CONSULTING AGREEMENT
CONSULTING AGREEMENT (the "Agreement"), dated as of the 3rd
day of June, 1999, by and between The Harmat Organization, Inc. (the "Company")
with an address at ▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
("Schilowitz") residing at ▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
WHEREAS, Schilowitz and the Company have agreed that
Schilowitz shall render services to the Company as a consultant pursuant to the
terms of this Agreement.
NOW THEREFORE, in consideration of the premises and of the
mutual agreements herein set forth, the parties hereto have agreed and do hereby
mutually agree as follows:
1. Term: The term of this Agreement shall commence on the date
hereof and shall expire three years thereafter (the "Employment Period") subject
to the provisions of Section 5. In the event ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇'▇ Employment
Agreement is extended, then this Employment Agreement shall be extended for the
same term.
2. Duties of Executive: Schilowitz shall be required to
perform such duties as may from time to time be required by the Board of
Directors of the Company. Schilowitz shall also serve on the Board of Directors
of the Company, if so elected, at no additional compensation.
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3. Compensation:
(a) As compensation for his services hereunder, the Company
shall pay Schilowitz, during the Employment Period, a base fee ("Base Fee")
payable as follows:
(i) One Hundred Fifty Thousand Dollars ($150,000.00) for the first year;
(ii) One Hundred Seventy Thousand Dollars ($175,000.00) for the second year;
(iii) Two Hundred Thousand Dollars ($200,000.00) for the third year;
(b) The Company may withhold from payments of consultant's fee
required to be withheld by the Company from time to time from such salary under
applicable Federal, State, and local laws and regulations then in effect.
(c) Upon submission of written statements and bills in
accordance with the then regular procedures of the Company, Schilowitz shall be
entitled to reimbursement for reasonable out-of-pocket expenses necessarily
incurred in the performance of his duties hereunder, including, but not limited
to, reimbursement for travel and car expenses. A Company credit card will also
be made available to Schilowitz. In addition, Schilowitz shall also be entitled
to a car allowance of $750 per month, plus cost of insurance and maintenance.
(d) In the event ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ receives a bonus under his
Employment Agreement, then ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ shall hereunder, be entitled to a
bonus equal to sixty (60%) percent of the bonus granted to ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇.
4. Benefits:
(a) Schilowitz shall be included to the extent eligible
thereunder (at the expense of the Company, if appropriate) in any and all
existing plans (and any plans which may be adopted
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in the future) providing benefits for the Company's employees generally,
including, but not limited to, group life and disability insurance,
hospitalization, medical, vacation, retirement, stock option plans and any and
all similar or comparable benefits.
(b) Due to the fact that the Company's success is dependent
upon the activities of Schilowitz, the Company will continue to provide keyman
insurance on the life of ▇▇. ▇▇▇▇▇▇▇▇▇▇ in the amount of $1,000,000.00 and
Schilowitz will cooperate in obtaining and maintaining such policy. This policy
shall be a "whole life" insurance policy (the "Policy"). At the termination of
this Agreement, for any reason, the Company shall, at Schilowitz's sole option,
assign Schilowitz all of its right, title and interest in the Policy. At that
time, Schilowitz may, at his expense, cause the Policy to continue in full force
and effect and shall have the option to designate a beneficiary of his choice.
5. Termination:
(a) The Company may terminate Schilowitz's engagement
hereunder at any time for cause only by written notice but only after a decision
by the Board of Directors of the Company which is communicated to Schilowitz in
writing thirty (30) days prior to the effective date of termination; provided
however, that the Company pays to Schilowitz a severance payment equal to the
aggregate Base Fee otherwise owed to him over the remaining term of the
Employment Period and allow Schilowitz to retain any options granted under any
option plan granted to him notwithstanding the fact that such options may not be
vested and/or exercisable at the time of termination under this Section 5(a).
(b) For purposes of this Agreement "For Cause" shall mean:
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(i) Deliberate misappropriating any funds or properties of the Company;
(ii) Gross mismanagement of the Company;
(c) In the event Schilowitz is not nominated or re-elected to
serve as a member of the Board of Directors during the Period, either party may
terminate this Agreement and Schilowitz shall be entitled to continue to receive
his Base Fee as set forth in Section 3(a) above for the remainder of the Period
and retain any options granted under any option plan notwithstanding the fact
that such options may not be vested and/or exercisable at the time of
termination under this Section 5(c).
(d) In the event that Schilowitz dies or becomes disabled so
as not to be able to perform his duties as set forth herein for a period
exceeding twelve (12) months, this Agreement shall terminate and no further
compensation shall be payable to Schilowitz, except as may otherwise be provided
under any insurance policy, employee benefit plan, or similar instrument;
provided however, that during any such period of disability, Schilowitz shall be
entitled to his base salary as provided under Section 3(a) for a period not to
exceed twelve (12) months.
6. Covenant Not to Compete: Schilowitz agrees that, commencing the date hereof
and continuing until the due date of his final payment of Base Fee due
hereunder, he will not, except on behalf of the Company or with the written
consent of the Company (i) engage in any business activity in the United States,
directly or indirectly, on his own behalf or as a partner, stockholder (except
by ownership of less than fifty percent (50%) of the outstanding stock of a
publicly-held corporation), director, trustee, principal, agent, employee,
consultant or otherwise of any person, firm or corporation
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which then is competitive with an activity in which the Company or any parent or
subsidiary of the Company is then engaged at the time; (ii) allow the use of his
name by or in connection with any business activity which then is principally
competitive with any activity in which the Company or any of its parents or
subsidiaries is then engaged; or (iii) offer employment to or employ, for
himself or on behalf of any then competitor of the Company or any of its parents
or subsidiaries, any persons who at any time within the prior 6 months shall
have been employed by the Company or any parent or subsidiary of the Company.
Schilowitz recognizes that as an officer and/or director of
the Company, he has a fiduciary duty to reveal to the Company all business
opportunities that he may discover if said opportunities concern technology,
products or business which is related, either directly or indirectly, to the
Company's type of technology, products or business, either at the present or in
the anticipated future. In that event, the Company shall have the first right to
participate in said business opportunity. For the purposes of this section,
"business opportunity" shall include but shall not be limited to, the purchase
of any interest in any business entity which is related to the type of
technology products or business of the Company, by either Schilowitz, any agent
of Schilowitz, or an entity controlled by Schilowitz, its officers, directors,
agents, attorneys, employees, subsidiaries, parents, affiliates, joint ventures,
partners, division, predecessors, successors, and all other persons acting for,
purporting to act for or subject to the control of Schilowitz.
7. Default - Remedies: In the event of proof of breach by
Schilowitz, the Company shall be entitled to pursue any remedy at law or equity,
and shall specifically have the right to terminate any further payments of any
kind or nature to be made under this Agreement.
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8. Confidential Information: Except as otherwise required by
law, Schilowitz shall not disclose or use at any time, except as part of his
employment by the Company, either during or subsequent to such employment, any
secret or confidential information or knowledge obtained by Schilowitz while
employed by the Company. Without limiting the generality of the foregoing,
Schilowitz shall not disclose or use any information pertaining to the business
of the Company or any parent or subsidiary of the Company, including, but not
limited to, profit figures, names of or relationships with customers or
advertisers, or the terms of any contracts to which it or they may be a party.
The obligation imposed by this Section 8 shall survive the expiration or other
termination of this Agreement.
9. Surrender of Documents: Schilowitz shall, at the request of
the Company, promptly surrender to the Company or its nominee, upon any
termination of his employment hereunder, or at any time prior thereto, any
document, memorandum, record, letter, specification or other paper in his
possession or under his control relating to the operations, business, customers,
or affairs of the Company or its affiliates.
10. Waiver of Breach: The waiver be either the Company or
Schilowitz of any provision of this Agreement shall not operate or be construed
as a waiver of any subsequent breach by either the Company or Schilowitz.
11. Severability: The invalidity or unenforceability of any
provision of this Agreement, whether in whole or in part, shall not in any way
affect the validity or enforceability of any other part of such provision or of
any provision herein contained, and any invalid or
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unenforceable provision or part thereof shall be deemed severable to the extent
of any such invalidity or unenforceability. If such invalidity or
unenforceability is due to the unreasonableness of the time or geographical area
covered by the covenants or restrictions of such provision, such covenants and
restrictions shall nevertheless be effective for such period of time and for
such area as may be determined to be reasonable by a court of competent
jurisdiction.
12. Assignment; Binding Effect; Prior Agreements: The
obligations of Schilowitz hereunder may not be assigned or delegated without the
prior written consent of the Company. The rights and obligations of the parties
shall inure to the benefit of, and be binding upon, their respective heirs,
personal representatives, successors and assigns. In addition, this Agreement
supersedes all other prior Agreements.
13. Notices:
(a) All notices, requests, demands, and other communications
hereunder must be in writing and shall be deemed to have been given if delivered
by hand or mailed within the continental United States by first class, certified
mail, return receipt requested, postage and registry fees prepaid, or sent by
telecopier (with receipt confirmation), to the applicable party and addressed as
follows:
(i) if to the Company:
The Harmat Organization, Inc.
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
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(ii) if to Schilowitz:
▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
(b) Any notice or other communication given by certified mail
shall be deemed given at the time of certification thereof, except for a notice
changing a party's address which shall be deemed given at the time of receipt
thereof. Any notice or other communication sent by telecopier transmission shall
be deemed given at the time of written confirmation of receipt.
14. Entire Agreement of the Parties: This Agreement expresses
the entire agreement of the parties, and all promises, representations,
understandings, arrangements and prior agreements are merged herein and
superseded hereby. No person, other than pursuant to a resolution of the Board,
shall have any authority on behalf of the Company to agree to modify or change
this Agreement or anything in reference thereto, and any such modification or
change must be in writing and signed by both parties hereto.
15. Laws Governing: This Agreement has been entered into in
the State of Florida and shall be construed, interpreted and governed in
accordance with the laws of the State of Florida without regard to the choice of
laws provisions thereof.
16. Counterparts: This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute but one document.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officer, and Schilowitz has hereunto set his
hand as of the day and year first above written.
THE HARMAT ORGANIZATION, INC.
By:
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Chairman
Accepted and Agreed
By:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
