CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (the "Agreement") is made and entered into as
of the 12th day of March, 1998, by and between Xxxxx Xxxxxxx ("Consultant") and
The Million Dollar Saloon, Inc., a Nevada corporation (the "Company").
W I T N E S S E T H:
WHEREAS, the Company and Consultant desire to enter into this agreement
whereby Consultant will provide to the Company certain consulting services in
the operation of its business; and
WHEREAS, Consultant is willing to enter into such arrangements in
accordance with the terms and conditions of this Agreement;
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
hereby agree as follows:
ARTICLE I.
DEFINITIONS
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For purposes of this Agreement, each of the following terms shall have
the meaning ascribed thereto unless otherwise specified or clearly required by
the context in which such term is used.
1.1 "Affiliates" means, with respect to a party hereto, entities that
directly or indirectly through one or more intermediaries control, or are
controlled by, or are under common control with, such party, and the term
"control" shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of an entity,
whether through the ownership of voting securities, by contract or otherwise;
provided, however, such term, with respect to each party, shall not mean the
other party or Parties.
1.2 "Commencement Date" means the date of this Agreement.
ARTICLE II.
TERM AND TERMINATION OF THE AGREEMENT
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2.1 Term. The term of this Agreement shall begin on the Commencement
Date and shall continue for a period of one (1) year from such date, unless
earlier terminated by either party upon at least ten (10) days prior written
notice to the other party (the "Term"). Upon termination, neither party will
have any further obligation or liability to the other party, except for the
obligation under Section 3(a) hereof.
CONSULTING AGREEMENT - Page 1
ARTICLE III.
CONSULTING SERVICES PROVIDED TO THE COMPANY
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3.1 Consulting Duties. Consultant is hereby retained to serve as a
consultant to the Company, to perform such consulting, advisory and management
services on behalf of the Company as the Board of Directors of the Company may
from time to time request in writing. Consultant shall also assist the Company
with locating and evaluating possible acquisitions by the Company. Consultant
shall only devote such time to his consulting duties for the Company as may be
requested from time to time in writing by the Board of Directors of the Company.
Consultant shall devote approximately 40% of his consulting time under this
Agreement in assisting the Company with its capital raising efforts with the
remaining 60% of his consulting time being devoted to seeking and evaluating
acquisitions for the Company if such services are requested by the Company.
Consultant agrees to devote his attention, skills, benefits and reasonable
efforts to the performance of his duties hereunder and to the promotion of the
business and interest of the Company.
3.2 Independent Contractor Status. Consultant agrees that Consultant is
an independent contractor under this Article III with respect to Consultant
providing consulting services to the Company and shall in no way be considered
to be an agent or employee of the Company and, accordingly, Consultant shall not
be entitled to any benefits, coverages or privileges made available to employees
of the Company, including without limitation, social security, unemployment,
medical or pension payments. Consultant shall only consult and render advice,
and shall not undertake to commit the Company to any course of action in
relation to third persons, except as requested by the Company.
3.3 Compensation and Consulting Services. In consideration for the
services provided to the Company by Consultant under this Article III,
Consultant shall be entitled to receive the following:
(a) Issuance of Company Common Stock. In consideration of the
services to be provided to the Company, the Company shall issue and
deliver to Consultant 150,000 shares of the Common Stock of the Company
upon execution of this Agreement by the parties hereto. Further, as
payment for the assistance to the Company in obtaining financing from
Xxxxx X. Xxxxxx ("Xxxxxx"), the Company shall issue additional shares
of Common Stock of the Company to Consultant as follows:
(i) upon receipt in March 1998 by the Company of the
initial funding to be provided by Xxxxxx , expected to be
approximately $530,000, the Company shall issue and deliver to
Consultant an additional 55,000 shares of Common stock; and
(ii) upon receipt in July 1998 by the Company of the
remaining funding to be provided by Xxxxxx, expected to be
approximately $440,000, the Company shall issue and deliver to
Consultant an additional 45,000 shares of Common Stock.
The obligation of the Company to issue and deliver to Consultant the
additional 100,000 shares of Common Stock of the Company is subject to
the receipt by the Company of the funding from Xxxxxx as noted above.
CONSULTING AGREEMENT - Page 2
(b) Restricted Securities. The shares of Common Stock to be
issued to Consultant hereunder are "restricted securities" and are not
publicly tradeable unless the requirements of SEC Rule 144 are met or
an effective registration statement is on file with the Securities and
Exchange Commission covering such shares. The parties hereto
acknowledge the Company has no obligation to file a registration
statement with the SEC covering the shares to be issued to Consultant
and does not intend to do so. The parties further acknowledge that on
March 12, 1998, the closing bid price of the Company's Common Stock as
quoted on the OTC Electronic Bulletin Board was $0.65 per share. The
parties hereto further acknowledge and agree that since the shares to
be issued and delivered to Consultant are restricted securities, they
have a value of less than the current market price. The parties hereto
agree that the restricted shares of Common Stock to be received by
Consultant hereunder shall have a value of $0.35 per share.
(c) Expenses. Provided Consultant has obtained the prior
written consent of the Board of Directors to incur expenses in
rendering consulting services hereunder, during the term hereof, the
Company shall reimburse Consultant for all reasonable and necessary
out-of-pocket travel and other expenses incurred by Consultant in
rendering consulting services required under the terms of this Article
III, such reimbursement to be on a monthly basis upon submission of a
detailed monthly statement and reasonable documentation.
The compensation set forth in this Section 3.3 will be the sole compensation
payable to Consultant for consulting services and no additional compensation or
fee will be payable by the Company to Consultant by reason of any benefit gained
by the Company directly or indirectly through Consultant's consulting efforts on
the Company's behalf, nor shall the Company be liable in any way for any
additional compensation or fee for consulting services unless the Company shall
have expressly agreed thereto in writing.
IV.
CONFIDENTIALITY
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4.1 Acknowledgment of Proprietary Interest. Consultant recognizes the
proprietary interest of the Company in any Confidential and Proprietary
Information (as hereinafter defined) of the Company. As used in this Section 4,
the "Company" shall include any Affiliates or subsidiaries of the Company.
Consultant acknowledges and agrees that any and all Confidential and Proprietary
Information communicated to, learned of, developed or otherwise acquired by
Consultant during the course of his engagement by the Company after the date
hereof, whether developed by Consultant alone or in conjunction with others or
otherwise, shall be and is the property of the Company. Consultant further
acknowledges and understands that his disclosure of any Confidential and
Proprietary Information of the Company will result in irreparable injury and
damage to the Company. As used herein, "Confidential and Proprietary
Information" means, but is not limited to, information derived from reports,
investigations, experiments, research, work in progress, drawings, designs,
plans, proposals, codes, marketing and sales programs, client lists, client
mailing lists, financial projections, cost summaries, pricing formula, contracts
analyses, financial information, projections, confidential filings with any
national or local agency, and all other concepts, ideas, materials or
information prepared or performed for, by or on behalf of the Company by its
employees, officers, directors, agents, representatives or consultants.
CONSULTING AGREEMENT - Page 3
4.2 Covenant Not-to-Divulge Confidential and Proprietary Information.
Consultant acknowledges and agrees that the Company is entitled to prevent the
disclosure of Confidential and Proprietary Information. As a portion of the
consideration for the retainment of Consultant and for the compensation being
paid to Consultant by the Company, Consultant agrees at all times during the
term of this Agreement and thereafter to hold in strictest confidence and not to
disclose to any person, firm or corporation, other than to persons engaged by
the Company to further the business of the Company, and not to use except in the
pursuit of the business of the Company, Confidential and Proprietary
Information, without the prior written consent of the Company, including
Confidential and Proprietary Information developed by Consultant during the
course of his engagement with the Company; provided, however, that
notwithstanding the foregoing, Consultant shall not be obligated to keep secret
and not to disclose Confidential and Proprietary Information generally known to
the public through no wrongful act of Consultant.
4.3 Return of Materials. In the event of any termination of this
Agreement for any reason whatsoever, or at any time upon the request of the
Company, Consultant will promptly deliver to the Company all documents, data and
other information pertaining to Confidential and Proprietary Information.
Consultant shall not take any documents or other information, or any
reproduction or excerpt thereof, containing or pertaining to any Confidential
and Proprietary Information, unless as otherwise authorized in writing by the
President of the Company.
ARTICLE V.
NONCOMPETITION
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5.1 Agreement Not-To-Compete. Without the prior written consent of the
Company, Consultant shall not, during the Term and for a period of one-year
thereafter, directly or indirectly, invest (other than investments in
publicly-owned companies which constitute not more than 5% of the voting
securities of any such company), engage or participate in any business which
engages in the business which the Company operates as of the date hereof or
which the Company and/or its Affiliates conduct during the Term anywhere in the
Dallas-Fort Worth Metroplex.
ARTICLE VI.
MISCELLANEOUS
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6.1 Relationship of Parties. This Agreement does not create a
partnership, joint venture, or association; nor does this Agreement, or the
operations hereunder, create the relationship of lessor and lessee or xxxxxx and
bailee. Nothing contained in this Agreement or in any agreement made pursuant
hereto shall ever be construed to create a partnership, joint venture, or
association, or the relationship of lessor and lessee or xxxxxx and bailee, or
to impose any duty, obligation, or liability that would arise therefrom with
respect to any of the Parties.
6.2 No Third Party Beneficiaries. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
heirs, legal representatives, successors and assigns of the parties hereto. No
person or entity shall be deemed a third party beneficiary of this Agreement
except to the extent a third party is expressly given rights herein. Consultant
may not assign any of his rights, obligations or duties hereunder without the
prior written consent of the Company.
CONSULTING AGREEMENT - Page 4
6.3 Remedies. Consultant recognizes and acknowledges that in the event
of any default in, or breach of any of, the terms, conditions or provisions of
this Agreement (either actual or threatened) by Consultant, the Company's
remedies at law shall be inadequate. Accordingly, Consultant agrees that in such
event, the Company shall have the right of specific performance and/or
injunctive relief in addition to any and all other remedies and rights at law or
in equity, and such rights and remedies shall be cumulative.
6.4 Notices. Any notices, consents, demands, requests, approvals and
other communications to be given under this Agreement by either party to the
other must be in writing and given by personal delivery, facsimile transmission,
courier service or sent by mail, registered or certified, postage prepaid with
return receipt requested. Such notice shall be deemed received on the date on
which it is personally delivered, transmitted by facsimile or couriered, or on
the third business day following the date on which it so mailed. For purposes of
notices, the addresses of the parties shall be:
If to the Company: Million Dollar Saloon, Inc.
0000 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attention: President
Fax No.: (000) 000-0000
If to Consultant: Xxxxx Xxxxxxx
0000 Xxxx Xxxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Fax No.: (000) 000-0000
Phone No.: (000) 000-0000
Any party may change its address for notice by written notice given to the other
party in accordance with this Section.
6.5 Governing Law. THIS AGREEMENT HAS BEEN EXECUTED AND DELIVERED IN
AND SHALL BE INTERPRETED, CONSTRUED, AND ENFORCED PURSUANT TO AND IN ACCORDANCE
WITH THE LAWS OF THE STATE OF TEXAS.
6.6 Enforcement. In the event any party shall resort to legal action to
enforce the terms and provisions of this Agreement, the prevailing party may
recover from the other party the costs of such action, including, without
limitation, reasonable attorneys' fees.
6.7 Severability. In the event any provision of this Agreement is held
to be unenforceable for any reason, such provision shall be severable from this
Agreement if it is capable of being identified with and apportioned to
reciprocal consideration or to the extent that it is a provision that is not
essential and the absence of which would not have prevented the parties from
entering into this Agreement. The unenforceability of a provision that has been
performed shall not be grounds for invalidation of this Agreement under
circumstances in which the true controversy between the parties does not involve
such provision.
CONSULTING AGREEMENT - Page 5
6.8 Entire Agreement. This Agreement supersedes all previous contracts,
agreements and understandings between the parties concerning the subject matter
hereof, and constitutes the entire agreement between the parties with respect to
the subject matter hereof. No oral statements or prior written material not
specifically incorporated herein shall be of any force and effect, and no
changes in or additions to this Agreement shall be recognized unless
incorporated herein by amendment, such amendment(s) to become effective on the
date(s) stipulated therein.
6.9 Amendments and Waivers. The provisions of this Agreement may not be
amended, modified or supplemented without the prior written consent of all
parties.
6.10 Headings. The headings of the Sections and paragraphs of this
Agreement have been inserted for convenience of reference only and do not
constitute a part of this Agreement.
6.11 Waiver of Breach. The waiver by any party hereto of a breach of
any provision of this Agreement shall not operate or be construed as a wavier of
any subsequent breach by any party.
6.12 Other Obligations. Consultant represents and warrants that she has
not as of the execution of this Agreement assumed any obligations inconsistent
with those contained herein.
6.13 Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be taken to be an original; but such
counterparts will together constitute one document.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
THE MILLION DOLLAR SALOON, INC.
By:
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Name:
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Its:
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XXXXX XXXXXXX
CONSULTING AGREEMENT - Page 6
