Exhibit 10.10
CONSULTING AGREEMENT
AGREEMENT made as of this 2nd day of April, 1997 by and between Jazz Photo
Corp. ("JAZZ"), a corporation organized under the laws of the State of New
Jersey and having its place of business at 0000 Xxxxxxxx Xxxxxx, Xxxxxx, XX
00000, X.X.X.; and JCB Consultants, Inc. ("JCB"), a corporation organized under
the laws of the State of New Jersey and having its place of business at 00
Xxxxxxxxxx Xxxxx, Xxxxxxxxxx, XX 00000, X.X.X.
WITNESSETH
WHEREAS, JAZZ is engaged in the design, development, marketing,
distribution and sale of cameras and other photographic products worldwide; and
WHEREAS, JCB was recently formed for the purpose of providing to JAZZ and
other businesses in the camera and photographic product business its expertise
in the development and marketing of products in such businesses and the
financing of such businesses; and
WHEREAS, Xxxx X. Xxxxx ("Xxxxx") is the President and principal
shareholder and an employee of JCB and until recently served as Chief Executive
Officer and a director of JAZZ; and
WHEREAS, JAZZ wishes to retain JCB to assure that the services of Xxxxx
continue to be available to it and to use the expertise of Xxxxx, and JCB is
prepared to
make the services of Xxxxx available to JAZZ as described in this Agreement, on
the terms and conditions hereinafter set forth;
NOW, THEREFORE, it is hereby agreed by and between the parties hereto as
follows:
1. Duties
A. JCB agrees to assist JAZZ:
1) with respect to all aspects of the development and
procurement of camera and other photographic products for marketing and sale in
the U.S. and other markets, designing a broad marketing plan, defining and
developing plans for market sectors and timing the introduction of new products
in them, recommending potential vendors and contract manufacturers for its
products and related matters; 2) in supporting sales to customers; 3) in
obtaining institutional debt and equity financing; and 4) in the development of
its business generally, in each case at the request of the senior executives of
the Company and its Board of Directors. JCB will make available the services of
Xxxxx for at least 50 hours during each calendar month during the term of this
Agreement, for the purpose of consulting directly in person and/or by telephone
with Xxxxx X. Xxxxxxxxx ("Xxxxxxxxx"), the Chief Executive Officer of JAZZ. Such
consultations may take place in the offices of JAZZ or in the offices of JCB or
in such other location or locations as may be mutually agreed to by the parties.
B. JCB will render its services as contemplated in this Agreement
directly to Xxxxxxxxx or to other personnel of JAZZ who may from time to time be
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designated by Xxxxxxxxx or JAZZ's Board of Directors. JAZZ shall clearly
identify Xxxxx to its customers, vendors and financing sources as an employee of
JCB, its consultant, and not of JAZZ. Neither JCB nor Xxxxx will be responsible
for decisions or actions taken by JAZZ or any of its officers, directors or
shareholders whether or not based on consultation with JCB, Xxxxx or any other
employee of JCB. Any written disclosure by either party to persons not parties
to this Agreement of its relationship to the other party will be subject to
mutual approval by the parties. The parties will agree to terms and conditions
with respect to oral descriptions of their relationship. In no event will Xxxxx
be characterized as an officer, director, partner or employee of JAZZ.
C. The relationship of JCB and its employees to JAZZ shall be that
of independent contractors during the term hereof. Nothing herein shall be
construed to create any partnership, joint venture, employment, agency or
similar relationship or subject JAZZ, JCB or JCB's employees, including Xxxxx,
to any implied duties or obligations not expressly stated herein. JCB and its
employees, including Xxxxx, shall not have any right, express or implied, to
assume or create any obligation or duty, on behalf of, or in the name of JAZZ,
or to bind JAZZ in any respect whatsoever.
