EXHIBIT 4.1
CONSULTING AGREEMENT
AGREEMENT dated as of September 24, 1997 by and between XXXXXXX
COMPANIES, INC., a Delaware corporation having an office at 0000 Xxxxxxx Xxxxx,
Xxxxxxxx, Xxxx 00000 (the "Company"), and XXXXX XXXXXXX (the "Consultant"),
having an office at 0 Xxxxxxx Xxxxx, Xxxx Xxxxx, Xxx Xxxx 00000.
W I T N E S S E T H:
WHEREAS, the Company wishes to retain Consultant to provide the
Company with certain consulting services and Consultant is willing to provide
such consulting services, on the terms and conditions set forth herein,
NOW, THEREFORE, in consideration of the foregoing premises and of
the mutual covenants and agreements hereinafter contained, the parties hereby
agree as follows:
SECTION 1. Retention; Duties. On the terms and subject to the conditions herein
contained, the Company hereby engages Consultant as a consultant, and Consultant
hereby accepts such engagement. Consultant's duties shall be to consult with the
Board of Directors and management of the Company, from time to time, as
requested by the Company with regard to operations, strategic planning and
business development, including, but not limited to:
(a) targeting of acquisitions for the Company;
(b) evaluation and analysis of prospective acquisitions for the
Company;
(c) preparation and review of a long-range business plan for the
Company, including the preparation of budgets and projections;
(d) a detailed evaluation of the Company's competition in new and
existing markets;
(e) analysis of information on a periodic basis (at least
quarterly) concerning the financial performance of the Company and the markets
in which it operates;
(f) assistance with negotiations with the Company's institutional
lenders;
(g) evaluation of the Company's compensation arrangements with its
officers and employees;
(h) review of the Company's store design and store locations;
(i) assist the Company in negotiating with landlords and obtaining
additional store locations, including the preparation of a market analysis for
each new location; and
(j) such other aspects of the business of the Company as Consultant
and the Company may agree from time to time.
Consultant agrees to use his best efforts to perform all services
required hereunder in a competent and timely manner.
SECTION 2. Term of the Agreement.
(a) The term of this Agreement shall commence as of the date first set
forth above, and, unless earlier terminated pursuant hereto, shall continue for
a period of two (2) years.
(b) In the case of any material breach by Consultant of his obligations
under this Agreement, the Company may terminate this agreement upon thirty (30)
days written notice, such notice to describe the breach in detail, unless
Consultant has cured the breach within such thirty
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(30) day period, or in the event that the breach cannot be cured within such
period, Consultant has commenced with due diligence to cure such breach.
(c) The termination of this Agreement by either party hereto shall not
affect, restrict, diminish or remove any rights, obligations or remedies held or
arising by either party under the terms of this Agreement up to and through the
effective date of termination hereof.
SECTION 3. Consultant's Compensation.
The Company shall issue to Consultant 300,000 shares of the Company's
common stock, $.01 par value (the "Common Stock").
SECTION 4. Other Benefits and Expenses
The Company shall pay or reimburse Consultant for all reasonable and
necessary expenses incurred by him in connection with his duties hereunder, upon
submission by Consultant to the Company of such written evidence of such expense
as the Company may require. The Consultant shall obtain the prior written
approval of the Company for any expense in excess of $200.
SECTION 5. Confidentiality. Consultant understands that, in performing his
responsibilities hereunder, he will have access to Confidential Information (as
hereinafter defined) of the Company. Consultant shall hold in strict confidence
unless compelled to disclose by judicial or administrative process, or, in the
opinion of counsel, by other requirements of law, Confidential Information (as
hereinafter defined) and shall not release or disclose such information to any
other person, except his employees, auditors, attorneys, representatives and
other advisors and
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agents in connection with this Agreement and the services to be provided
hereunder, provided that any such person shall have first been advised of and
agreed to the confidentiality provisions of this Section 5. For purposes hereof,
"Confidential Information" shall mean all information of any kind which the
Company deems to be confidential, except information (1) disclosed in any filing
by the Company pursuant to the Securities Exchange Act of 1934, (2) available to
the public other than as a result of a disclosure by Consultant in violation of
the terms hereof, (3) available to Consultant on a non-confidential basis prior
to disclosure to Consultant by the Company, or (4) available to Consultant on a
non-confidential basis from a source other than the Company, provided that such
source is not known by Consultant to be bound by a confidentiality agreement
with the Company or otherwise is known by Consultant to be prohibited by a
contractual, legal or fiduciary obligation from transmitting the information to
Consultant.
