CONSULTING AGREEMENT
Consulting Agreement ("Agreement") by and between Software Publishing
Corporation Holdings, Inc., a Delaware corporation (the "Company"), and Target
Capital Corp. ("Target"), and Xxxx Xxxxxxxx ("YG") as of the 17th day of
December, 1998 (the "Effective Date").
In consideration of the mutual covenants hereinafter set forth, and
for other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto hereby agree as follows:
1. TERMS.
1.1 Services. The Company hereby retains Target to provide consulting
services of YG for and during the term hereof, subject to the direction of the
Board of Directors of the Company and the terms and conditions hereof. Target
and YG hereby accept such retention under the terms and conditions set forth in
this Agreement.
1.2 Duties of YG. YG shall provide consulting services for the Company and
shall have such duties as may be reasonably assigned to him from time to time by
the Board of Directors of the Company. YG agrees to devote part of his business
time and services to the faithful performance of the duties, responsibilities,
and authorities which may be reasonably assigned to him hereunder. It is
understood that YG will not be providing his services on a full-time basis.
1.3 Term. Unless sooner terminated as provided in Section 1.5 hereof, this
Agreement has become effective as of the date set forth above and shall continue
in force and effect until the fifth anniversary of the date hereof, unless
extended as further described as follows. The term of this Agreement shall be
extended for an additional 18 month period if at any time during the term of
this Agreement the Company reports net revenues of $40 million or more in any
fiscal year, and shall be extended for another 18 month period if at any time
during the term of this Agreement the Company reports net revenues of $60
million or more in any fiscal year.
1.4 Compensation. Subject to provisions of Section 1.5 hereof as
compensation for services rendered by YG as a consultant under this Agreement,
subject to ratification by the Board of Directors of the Company:
(a) the Company shall pay Target a base compensation equal to
.30% of the Company's net revenue, payable quarterly in arrears; provided,
that the amount payable under this Section 1.4(a) shall be not less than
$125,000 per annum and shall not exceed $250,000 per annum; and provided,
further, that any amount payable under this section 1.4 (a) which exceeds
$125,000 per annum shall be payable only commencing upon such time as the
Company has received net proceeds in an amount not less than $2,000,000
from the sale of equity securities;
(b) the Company shall pay to Target such additional amounts as
may be determined by the Board of Directors of the Company in its sole
discretion;
(c) the Company shall grant to (i) Target 520,000 warrants, and
(ii) United Krasna Organizations 120,000 warrants, each such warrant to
purchase one share of common stock at an exercise price of $.75, each
exercisable immediately and expiring on the seventh anniversary of the date
of this agreement. A form of Warrant is attached as Exhibit "A" hereto. The
Company may also grant such other stock options and other incentives as the
Company's Board of Directors may determine in its sole discretion;
(d) Target shall be entitled to a fee equal to 5% of the net
proceeds of any sale of equity securities by the Company where such net
proceeds equal or exceed $2,500,000 and the placement agent for such sale
was introduced to the Company by Target or YG.
1.5 Termination. Notwithstanding any other provisions in this Agreement:
(a) Death. If YG dies during the term of this Agreement, this
Agreement shall automatically terminate as of the date of YG's death; and
the Company shall have no further obligation to Target or YG or his estate,
except to pay Target any accrued but unpaid compensation under Section 1.4
hereof.
(b) Disability. The Company will provide disability insurance on
YG. In the event YG becomes permanently disabled (as hereinafter defined)
during the term of this Agreement, the Company may terminate this Agreement
by giving one hundred eighty (180) days notice to Target of its intent to
terminate. Upon notice of termination, the Company will provide a
disability payment to Target to provide 75% of Target's then current annual
compensation (including bonuses) for a period of not less than one (1) year
after termination takes effect.
"Permanently Disabled" for the purpose of this Agreement
shall mean the inability to perform all of the duties of YG due to physical
or mental ill health, or any reason beyond the control of YG to perform his
duties, for a minimum on one hundred and eighty (180) consecutive days.