2. Compensation. As compensation for the consulting services rendered
hereunder, JAZZ shall pay JCB with respect to each calendar year of the term of
this Agreement (i) (a) 2.25% of the Net Sales of products of JAZZ up to Ten
Million Dollars ($10,000,000), (b) 4.5% of the Net Sales of products of JAZZ
exceeding Ten Million Dollars ($10,000,000) (the "Threshold Amount") but not
exceeding Twenty Million Dollars ($20,000,000) and (c) 2.25% of Net Sales of
products of JAZZ exceeding
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Twenty Million Dollars ($20,000,000) for such year and (ii) 10% of any
commission revenue earned by JAZZ for the sale of the products of third parties
to others, for which JCB is responsible. "Net Sales" shall mean Gross Revenues
from all products and services of JAZZ, less returns, discounts and allowances
as defined in accordance with generally accepted accounting principles. JAZZ
shall make monthly advance payments hereunder of $15,000 per month. At such time
as Net Sales shall exceed the Threshold Amount, JAZZ shall commence making
minimum monthly payments to JCB of $25,000 per month hereunder. Payments made by
JAZZ in respect of Net Sales for each full calendar year of this Agreement shall
not be more than $300,000. Payments to JAZZ in respect of Net Sales with respect
to any full calendar year of the term of this Agreement shall also not exceed 8%
of the Gross Profit attributable to such Net Sales for such year. "Gross Profit"
shall be determined in accordance with generally accepted accounting principles.
In addition to the foregoing JCB shall be reimbursed for any actual
out-of-pocket expenses reasonably incurred by JCB in connection with travel of
its personnel or otherwise for the performance of its consulting services
hereunder. The parties may from time to time amend this Agreement with respect
to additional compensation to be paid to JCB.
3. Term. This Agreement shall be effective as of January 1, 1997 and shall
continue until December 31, 2001 (the "Term"), unless sooner terminated by
mutual
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agreement of the parties to terminate the Agreement or as otherwise provided in
Section 5 hereof. The terms hereof shall bind the parties hereto immediately
upon the resignation of Xxxxx as an officer and director of JAZZ.
4. Expenses
In addition to the foregoing general expense reimbursement, JAZZ
shall reimburse JCB for:
(a) health benefits identical to those that until his resignation
were being maintained for Xxxxx by the JAZZ; and
(b) the reasonable costs and expenses incurred by JCB for Xxxxx'x
use, operation and garaging of an automobile in connection with the performance
of his duties pursuant to the terms of this Agreement. Such automobile expenses
shall include commutation expenses. JAZZ shall provide an automobile for Xxxxx'x
use at its cost.
5. Termination - This Agreement may be terminated:
5.1 By JAZZ for Cause: JAZZ may, at any time during the Term by
notice to JCB terminate the Term for "Cause". "Cause" shall mean (i) the
continued failure of JCB or Xxxxx to substantially perform its duties to JAZZ;
(ii) Xxxxx'x or JCB's arrest or indictment for any felony or any crime involving
moral turpitude or theft; (iii) theft, fraud or embezzlement, at JAZZ '5
expense; (iv) the material breach by JCB of this Agreement, including any
failure of JCB to make Xxxxx available to perform the services to be rendered by
JCB hereunder; or (v) the inability of any employee of JCB who provides
significant services to JAZZ to perform his duties as a result of his
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addiction to alcohol or drugs, other than drugs legally prescribed and
administered by a duly licensed physician. Prior to terminating the Term for
Cause for any reason set forth herein, JAZZ must give JCB written notice of the
facts and circumstances giving rise to Cause and provide JCB with thirty (30)
days to cure, remedy or rectify the situation.
5.2 By JAZZ for Disability. During the Term, if, solely as a result
of physical or mental incapacity or infirmity (other than alcoholism or drug
addiction), Xxxxx shall be unable to perform in any material respect JCB's
duties under this Agreement for periods aggregating at least six months during
the Term of this Agreement ("Disability Period"), Xxxxx shall be deemed disabled
(the "Disability") JAZZ, by notice to JCB, shall have the right to terminate the
Agreement. Notwithstanding the foregoing, JAZZ shall be required to pay JCB
during the Disability Period.
5.3 Death. The Term shall terminate on the date of Xxxxx'x death.
5.4 By JAZZ Without Cause. JAZZ may cause the Agreement to be
terminated at any time, without Cause, by delivery to JCB of 30 days' prior
written notice of termination.
5.5 Voluntarily by JCB. JCB may cause the Agreement to be terminated
at any time, without Cause, by delivery to JAZZ of 30 days' prior written notice
of termination.