SECTION 6. No Solicitation. Consultant agrees that during the term of this
Agreement and for a period of one (1) year following the expiration of this
Agreement, he will not solicit the employment of any employee of the Company on
behalf of any other person, firm, corporation or other entity or otherwise
interfere with the employment relationship between any employee or officer of
the Company and the Company.
SECTION 7. Limitation of Liability; Indemnification.
(a) Consultant shall have no liability to the Company, its shareholders
or to any third party for any losses, liabilities, obligations, fines,
injunctions or other costs or expenses of any kind directly or indirectly
sustained, or incurred or arising as a result of the services that are the
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subject of this Agreement (or any action or inaction of any third party retained
by or acting on behalf of Consultant hereunder) or for any other cause or
reason, except as may result from Consultant's gross negligence or wilful
misconduct in the performance of his duties hereunder.
(b) The Company agrees to indemnify and hold Consultant harmless from
and against any losses, claims, damages or liabilities, joint or several, to
which Consultant may become subject in connection with the services which are
the subject of this Agreement, and to reimburse Consultant for any out-of-pocket
expenses including reasonable fees and expenses of counsel (including the cost
of any investigation and preparation) incurred by Consultant in connection
therewith, whether or not resulting in any liability; provided, however, that
the Company shall not be liable under the foregoing indemnity to the extent that
a court having jurisdiction shall have determined by a final judgment that such
loss, claim, damage or liability resulted from the willful misconduct or gross
negligence of Consultant. This indemnification shall remain in full force and
effect following the completion or termination of this Agreement.
(c) Consultant agrees to indemnify and hold the Company harmless from
and against any losses, claims, damages or liabilities, joint or several, to
which the Company may become subject in connection with the services which are
the subject of this Agreement, and to reimburse the Company for any
out-of-pocket expenses including reasonable fees and expenses of counsel
(including the cost of any investigation and preparation) incurred by the
Company in connection therewith, whether or not resulting in any liability;
provided, however, that Consultant shall not be liable under the foregoing
indemnity except to the extent that a court having jurisdiction shall have
determined by a final judgment that such loss, claim, damage or liability
resulted from the willful misconduct or gross negligence of Consultant. The
indemnity agreement in this paragraph
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shall, upon the same terms and conditions, extend to and inure to the benefit of
each person, if any, who may be deemed to control the Company and to the
respective officers, directors, employees and advisors of the Company and such
control persons. This indemnification shall remain in full force and effect
following the completion or termination of this agreement.
(d) If any lawsuit or enforcement action is filed against any party
entitled to the benefit of indemnity under this Section 7 by any third party,
written notice thereof shall be given to the indemnifying party as promptly as
practicable; provided that the failure of any indemnified party to give timely
notice shall not affect rights to indemnification hereunder except to the extent
that the indemnifying party demonstrates that such failure was prejudicial to
the ability of the indemnifying party to defend such lawsuit or action and
resulted in increased cost to the indemnifying party pursuant to this Section 7.
After such notice, if the indemnifying party shall acknowledge in writing to
such indemnified party that such indemnifying party shall be obligated under the
terms of its indemnity hereunder in connection with such lawsuit or action, then
the indemnifying party shall be entitled, if it so elects, to take control of
the defense and investigation of such lawsuit or action and to employ and engage
attorneys of its own choice to handle and defend the same, at the indemnifying
party's cost, risk and expense; and such indemnified party shall cooperate in
all reasonable respects, at the indemnifying party's cost, risk and expense,
with the indemnifying party and such attorneys in the investigation, trial and
defense of such lawsuit or action and any appeal arising therefrom; provided,
however, that the indemnified party may, at its own cost, participate in such
investigation, trial and defense of such lawsuit or action and any appeal
arising therefrom. However, if the defendants in any action involve both the
indemnifying party and the indemnified party, and the indemnified party
concludes that
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representation of both the indemnifying party and the indemnified party by the
same counsel is inappropriate under applicable standards of professional conduct
due to actual or potential differing interests between them or for some other
reason, then the indemnifying party shall have the right, at the expense of the
indemnifying party, to select separate counsel to assume such legal defenses and
to otherwise participate in the defense of such action on behalf of the
indemnified party.
