CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT, made as of October __, 1996 by and between R.T.
INDUSTRIES, INC., a Delaware corporation, with offices located at ▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Company") and ▇▇▇▇ ▇▇▇▇▇, an
individual residing at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("Consultant").
WHEREAS, Consultant possesses knowledge of the industry in which the
Company operates and routinely provides his services to businesses in the
industry; and
WHEREAS, the Company wishes to have Consultant provide such assistance in
connection with the analysis and identification of possible acquisition targets
in the industry.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and conditions herein contained, the parties hereto, intending to be
legally bound, hereby agree that the Company has retained Consultant as a
consultant upon the terms and conditions set forth below.
1. Duties of Consultant.
(a) Consultant shall provide the Company with financial advisory
services pertaining to the identification and analysis of other persons,
corporations and business entities as possible acquisition targets for the
Company, including without limitation: i) familiarizing himself to the
extent appropriate with the business operations, properties, financial and
other condition and prospects of the Company and any prospective target
entity; ii) developing lists and reports of potential acquisition targets
for the Company; iii) advising and assisting management of the Company in
presentations to the Board of Directors of the Company concerning general
acquisition strategy, potential targets and proposed transactions; iv)
advising and assisting the Company in developing general negotiating
strategies for accomplishing various transactions, including cooperating
with any third party advisor to the company with respect to pricing issues
and rendering of a fairness opinion and other terms and conditions to be
incorporated by the Company in its negotiations strategy; and v) rendering
such other financial advisory services as may from time to time be agreed
upon by Consultant and the Company.
(b) The services described herein shall be rendered by Consultant
without any direct supervision by the Company and at such time and place
and in such manner (whether by conference, telephone, letter, or otherwise)
as Consultant may determine.
2. Compensation.
(a) As full compensation for Consultant's services hereunder, the
Company hereby irrevocably grants to Consultant, and Consultant accepts, an
aggregate amount of thirty-five thousand (35,000) shares of the capital
stock of the Company (the "Shares"), which Shares the Company agrees are
for services having been performed by the Consultant and earned as of the
date hereof.
(b) the Company agrees to deliver a certificate representing the
Shares and cause such Shares to be registered with the Securities and
Exchange Commission, by filing a registration statement pursuant to Form
S-8, as soon as practicable.
3. Representations and Warranties of Consultant. Consultant represents,
warrants and covenants to the Company as follows:
(a) That none of the Shares which may be issued to him pursuant to
this Agreement will be registered under the Securities Act of 1933, as
amended (the "Act") and that the Shares acquired by Consultant pursuant to
this Agreement are being and will be acquired for Consultant's own account
for investment and not with a view to the sale or distribution thereof; and
that no representation or warranty of any nature respecting the Acquisition
has been made to Consultant upon which Consultant relied in connection with
such Acquisition or which has induced Consultant in any manner in respect
thereof.
(b) That Consultant shall not sell, transfer, hypothecate or otherwise
dispose of such Shares in any manner whatsoever which will violate the Act
or the rules and regulations of the Securities and Exchange Commission;
that all Shares shall bear a restrictive legend setting forth the matters
contained in this paragraph, and that "stop transfer" instructions may be
given to the Company's transfer agent in respect of all Shares, and that if
so requested by the Company at the time of issuance of any Shares,
Consultant will execute such documents as the Company may reasonably
require in respect of the warranties, representations and covenants made by
Consultant in this paragraph.
(c) That all Shares must be held indefinitely unless such Shares are
subsequently registered under the Act or an exemption from such
registration becomes available; any casual sale of such Shares made in
reliance upon Rule 144 of the Act (the "Rule") can only be made in limited
amounts in accordance with the terms and conditions of the Rule; and (iii)
in the case of stock to which the Rule is not applicable, compliance with
Securities Act Regulation A or some other disclosure exemption will be
required.
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4. Representations, Warranties and Additional Covenants of the Company. The
Company represents, warrants and covenants that:
(a) The Company will cooperate with the Consultant by making available
such information as may be appropriate in making a reasonable investigation
of the Company and its affairs. The Company shall provide, at its expense,
credit or similar reports on such persons as we shall reasonably request,
as well as information on the Company which might be shown to candidates in
advance of transactional closure.
(b) The Company has the authority to enter into and to perform this
Agreement.
5. Term/Termination. Nothing contained herein shall be construed to alter
the fact that Consultant is retained on an "at will" basis, meaning that
Consultant may be terminated by the Company at any time for any reason or for no
reason at all.
6. Relationship. In providing services hereunder, Consultant is acting as
an independent contractor and not as an agent, employee, or other affiliate of
the Company and nothing herein shall be construed as giving rise to a
relationship other than as an independent contractor, nor shall Consultant
represent himself to be acting on behalf of the Company.
