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EXHIBIT 10.7
CONSULTING AGREEMENT
AGREEMENT, dated November 1, 1996, by and between MIKE'S ORIGINAL, INC., a
Delaware corporation (the "Company") and XXXX MANAGEMENT CORP., a domestic
corporation (the "Consultant").
W I T N E S S E T H:
WHEREAS, the Company desires to retain the Consultant because of the
extensive knowledge, experience and abilities with respect to the business being
conducted by the Company and possessed by the principals of the Consultant,
including Xxxx Xxxxxxx (the "Principals"), and the Company considers that the
advice of the Consultant and its Principals will be important to the continued
success of the Company, and the Consultant is willing to accept a retainer with
the Company as a consultant and to provide to the Company the services of the
Principals, upon the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and mutual covenants and
agreements herein contained, the Company and the Consultant hereby agree as
follows:
Section 1. Consulting Period.
(a) The Company hereby engages the Consultant to furnish the advisory and
consulting services specified herein, and the Consultant hereby accepts such
engagement and agrees to provide such services, on the terms and conditions
herein set forth, for a one (1) year period commencing on November 1, 1996 (the
"Closing Date") and ending on October 31, 1997 (the "Consulting Period").
(b) Notwithstanding the foregoing, the Consulting Period may be terminated
by the Company:
(i) Upon the date of death of both Principals;
(ii) Upon the Company's sending to the Consultant or to the Principals
written notice terminating the same for Just Cause. For purposes of this
Agreement, "Just Cause" shall include, but not be limited to, (A) action by the
Consultant or the Principals involving dishonesty or fraud detrimental to the
Company; (B) either Principal's conviction of a felony; (C) either Principal's
substance abuse, including without limitation, alcoholism or drug addiction, as
determined by the judgment of a physician selected in good faith by the Board of
Directors of the Company; (D) any violation in a material respect of any of the
provisions of Sections 4 or 5 hereof; or (E) any material failure by the
Consultant or the Principals to perform their duties in accordance with this
Agreement (other than by reason of physical or mental disability of the
Principals), provided the Consultant shall first have been given written notice
of such failure and the Consultant and the Principals shall not have corrected
or caused to be corrected such failure within 30 days from such notice.
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(c) In the event the Company terminates one of the Principals, the
Consulting Fee shall be reduced by one half. In the event the Company terminates
either the Consultant or both Principals, no further compensation will be
payable hereunder.
Section 2. Consulting Services.
(a) During the Consulting Period, the Consultant shall and shall cause the
Principals to furnish the Company with advisory and consulting services to be
reasonably determined by the Company respecting sales, marketing and
distribution matters and operations of the Company and/or any current or future
parent of the Company ("parent") or of any current or future subsidiary of
("subsidiary"), or corporation affiliated with ("affiliate"), the Company as
well as such other advisory and consulting services within the areas of the
Consultant's expertise as may be reasonably determined from time to time by the
Company. Consultant shall cause the principals to develop and inform the Company
of any and all potential business opportunities that the Consultant may devise
as well as assisting the Company in the implementation of these opportunities.
The Company may select which of the Principals shall provide specified services
to the Company. For the purpose of this Agreement, the term "Company" shall
include also any corporation which is a successor in interest to the Company,
whether by reason of merger, consolidation, and/or purchase or acquisition of
substantially all of the Company's assets or otherwise.
(b) During the Consulting Period, the Consultant shall cause the Principals
to be available to furnish advisory and consulting services hereunder, at the
request of the Company, during normal business hours on a part-time basis, not
to exceed 20 hours per week but no less than 15 hours unless agreed to in
writing. In performing such duties, the Consultant agrees that if necessary,
upon request of the Company, that the Principals shall be available to furnish
consulting and advisory services to the Company by telephone at mutually
agreeable times.
Section 3. Compensation and Expenses.
(a) Subject to the provisions of this Agreement, as compensation for its
services and covenants hereunder, the Company shall pay to the Consultant during
the Consulting Period, a fee at the rate of $50,000 per annum, payable in equal
bi-weekly installments of $1,923.00 each (the foregoing fee being herein
referred to as the "Consulting Fee").
(b) As further compensation, Consultant shall receive five year options to
purchase 200,000 shares of the Company's Common Stock at $1.00 per share vesting
over an eighteen month period commencing on the date hereof. One-third shall
vest within six months of the date hereof, two-thirds within twelve months, and
the remaining one-third in eighteen months.
(c) The Company will reimburse the Consultant and the Principals for all
reasonable, actual out-of-pocket expenses previously approved in writing
incurred by it or them in the performance of duties hereunder at the request of
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the Company, either upon presentation of properly itemized charges, receipts and
similar documentation or otherwise in accordance with policies or practices
established from time to time by the Board of Directors of the Company.
(d) Notwithstanding anything contained herein to the contrary, the
Consultant shall be an independent contractor and shall not be considered an
employee of the Company for any purpose whatsoever, including, but not limited
to, medical, health or accident insurance or plans, retirement or pension plans
or benefits; incentive, bonus or similar plans; sick, disability or vacation pay
or allowances; withholding, social security or other employer contributions; and
the use of credit cards.
Section 4. Assignment.
This Consulting Agreement shall not be assigned by either party hereto
except that the Company may assign its rights hereunder to any parent,
subsidiary or affiliate or to any successor in interest of the Company whether
by merger, consolidation, purchase or acquisition of substantially all of the
Company's assets or otherwise.
Section 5. Notices.
All notices, requests, demands and other communications hereunder must be
in writing and shall be deemed to have been duly given if mailed, by prepaid,
first-class, registered or certified mail, return receipt requested, delivered
by a nationally recognized overnight courier service or sent by facsimile
transmission electronically confirmed during normal business hours, and
addressed as follows:
(a) If to the Company:
Mike's Original, Inc.
000 Xxxxxxx Xxxxxxxx
Xxxxxxx, Xxx Xxxx 00000
Fax No: (000) 000-0000
with copy to:
Blau, Kramer, Wactlar & Xxxxxxxxx, P.C.
000 Xxxxxxx Xxxxxxxxxx
Xxxxxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxxxxxx, Esq.
Fax No.: (000) 000-0000
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(b) If to the Consultant:
Xxxx Management Co.
c/o Xxxx Xxxxxxx
00 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax No:
with copy to:
Xxxxxxx, Turkish & Xxxxxxx
00 Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax No: 000-000-0000
Section 6. Miscellaneous.
This Agreement represents the entire understanding of the parties hereto
relating to the retention of the Consultant as a consultant to the Company, and
the terms and provisions of this Agreement may not be modified or amended,
except in writing. Any failure or delay on the part of either party in
exercising any power or right hereunder shall not operate as a waiver thereof,
nor shall any single or partial exercise of any such right or power preclude any
other or further exercise thereof or the exercise of any other right or power
hereunder. The headings in this Agreement are for convenience of reference only
and shall not be considered as part of this Agreement nor limit or otherwise
affect the meaning thereof. This Agreement shall be construed and enforced in
accordance with, and governed by, the laws of the State of New York, without
regard to its conflicts of laws or rules. Any disputes or litigation arising out
of this Agreement shall be litigated in the Supreme Court of the State of New
York, Nassau County and it shall be the understanding of the parties that by
entering this agreement, they consent to the jurisdiction of the Supreme Court
of the State of New York, Nassau County.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Consulting
Agreement on the day and year first above written.
MIKE'S ORIGINAL, INC.
By: /s/ Xxxxxxx Xxxxx
_______________________________
Xxxxxxx Xxxxx
Chairman, President and Chief
Executive Officer
Consented and Agreed to:
the Principal
XXXX MANAGEMENT CORP.
/s/ Xxxx Xxxxxxx
________________________
By: /s/ Xxxx Xxxxxxx
________________________________
Name: Xxxx Xxxxxxx
Title:
