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09/11/96
CONSULTING AGREEMENT
Consulting Agreement dated as of September 11, 1996 between National Insurance
Group, Inc., a California corporation (the "Company"), and Scorpion Holdings,
Inc., a Delaware corporation ("Scorpion").
AGREEMENT
The parties hereby agree as follows:
1. SERVICES.
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a) The Company hereby retains Scorpion to render
consulting services to the Company, and Scorpion
hereby agrees to render such services, for the period
commencing on the date hereof and continuing during
the term of this Agreement. Such consulting services
shall be rendered by employees or representatives of
Scorpion reasonably satisfactory to the Company, it
being understood that Xxxx Xxxxxxxxxx and Xxxxx
XxXxxxxx are satisfactory. Scorpion shall render such
consulting services to the Company in connection with
(i) management and strategic planning, (ii) the
identification of financing, acquisition and
divestiture opportunities for the Company and (iii)
other matters relating to the day-to-day business and
operations of the Company, or any of its subsidiaries
or affiliated companies, as the Board of Directors of
the Company may from time to time reasonably request.
b) In the event that the Company, or any of its
subsidiaries or affiliated companies, at any time or
from time to time during the term of this Agreement
engages in any (i) merger, consolidation or sale of
any its assets (other than in the ordinary course of
business) or outstanding securities, or (ii)
acquisition of assets or stock of another company
(each of which is hereinafter referred to as a
"Transaction"), Scorpion shall have the right to act
as a financial advisor to the Company in connection
with such Transaction pursuant to an engagement
agreement, the terms and conditions of which shall be
mutually agreed upon by the Company and Scorpion
acting in good faith (in each case, as appropriately
completed, an "Engagement Agreement"). The parties
acknowledge that Scorpion is not a broker/dealer,
securities underwriter or placement agent and,
accordingly, if a Transaction consists of a public or
private offering or other placement of securities,
Scorpion shall have the right to act as a financial
advisor to the Company and such investment banking
firm(s) as the Board of
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Directors of the Company may select shall be engaged
as underwriter(s) or placement agents(s). Each
Engagement Agreement shall provide for the payment to
Scorpion of a transaction fee for services rendered
by Scorpion or any of its affiliates in respect of
organizing, developing and consummating the
applicable Transaction. Such fee shall be mutually
agreed upon by the Company and Scorpion acting in
good faith; provided however, that in the case of a
public or private offering or other placement of
securities, such amount shall be subject to an
adjustment, by mutual agreement of Scorpion and the
Company acting in good faith, after taking into
account the scope of Scorpion's engagement with
respect thereto.
2. Term.
This Agreement shall be for a term of one year and
shall expire on the first anniversary date of its
date of execution. This term of this Agreement shall
be extended for an additional period of one year from
the first anniversary date of its execution unless
written notice of termination is given by either
party not less than sixty (60) days prior to the
first anniversary date of this Agreement.
Notwithstanding any termination of this Agreement,
Scorpion shall be compensated in accordance with
Section 1 (b) for (i) transactions in progress at the
date of termination and (ii) transactions completed
within (1) one year of the date of termination of
this Agreement between the Company and any party
introduced by Scorpion to the Company prior to the
date of termination of this Agreement. In either
case, Scorpion will be compensated in accordance with
Section 1 (b) above.
3. Fees and Expenses.
a) As compensation for Scorpion's consulting services
rendered pursuant to Section 1 (a), the Company shall
pay to Scorpion an annual fee (the "Consulting Fee")
of $300,000 (the "Base Amount"), which shall be
payable monthly in advance, commencing September 11,
1996.
b) In addition, the Company shall reimburse Scorpion for
reasonable out-of-pocket costs and expenses incurred
in connection with the performance of the consulting
services rendered under this Agreement. Such
reimbursement shall be made by the Company from time
to time within thirty (30) days following its receipt
of a written statement from Scorpion. If requested by
the Company, Scorpion shall provide appropriate
copies of invoices or a reasonably detailed
description of the costs and expenses incurred.
4. Indemnity.
(a) The Company shall indemnify and hold harmless
Scorpion and its affiliates, and their respective
stockholders, partners, directors, officers, agents
and employees, to the full extent lawful, from and
against all losses, claims, damages and liabilities
related to or arising out of this Agreement or the
performance of any consulting services contemplated
hereby,
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including any such services performed prior to the
date hereof and any services performed by any officer
or employee of Scorpion or any of its affiliates, and
shall promptly reimburse (and/or advance to the
extent reasonably requested) Scorpion and any other
party entitled to be indemnified hereunder for all
reasonable out-of-pocket expenses (including counsel
fees and expenses) as incurred by Scorpion or any
such other party in connection with investigating,
preparing or defending any such claim, whether or not
in connection with pending or threatened litigation
in which Scorpion or any other party entitled to be
indemnified hereunder is or may be a party. The
Company will not, however, be responsible for any
losses, claims, damages, liabilities or expenses
which are finally determined to have resulted
primarily from the willful misconduct, gross
negligence or bad faith of Scorpion or any other
party entitled to be indemnified hereunder. The
foregoing agreement shall be in addition to any
rights that Scorpion or any other party entitled to
be indemnified hereunder may have at common law or
otherwise.