7. Employees of Consultant. Any employee, agent and independent contractors
employed or retained from time to time, by the Consultant to perform services of
the Consultant pursuant to this Agreement is entirely within the discretion of
the Consultant and the Consultant need not advice the Company of such
individuals. The consultant acknowledges and covenants that the Consultant shall
be deemed the employer of any such employee, agent or independent contractor. As
such, the Consultant shall be responsible to secure and pay any salaries, fees
or benefits (including, but not limited to, health insurance, vacation or
holiday pay, sick leave or disability insurance coverage of whatever nature)
provided to such individuals or entities as well as be responsible for all
necessary insurance and payroll deductions for such persons, including, but not
limited to, Federal, state, and local income taxes, Social Security taxes,
Unemployment Compensation taxes, Workers' Compensation coverage, etc. with
respect to such individuals or entities.
8. Indemnification.
(a) Consultant agrees to defend, indemnify, and hold the Company and
its officers and directors ("Indemnitees") harmless from and against any
claim, suit, or action and to indemnify and hold harmless the Indemnitees
from, and pay on behalf of
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each of the Indemnitees, any judgment, damages, or other liability
(including reasonable legal fees and other expenses in connection with
investigating or defending any such loss, claim, suit, action, or
liability) imposed upon or incurred by any of them where any of the
foregoing arise, directly or indirectly, from or in connection with
Consultant performing its services under this Agreement; provided, however,
that Consultant shall not be required to indemnify any such person or
entity to the extent that any such claim, suit, action, damages, or
liability arises out of either (i) the bad faith or gross negligence of the
person seeking indemnification or (ii) the breach of the Company's
representations and warranties hereunder.
(b) In the event that the Consultant is named in an action against the
Company arising from (i) actions of the Company's directors, officers or
management which actions are in violation of any federal, state, or local
laws or (ii) breach by the Company or its directors, officers or management
of any representations or warranties hereunder, the Company agrees to
defend, indemnify, and hold the Consultant harmless from and against any
such action and to pay on behalf of the Consultant any judgment, damages,
or other liability (including reasonable legal fees and other expenses in
connection with investigating or defending any such loss, claim, suit,
action, or liability) imposed upon or incurred by the Consultant as a
result of any such action; provided, however, that the Company shall not be
required to indemnify the Consultant to the extent that any such claim,
suit, action, damages, or liability arises out of either (x) the bad faith
or gross negligence of the Consultant or (y) the breach of the Consultant's
representations and warranties hereunder.
(c) Anything in this Agreement to the contrary notwithstanding, the
aggregate liability of either party under this Section 8 shall in no event
exceed, in the aggregate, the amount of compensation received by the
Consultant under Section 2 hereof.
(d) Notwithstanding any termination of this Agreement, the terms of
Sections 8, 9 and 10 hereof shall survive termination and remain in full
force and effect.
9. Notice and Defense.
(a) Each party entitled to indemnification pursuant to Section 8
hereof (each, an "Indemnified Party") shall give notice to each party to
provide indemnification (each, an "Indemnifying Party") promptly after such
Indemnified Party has knowledge of any claim for Loss as to which indemnity
may be sought, and, in the event of any claim or demand asserted against an
Indemnified Party by a third party, shall permit the Indemnifying Party to
assume the defense of any such claim (and litigation resulting therefrom).
The Indemnifying Party shall have ten (10) business days after the
aforesaid notice is given (i) to dispute its liability for the Loss being
claimed by the Indemnified Party and (ii) to elect, by written notice given
to the Indemnified Party, to undertake, conduct and control, through
counsel of its own choosing (subject to the consent of the Indemnified
Party, which consent is not to be unreasonably withheld or delayed) and at
its sole risk and expense, the good faith settlement or defense of such
claim, and the
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Indemnified Party shall cooperate with the Indemnifying Party in connection
therewith; provided that: (i) all settlements shall be made only upon the
prior reasonable consultation with the Indemnified Party and the prior
written consent of the Indemnified Party, which consent shall not be
unreasonably withheld or delayed and (ii) the Indemnified Party shall be
entitled to participate in such settlement or defense through counsel
chosen by the Indemnified Party (provided that the fees and expenses of
such counsel shall be borne by the Indemnified Party). The Indemnified
Party shall furnish such information regarding himself or the claim in
question as the Indemnifying Party may reasonably request in writing and as
shall be reasonably required in connection with defense of such claim and
litigation resulting therefrom.
(b) So long as the Indemnifying Party is contesting any such claim in
good faith, the Indemnified Party shall not pay or settle any such claim;
provided, however, that notwithstanding the foregoing, the Indemnified
Party shall have the right to pay or settle any such claim at any time,
provided that in such event they shall waive any right of indemnification
therefor by the Indemnifying Party.
