any employee of the
Company or of any successor to the Company, to terminate his or her employment
with the Company, and, during said period, the Consultant shall not directly or
indirectly, hire, employ or recruit or cause any other person or entity to hire,
employ or recruit any current or former officer, manager, supervisor or other
significant employee of the Company.
Property of The Company. The Consultant acknowledges that from time to time in
the course of providing services pursuant to this Agreement, the Consultant
shall have the opportunity to inspect and use Confidential Data and other
property, both tangible and intangible, of the Company and the Consultant hereby
agrees that the Confidential Data and such other property and information shall
remain the exclusive property of the Company and the Consultant shall have no
right or proprietary interest in the Confidential Data or such property of the
Company.
Developments and Discoveries of the Consultant. In consideration of employment
of the Consultant, any and all technical information, designs, procedures,
plans, methods, technique of production, services or sales development,
inventions, improvements, discoveries, processes, programs or systems, in the
broadest sense whether or not patentable, trademarkable, or registerable,
discovered by the Consultant, either alone or with others, during the
Consultant's employment with the Company or within one hundred and eighty (180)
days thereafter and that (i) are based in whole or in part upon Confidential
Data, or (ii) are useful in, or related to the business, work or interests of
the Company, or (iii) result from any work that may be done by the Consultant
for or on behalf of the Company (the "Developments"), shall be fully disclosed
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by the Consultant to the President of the Company promptly and in writing
following their invention, development or discovery. The Developments shall be
the sole and exclusive property of the Company as work for hire, and the
Consultant hereby assigns and agrees to assign to the Company his entire right,
title and interest in and to each Development. Upon the request of the Company,
both during and after the Consultant's employment with the Company, the
Consultant shall cooperate with the Company and its designee(s) in the
procurement and maintenance, at the Company's expense and its discretion, of the
patents, trademarks, service marks, copyrights or other protections of
assignments, certificates or other Company's rights in such Developments and
shall execute, acknowledge and deliver such assignments, certificates and other
documents as the Company may consider necessary or appropriate to vest properly
all rights, titles and interest therein in the Company. If a patent application,
trademark, or copyright registration is filed by the Consultant or on behalf of
the Consultant within one (1) year after termination or the Consultant's
employment with the Company, and that otherwise relates to a portion of the
Company's business with which he Consultant was involved during the Consultant's
employment with the Company, it is to be conclusively presumed that the
Development was conceived by the Consultant during such period of employment.
The Consultant shall notify the President of the Company promptly and in writing
of any such application or registration and shall assign to the Company his
entire right, title and interest in and to such development and in and to such
application or registration.
Equitable relief. The Consultant acknowledges that any breach of Section 9,
Section 10, Section 11 and/or Section 12 hereof cannot reasonably or adequately
be compensated with monetary damages in an action at law and that a breach of
any of such provisions contained in this Agreement will cause the Company
irreparable injury and damage. By reason thereof, the Consultant expressly
acknowledges and agrees that the Company shall be entitled, in addition to any
other remedies it may have under this Agreement or otherwise, to temporary,
preliminary and permanent injunctive and other equitable relief, without the
necessity of the Company posting of a bond and without the Company having to
prove irreparable injury, likelihood of ultimately prevailing on the merits or a
balancing of the equities in its favor, to prevent or curtail any breach or
threatened breach of any of such Sections of this Agreement by the Consultant;
provided, however, that no specification in this Agreement of a specific legal
or equitable remedy shall be construed as an election of remedies or a waiver of
any alternative remedies or a prohibition against the Company pursuing other
legal or equitable remedies in the event of a breach of the terms hereof.
Blue Lining. In the event that any of the provisions Sections 9, 10, 11, 12
and/or 13 are deemed unenforceable by a court of competent jurisdiction because
such unenforceable restriction is overly broad, then the Company and the
Consultant agree that such unenforceable restriction shall be reduced as to such
time, area and/or activity restricted which such court shall deem reasonable and
therefore enforceable.