(e) In the case of any legal action directly between the Company and
Consultant with regard to any matter covered by the provisions of this Section
7, the non-prevailing party shall pay all reasonable attorney's fees and
expenses of the prevailing party incurred solely as a result of such action.
SECTION 8. Authorization. Each party hereto has taken all necessary action to
duly authorize the execution, delivery and performance of this Agreement.
SECTION 9. Modification. Except as otherwise provided herein, this Agreement may
not be modified, changed, discharged, waived or terminated except by an
instrument in writing signed by the party against whom the enforcement of any
such modification, change, discharge, waiver or termination is sought.
SECTION 10. Entire Agreement. This Agreement constitutes the entire Agreement
between the parties with respect to the subject matter hereof and supersedes all
prior and contemporaneous arrangements or understandings with respect thereto.
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SECTION 11. Consultant's Acknowledgement. The Consultant acknowledges that the
Consultant has received and has carefully reviewed a copy of the Company's Form
10-KSB for the year ended December 31, 1996 and all of the Company's filings
under the Securities Exchange Act of 1934 since December 31, 1996.
SECTION 12. Notices. All notices and other communications hereunder to any party
shall be in a written instrument delivered by hand or duly sent by first class,
registered or certified mail, return receipt requested and postage prepaid,
addressed to such party at the address set forth on the first page of this
Agreement or such other address as may hereafter by designated in writing by the
addressee. All such notices and communications shall be deemed to have been
received (a) in the case of personal delivery, on the date of such delivery, and
(b) in the case of mailing, on the fifth day following the date of such mailing.
SECTION 13. Survival. The indemnification granted under Section 7 above shall
survive the termination or cancellation of this Agreement and shall be binding
upon and inure to the benefit of the parties hereto, their successors and
assigns.
SECTION 14. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors,
permitted assigns and representatives. This Agreement shall not be assignable in
whole or in part, in any of its terms, obligations, responsibilities or
provisions by any party hereto without the express written consent of the other
party; provided, however, that this provision shall in no way limit the right of
Consultant to
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enlist, hire or retain counsel, consultants, advisors, experts or other third
parties to assist him in carrying out and administering his duties and
responsibilities hereunder.
SECTION 15. Relationship. The sole relationships existing between the Company
and Consultant shall be that as specifically provided under the terms of this
Agreement. This Agreement shall not be construed as creating any partnership,
joint venture or any other form of joint operation or organization wherein the
parties hereto are deemed to be partners.
SECTION 16. Cooperation. The parties hereto agree to execute and deliver from
time to time such additional documents, instruments, agreements, and other
evidences of authority as may be necessary or prudent to carry out the intent of
this Agreement and the transactions contemplated hereby.
SECTION 17. Counterparts. This Agreement may be executed in any number of
counterparts and each such counterpart hereof shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
agreement.
SECTION 18. Severability. The invalidity or unenforceability of any provision
hereof shall in no way effect the validity or enforceability of any other
provision. The parties to this Agreement agree and intend that this Agreement
shall be enforced as fully as it may be enforced consistent with applicable
statutes and rules of law.
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SECTION 19. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Ohio, without giving effect to
principles of conflicts of law.
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the date first set forth above.
XXXXXXX COMPANIES, INC.
By: /s/ Xxxx Xxxxxxx
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Name: Xxxx Xxxxxxx
Title: Chief Executive Officer
/s/ Xxxxx Xxxxxxx
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XXXXX XXXXXXX