(c) If the Indemnifying Party fails timely to elect to undertake the
good faith defense or settlement of the claim as aforesaid, or if the
Indemnifying Party fails to proceed with the good faith defense or
settlement of the matter after making such election, then, in either such
event, the Indemnified Party shall have the right to contest, settle or
compromise (provided that all settlements or compromises require the prior
reasonable consultation with the Indemnifying Party and the prior written
consent of the Indemnifying Party, which consent shall not be unreasonably
withheld or delayed) the claim at their exclusive discretion, at the risk
and expense of the Indemnifying Party. With respect to any dispute as to
the Indemnifying Party's liability for the Loss, the Indemnified Party may
proceed against such Indemnifying Party simultaneously with the third party
claim or demand and need not await the outcome of such third party claim or
demand before initiating any such proceeding.
10. Reimbursement and Subrogation.
(a) Subject to the provisions of Section 8, 9 and 10 hereof, upon a
determination of the amount of any Loss for which indemnification is sought
thereunder, either by payment for the Loss claimed or by entry of a final
judgment, order or decree (after exhaustion or expiration of appeal rights)
by a court of competent jurisdiction, and of the Indemnifying Party's
liability for such Loss under this Agreement, then the Indemnifying Party
shall forthwith, upon written notice from the Indemnified Party, reimburse
such Indemnified Party for the amount of such Loss. To the extent that any
Loss is paid hereunder, the Indemnified Party shall do all things
reasonably requested by the Indemnifying Party to subrogate to the
Indemnifying Party any rights of recovery (including rights to insurance or
indemnification from persons other than the Indemnifying Party) which the
Indemnified Party may have with respect to the Loss.
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(b) If such amount is not paid forthwith, then the Indemnified Party
may, at its option, take legal action against the Indemnifying Party for
reimbursement in the amount of its Loss together with any costs (including
reasonable attorney's fees) to bring such legal action.
11. Confidentiality.
(a) In view of the fact that Consultant's work as a consultant to the
Company will bring it into close contact with many confidential affairs of
the Company, including matters of a business and financial nature such as
information about costs, profits, markets, sales, and any other information
not readily available to the public, and plans for future developments,
Consultant agrees on its own part and with respect to each and every
employee, agent, and independent contractors of Consultant who will, from
time to time, be designated by Consultant to perform services pursuant to
this Agreement:
i) To keep secret all confidential matters of the Company, and
not to disclose them to anyone outside Consultant (including such of
its officers, directors, and employees who have a need to know such
information to carry out the services contemplated herein), either
during or after this engagement with the Company, except with the
Company's written consent; and
ii) To deliver promptly to the Company on termination of this
Agreement, or at any time the Company may so request, all memoranda,
notes, records, reports, and other documents (and all copies thereof)
relating to the Company's business, which it may then possess or have
under its control.
(b) Consultant's obligations regarding the Confidential Information
will not apply to information (i) already known by Consultant prior to
disclosure of such information by the Company; (ii) already publicly known
at the time of its disclosure hereunder, or which becomes hereafter
publicly known otherwise than through an act of Consultant; (iii) already
known to Consultant at said time as a result of its own prior knowledge or
activities; (iv) rightly obtained at any time by Consultant from other
sources without restrictions in respect to disclosure or use; or (v)
subpoenaed by law enforcement officials with respect to any criminal
investigation or pursuant to any legal proceeding.
12. Governing Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of New York and the parties agree to
submit themselves to the jurisdiction of the Courts in the State of New York,
County of New York, which shall be the sole tribunals in which the parties can
initiate and maintain legal proceedings against the other arising from any
dispute hereunder.
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13. Notices. Any notice or other communication required or permitted to be
given hereunder shall be in writing and shall be deemed duly given to a party
hereto when delivered in person or on the third business day after being mailed
by registered or certified mail, return receipt requested, postage prepaid or on
the date delivered if transmitted by courier service providing confirmation of
delivery at the respective addresses first above written (or to such other
address as a party shall have furnished in writing in accordance with the
foregoing provisions). Notice may be sent to the parties hereto by telefax, with
confirmatory hard copy to be sent by first class mail, with such notice deemed
to be given at the date and time of transmission of such telefax.
14. Assignment and Termination. This Agreement shall not be assignable by
any party for any reason whatsoever without the prior written consent of the
other party.
15. Amendment; Waiver. This Agreement may not be amended except by written
agreement signed by the parties hereto. No waiver by any party of any provision
or condition of this Agreement shall be deemed a waiver by such party of similar
or dissimilar provisions and conditions at the same time or any prior or
subsequent time.
16. Entire Agreement. This Agreement sets forth the entire agreement and
understanding of the parties relating to the subject matter hereof, and
supersedes all prior agreements arrangements and understandings, written or
oral, relating to the subject matter hereof. No representation, promise or
inducement has been made by either party that is not embodied in this Agreement,
and neither party shall be bound by or liable for any alleged representation,
promise or inducement not so set forth.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
R.T. INDUSTRIES
By:
▇▇▇▇ ▇▇▇▇▇▇, President
▇▇▇▇ ▇▇▇▇▇
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