(c) Termination by the Company for Cause. Upon 180 days notice
during the term of this Agreement, the Company may terminate this Agreement
for cause without and further liability hereunder to Target, YG or his
estate, except to pay any accrued but unpaid compensation hereunder. For
purposes of this Agreement, a "for cause" shall mean termination of Target
upon written notification to Target limited, however, to one or more of the
following reasons:
(i) Fraud, misappropriation or embezzlement by Target
or YG in connection with the Company; or
(ii) Gross neglect of duties which has a detrimental
effect on the Company after notice to Target of the particular details
thereof and a period of ninety (90) days to correct such mismanagement
or neglect, if any; or
(iii) Conviction by a court of competent jurisdiction
in the United States of a crime which involves moral turpitude and
management services provided by YG to the Company; or
(iv) Willful and unauthorized disclosure of information
confidential to the Company.
(d) Voluntary Termination by Target. In the event that during the
term hereof, Target shall voluntarily terminate this Agreement, or YG shall
refuse to perform the services required hereunder, then, in such event,
this Agreement shall automatically be terminated and Target shall have the
right to receive any unpaid compensation to the date of termination, but no
other compensation.
1.6 Expense Reimbursement and Travel Advances. Target shall be entitled to
reimbursement for any and all reasonable expenses, including travel and
entertainment, incurred by Target or YG in the performance of this Agreement.
Target will take all actions necessary to maintain the tax deductibility of any
such expenses by the Company and shall submit vouchers prior to reimbursement
for expenses. All expense report vouchers of Target shall be approved by the
President of the Company. Expenses in excess of $1,000.00 per occurrence must be
approved in advance by the President of the Company.
1.7 Protection from Liability. The Company may provide Target and YG with
appropriate insurance coverage as necessary to protect Target and YG from any
and all personal liability incurred in the normal performance of YG's designated
duties. The Company agrees to indemnify Target and YG to the fullest extent
permitted by law for any liabilities in connection with the lawful performance
of services hereunder.
1.8 Medical, Dental and Life Insurance and Disability. Upon the request of
Target or YG, the Company shall, at the Company's sole expense, promptly cause
YG and his immediate family to be included in the group medical, hospital,
dental and drug plans of the Company, in effect and at the time, subject to the
insurance company's requirements being met by YG, which the Company undertakes
to satisfy to the extent within its control.
1.9 Automobile. At the request of Target, the Company shall promptly make
available to YG an automobile and shall pay all business expenses associated
with said automobile. Said automobile may be leased or purchased at the
Company's sole choice and expense and shall be a new full size automobile, which
shall be replaced every three (3) years.
2. PROTECTIVE COVENANTS. Because (i) Target and YG will become fully familiar
with all aspects of the Company's business during the period of this Agreement
with the Company, (ii) certain information of which Target and YG will gain
knowledge during this Agreement is proprietary and confidential information
which is of special and peculiar value to the Company, (iii) if any such
proprietary and confidential information were imparted to or became known by any
persons, including Target or YG, engaging in a business in competition with that
of the Company, hardship, loss and irreparable injury and damage could result to
the Company, the measurement of which would be difficult if not impossible to
ascertain, and (iv) it is necessary for the Company to protect its business from
such damage, the following covenants constitute a reasonable and appropriate
means, consistent with the best interests of Target, YG and the Company, to
protect the Company against such damage and shall apply to and be binding upon
Target and YG as provided herein:
2.1 Non-Competition by Target and YG. Target and YG covenant that, during
the term of this Agreement and for a period of one year thereafter, neither
Target nor YG will engage in or participate in any business which is in
competition with the business of the Company on the date of termination and
which continues during the period of non-competition.
2.2 Trade Secrets, Proprietary and Confidential Information. Target and YG
recognize that this position with the Company is one of the highest trust and
confidence by reason of Target and YG's access to and contact with trade secrets
and confidential and proprietary information of the Company. Target and YG shall
use their best efforts and exercise utmost diligence to protect and safeguard
the trade secrets and confidential and proprietary information of the Company.