5.6 Termination Payments. Upon termination of the Term pursuant to
the provisions of any of paragraph 5.1, 5.2, 5.3 or 5.5 above, JCB's right to
receive payments pursuant to paragraphs 2 and 4 of this Agreement shall
immediately
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terminate, except for amounts due on account of services rendered or expense
incurred prior to the date of termination and payable to JCB during the
Disability Period. In the event of a termination of the Term by JAZZ pursuant to
the provisions of paragraph 5.4 above, JAZZ shall continue to be obligated to
make the payments provided for in paragraphs 2 and 4 above through December 31,
2001.
6. Exclusivity. During the term of this Agreement and, if the Agreement is
terminated by JAZZ ,for three months thereafter, without the prior consent of
JAZZ, JCB will not perform, and will not permit its employees to perform,
consulting services of the kind contemplated by this Agreement for any other
entity engaged in a business which competes directly with the business of JAZZ
as now conducted.
7. Non-Solicitation. JCB will not solicit or enable others to solicit any
customers of JAZZ for JCB or others to provide products or services to them
during the term of this Agreement.
8. Confidentiality. It is understood that in the course of performing its
consulting services under this Agreement, JCB will become privy to confidential
and proprietary information about the customers, vendors and business of JAZZ.
JCB agrees that such information will be kept confidential and not used by or
divulged to any person except with the express prior written consent of JAZZ.
9. Assignability: Services of Xxxxx. Either party hereto may assign its
rights and obligations under this Agreement to an entity controlled by,
controlling, or under common control with such party, or which succeeds to
substantially all of the
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business of such party, provided, however, that the services of Xxxxx are
essential to the performance by JCB or its assignee of the obligations of JCB
hereunder.
10. Governing Law: Arbitration of Disputes. This Agreement is made in, and
shall be interpreted in accordance with the laws of, the State of New Jersey,
U.S.A. Any disputes arising under or in connection with the interpretation or
performance of this Agreement shall be submitted to arbitration before a single
arbitrator of the American Arbitration Association in New Jersey, in accordance
with the rules thereof, unless the parties mutually agree to use some other
forum for resolution of such disputes. Each party hereby consents to the
jurisdiction of such arbitration panel and to entry and enforcement of the final
award thereof in any court of competent jurisdiction.
11. Representations and Warranties.
A. JAZZ represents and warrants to JCB that it is authorized to
enter into and perform this Agreement; that its signatory is authorized to
execute and deliver this document on its behalf.
B. JCB represents and warrants to JAZZ that all necessary corporate
action has been taken to authorize JCB to enter into and perform this Agreement;
that Xxxxx is President of JCB and is duly authorized to execute and deliver
this document on behalf of JCB; and that JCB is not aware of anything which
would limit or impair its ability to furnish the services of its employee,
Xxxxx, as contemplated hereby.
C. JCB has advised JAZZ and JAZZ hereby acknowledges such advice
that Xxxxx, JCB's President and principal shareholder, is the subject of an
order
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of Permanent Injunction issued by the Federal District Court of the District of
Columbia in 1994 which prohibits Xxxxx, among other things, from serving as an
officer or director of a public company, including JAZZ, if it becomes a public
company, and JAZZ acknowledges that it has been furnished with a copy of such
order.
12. Xxxxx'x Compensation: Withholding: JCB shall be fully responsible for
all payments due to Xxxxx in connection with services rendered by Xxxxx pursuant
to this Agreement. JCB shall also be responsible for the payment of any
withholding taxes, FICA, unemployment insurance or any other such amounts with
respect to Xxxxx. Xxxxx and JCB agree to indemnify and hold JAZZ harmless from
any claims, amounts due, penalties and/or interest related to their failure to
make such payments. JAZZ acknowledges that JCB and Xxxxx have the right to enter
into other consulting agreements and to perform consulting or other business
services for third parties or for themselves during the term of this Agreement,
except as otherwise provided herein.
13. Miscellaneous.
A. This Agreement may be executed in more than one counterpart, all
of which shall be deemed to be one and the same Agreement.
B. This Agreement constitutes the entire agreement of the parties
hereto on the subject matter hereof, and may not be modified except by a writing
signed by both parties.
C. Any notice permitted or required hereunder shall be made to the
address of such party as set forth at the beginning of this Agreement, or such
other address as such party shall notify the other party in writing.
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IN WITNESS WHEREOF, the parties have signed this Agreement as of the
2nd day of April 1997.
JAZZ PHOTO CORP.
By /s/ Xxxxx X. Xxxxxxxxx
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JCB CONSULTANTS, INC.
By /s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx, President
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