Sale of Shares. During the term of the Consultant's employment hereunder, the
Consultant agrees not to, directly or indirectly, sell, transfer, assign or
otherwise transfer during any 12-month period in excess of 5,000 shares of
capital stock of the Company (or any interest therein) that was issued at any
time to the Consultant pursuant to this Agreement; provided, however that the
foregoing restriction shall cease to be applicable at such time as the Company's
common stock is listed on the Nasdaq National Market.
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Withholding. In the event that the Consultant is eligible to receive or benefit
from any form of compensation or benefits hereunder, and if the Company shall be
required to withhold any amounts (the "Withholding Taxes") by reason of any
federal, state or local tax laws, rules or regulations in respect of such
compensation or benefit, the Company shall be entitled to deduct and withhold
such amounts from any payments, to be made to, or other compensation or benefits
made available to, the Consultant. In any event, the Consultant shall make
available to the Company, promptly when requested by the Company, sufficient
funds to meet the requirements of such withholding; and the Company shall be
entitled to take and authorize such steps as it may deem advisable in order to
have such funds available to the Company out of any funds or property due or to
become due to the Consultant.
Reliance. Each party to this Agreement acknowledges that each of his/its
covenants contained herein is a material inducement to the other to complete and
to cause him/it to complete this Agreement.
Severability. In the event of any provision of this Agreement or any word,
phrase, clause, sentence or other sentence thereof (including without
limitation, the geographical and temporal restriction contained herein) should
be held to be unenforceable or invalid for any reason, such provision or portion
thereof shall be modified or deleted in such a manner so as to make this
Agreement as modified legal and enforceable to the fullest extent permitted
under applicable laws.
Amendments. This Agreement may be amended only by writing executed by each of
the parties hereto.
Entire Agreement. This Agreement sets forth the entire understanding of the
parties hereto concerning the subject matter hereof and specifically supersedes
all prior contracts, agreements, arrangements, communications, discussion,
representations and warranties, whether oral or written, between the parties
hereto.
Governing Law. This Agreement shall in all respects be governed by and construed
in accordance with the laws of the State of New York, without regard to the
principles or policies or conflicts of law of such state.
Counterparts. This agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original, and all of which together will
constitute one and the same instrument.
Waivers. Any waiver by any party of any violation of, breach of or default under
any provision of this Agreement by the other party shall be effective only if in
writing and no such waiver shall be construed as, or constitute, a continuing
waiver of such provision, or waiver of any other violation of, breach of or
default under any other provision of this Agreement. The failure of any party to
exercise any rights or privileges under this Agreement shall not be deemed to be
a waiver or extinguishment of such rights or privileges, all of which shall
continue to be exercisable.
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Assignment. The Company shall at its sole discretion have the ability to assign
any of its rights or obligations hereunder without prior written consent of the
Consultant. The Consultant shall not assign any rights or delegate any duties
hereunder without prior written consent of the Company.
Successors and Assigns. This Agreement shall be binding upon, inure to the
benefit of, and maybe enforced by, each of the parties to this Agreement and
his/its heirs, administrators, executors, successors and permitted assigns.
Notices. All notices, requests, demands, and other communications required or
permitted hereunder shall be in writing and shall be deemed to have been duly
given, if delivered in person, by facsimile, by United States mail (certified or
registered, postage prepaid, return receipt requested) or by a nationally
recognized overnight courier service to the respective parties, to his residence
in the case of the Consultant or to its principal office in the case of the
Company, with copies to parties respective attorneys as follows: if to the
Company, to Xxxxx Xxxxxxxxx Xxxxxxxx Xxxxx Xxxxx & Bass, LLP, 000 Xxxxxxxxx
Xxxxxx, Xxx Xxxx, XX 00000-0000, fax no. (000) 000-0000, Attn: Xxxxxxx
Xxxxxxxxx, Esq., and if to the Consultant, to
IN WITNESS WHEREOF, the parties have executed this Employment Agreement
the day and year first above written, intending to be legally bound:
ALL-STAR CAR WASH, INC.
By: s/Xxxxx Xxxxxxx
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Name: Xxxxx Xxxxxxx
Title: Director
s/Xxxx Xxxxxx
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Xxxx Xxxxxx
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