Target and YG covenant that during the term of this Agreement and thereafter,
they will not disclose disseminate or distribute to another, nor induce any
other person to disclose, disseminate, or distribute, any trade secret or
proprietary or confidential information of the Company, directly or indirectly,
either Target or YG's own benefit or for the benefit of another, whether or not
acquired, learned, obtained or developed by Target or YG use or cause to be
used, any trade secret, proprietary or confidential information in any way
except as is required in the course of the services to the Company hereunder.
The foregoing shall not apply to information which becomes public or other than
as a result of the prohibited acts of Target of YG. All confidential information
relating to the business of the Company, whether prepared by Target or YG or
otherwise coming into their possession, shall remain the exclusive property of
the Company and shall not, except in the furtherance of the business of the
Company, be removed from the premises of the Company under any circumstances
whatsoever without the prior written consent of the Company.
2.3 Remedies. In the event of breach or threatened breach by Target or YG
of any provision of this Section 2, the Company shall be entitled to apply for
relief by temporary restraining order, temporary injunction, or permanent
injunction and to all other relief to which it may be entitled, including any
said breach, violation or threatened breach or violation. The Company may pursue
any remedy available to it concurrently or consecutively in any order as to any
breach, violation, and the pursuit of any one of such remedies at any time will
not be deemed an election of remedies or waiver of the right to pursue any other
of such remedies as to such breach, violation, or as to any other breach,
violation, or threatened breach or violation.
3. MISCELLANEOUS.
3.1 Notices. All notices, requests, consents and other communications under
this Agreement shall be in writing and shall be deemed to have been delivered
(i) on the date personally delivered or (ii) two days after the date deposited
in a receptacle maintained by the United States Postal Services for such
purpose, addressed as set forth below, or (iii) one day after properly sent by
Federal Express, addressed as set forth below:
If to Target: 00 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
If to the Company: Software Publishing Corporation Holdings, Inc.
0X Xxx Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
with a copy to: Xxxxxxx & Xxxxxxxx, LLC
00 Xxxxxxx Xxxxxxxxx Xxxxxxxxx - Xxxxx 000
Xxxxxxx Field, New York 11553
Either party hereto may designate a different address by providing written
notice of such new address to the other party hereto as provided above.
3.2 Severability. If any provision contained in this Agreement is
determined to be void, illegal or unenforceable, in whole or in part, then the
other provisions contained herein shall remain in full force and effect as if
the provision which was determined to be void, illegal, or unenforceable had not
been contained herein.
3.3 Waiver, Modification and Integration. The waiver by any party hereto of
a breach of any provision of this Agreement shall not operate or be construed as
a waiver of any subsequent breach of any party. This instrument, and the
documents referred to herein, contain the entire agreement of the parties and
supersede any and all other agreements either oral or in writing, between the
parties hereto with respect to services of Target or YG to the Company and
contain all of the covenants and agreements between the parties with respect to
such services in any manner whatsoever. This Agreement may not be modified,
altered or amended except by written agreement of all parties hereto.
3.4 Binding Effect. This Agreement shall be binding and effective upon the
Company and its successors and permitted assigns, and upon Target and YG, their
successors, heirs, representatives, and assigns, as the case may be.
3.5 Governing Law. This Agreement shall be governed by the internal laws of
the State of New York, without regard to its conflicts of law principles.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
TARGET CAPITAL CORP. SOFTWARE PUBLISHING
CORPORATION HOLDINGS, INC.
By: /s/ Xxxx Xxxxxxxx By: /s/ Xxxx X. Xxxxxxxxx
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Name: Xxxx Xxxxxxxx Name: Xxxx X. Xxxxxxxxx
Title: Title: President
/s/ Xxxx Xxxxxxxx
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Xxxx Xxxxxxxx, Personally