(b) Scorpion and each party entitled to be indemnified
hereunder shall have no liability to the Company
related to or arising out of this Agreement or the
performance of any consulting services contemplated
hereby unless a loss results to the Company that is
finally determined to have resulted primarily from
the willful misconduct, gross negligence or bad faith
of Scorpion or any such other party. The Company
hereby consents to personal jurisdiction, service and
venue in any court in which any claim, action or suit
that may give rise to an indemnification obligation
of the Company under this Section 4 is brought
against Scorpion or any other party entitled to be
indemnified hereunder. The provisions of this Section
4 shall survive the expiration or termination of this
Agreement.
5. Notices. Any notice required or permitted to be given hereunder shall
be in writing and shall be deemed to have been delivered on the date
(i) delivered in person or by overnight delivery service, (ii) mailed
by certified or registered mail (return receipt requested) or (iii)
sent by facsimile transmission, with a copy sent simultaneously by the
U.S. mail, if addressed to the respective parties as follows:
If to the Company, to:
National Insurance Group, Inc.
000 Xxxxxx Xxxxx Xxxx., Xxxxx 000
Xxxxx Xxx Xxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxxx
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If to Scorpion, to:
Scorpion Holdings, Inc.
000 Xxxxxxxxx Xxx.
Xxxxx 0000
Xxx Xxxx, XX 00000
Attention: Xxxxx XxXxxxxx
Either party, by notice to the other party given in accordance with this
Section 5, may designate additional or different addresses for subsequent
notices or communications. Notices on behalf of a party may be signed and sent
by an attorney for that party.
6. Permissible Activities. Nothing herein shall in any way preclude
Scorpion from engaging in any other business activities or from
performing any other services for its own account or for the account
of others.
7. No Waiver; Amendments. This Agreement supersedes all prior agreements
between the parties with respect to its subject matter, is intended as
a complete and exclusive statement of the terms of the agreement
between the parties with respect thereto and cannot be changed or
terminated orally. The failure of a party to insist upon strict
adherence to any term of this Agreement on any occasion shall not be
considered a waiver or deprive that party of the right thereafter to
insist upon strict adherence to that term or any other term of this
Agreement. A waiver by either party of any breach of this Agreement
shall not operate as, or be construed to be, a waiver of any
subsequent breach. Any waiver must be in writing.
8. Consulting Relationship. It is understood and agreed that Scorpion
shall for all purposes hereof be deemed to be an independent
contractor and shall not, unless otherwise expressly authorized in
writing by the Company, have any authority to act for or represent the
Company in any way, execute any transaction on behalf of the Company
or otherwise be deemed an agent of the Company. No federal, state or
local withholding deductions shall be withheld from the fees and other
amounts payable to Scorpion pursuant to this Agreement unless
otherwise required by law.
9. Jurisdiction. Any action or proceeding to seek a provisional remedy
pursuant under this Agreement shall be brought against either of the
parties either in the State of California or in the State of New York,
or if it has or can acquire jurisdiction, in the United States
District Court for the Southern District of New York or the Northern
District of California, and each of the parties hereby consents to the
jurisdiction of such courts (and of the appropriate appellate courts)
solely for the purpose of any such action or proceeding and waives any
objection to venue laid therein. Process in any action or proceeding
referred to in the preceding sentence may be served on either party
anywhere in the world, whether within or without the States of
California or New York.
10. Miscellaneous. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and
permitted assigns, including any corporation into which the Company
shall consolidate or merge or to which it shall transfer all or
substantially all of its assets. This Agreement may not be assigned by
either
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party, except that this Agreement may be assigned by Scorpion to any
corporation or other entity controlling, controlled by or under common
control with Scorpion provided that the individuals providing the
consulting services are satisfactory to the Company. This Agreement
shall be governed by and construed in accordance with the laws of the
State of New York applicable to contracts made and to performed
entirely within such State.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
NATIONAL INSURANCE GROUP, INC.
By:
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Name:
Title:
SCORPION HOLDINGS, INC.
By:
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Name:
Title:
