1
EXHIBIT 10.3
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (this "Agreement"), is made and
entered into as of February 13, 1998, by and among Inland Entertainment
Corporation, a Utah corporation (the "Company"), and ▇▇▇▇▇▇ ▇▇▇▇▇ Consultants,
Inc., a California corporation (the "Consultant").
1. Consulting Services.
1.1 Scope and Term. During the period from the February 13,
1998, through February 13, 1999, (the "Consultation Period"), the Consultant
agrees to provide consulting services from time to time to the Company. During
the Consultation Period, the Consultant shall be engaged by the Company in a
consulting capacity to render such advisory services and projects as the
Consultant may be assigned from time to time by the Chairman of the Board of the
Company for matters specifically relating to the Barona Casino and the Barona
Band of Mission Indians. The Consultant shall submit a written report regarding
the project assignments and/or services rendered within 15 days of the end of
each month of the Consultation Period (the "Due Date"). If Consultant fails to
submit this written report to the Chairman of the Board within 30 days of the
Due Date, payments to the Consultant under Section 2 shall be suspended. It is
further agreed that either party may terminate this agreement upon 30 days prior
written notice. In the event that Company terminates this agreement prior to end
of the Consultation Period, the Consultant shall receive all unpaid compensation
still due as set forth in Section 2 and shall also receive vesting in the Stock
options as set forth in Section 2.1 as if this agreement was not terminated by
Company.
1.2 Devotion of Time and Effort. The time that the
Consultant shall be obligated to devote to such services shall not exceed
reasonable limits, and to the extent reasonably practicable, the Company on the
one hand, and the Consultant, on the other hand, shall schedule the times at
which its services shall be required to suit their mutual convenience. The
Consultant's inability to be reasonably available to discharge its duties under
Section 1.1 due to the physical or mental disability of its sole shareholder,
its other business or travel commitments, or other causes beyond its reasonable
control, including without limitation, any force majeure, shall not in any
instance or instances be deemed to be a breach of Section 1.1
1.3 Continued Availability and Cooperation. During the
Consultation Period and for the balance of the time referred to in the last
sentence of this Section 1.3, the Consultant and its sole shareholder shall
cooperate fully with the Company and the Company's counsel in connection with
any present or future, actual or threatened, litigation, or administrative
proceeding involving its officers, directors, agents, employees, stockholders,
successors or assigns and relating to events or conduct occurring (or claimed to
have occurred) during the period of the Consultant's service with the Company.
This cooperation shall include but not be limited to (a) making himself
2
reasonably available for interviews and discussions with the Company and the
Company's counsel as well as for depositions and trial testimony, (b) if
depositions or trial testimony are to occur, making himself reasonably available
and cooperating in the preparation for them and to the extent that the Company
or the Company's counsel reasonably request, (c) refraining from impeding in any
way prosecution or defense of such litigation or administrative proceeding, and
(d) cooperating fully in the development and presentation of the prosecution or
defense of such litigation or administrative proceeding. The Consultant shall be
reimbursed by the Company for his reasonable travel, telephone and similar
expenses incurred in connection with such cooperation, which the Company or the
Company's counsel shall reasonably endeavor to schedule at times not conflicting
with the reasonable requirements of any future employer of the Consultant or
with the requirements or any third party with whom the Consultant has a business
relationship that provides remuneration for the Consultant, and not conflicting
with the Consultant's other business or travel commitments. The Consultant shall
not unreasonably withhold his availability for such cooperation.
2. Compensation During Consultation Period. During the Consultation
Period, so long as its sole shareholder is physically and mentally able, the
Consultant shall render consultative services to the Company as provided in
Section 1 of this Agreement. The Company shall pay the Consultant as
compensation for its services for the one (1) year period commencing on February
13, 1998, and ending February 13, 1999. The amount is $12,500 for the first six
(6) months and $8,000 for the second six (6) months. A retainer in the amount of
$5,500 and the payment for February 13, 1998, to March 31,1998, will be paid
upon Consultant's execution of this Consulting Agreement. All subsequent
payments will be paid on the 10th day following the end of each month of the
Consultation period. Such payments shall not be made in the event of the death
of the Consultant's sole shareholder or his disability during the Consultation
Period. Furthermore, compensation shall cease upon the termination of this
Agreement, except as provided above. The Consultant shall not be entitled to any
payments other than as set forth in this Section 2.
2.1 Stock Options. As additional consideration, the Company
acknowledges that the Consultant's sole shareholder, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ (the
"Executive"), prior to his voluntary resignation (Resignation date) of
employment with the Company, had vested stock options( the "options") which
enabled the then executive and employee, to purchase 210,000 shares of common
stock, par value $.001 per share, of the Company ("Common Stock"). Prior to the
resignation date as set forth in the Settlement and Release Agreement, the
executive had options that were not vested which enable the same to purchase
290,000 shares of common stock, par value $.001 per share, of the Company stock.
Accordingly, and in consideration hereof, each of the executive's "Stock Option
Agreements" under the Company's 1995 Stock Option Plan shall be amended to
extend all provisions of the Stock Option Agreements through the period of time
the Consultant is engaged as a consultant for the company under this agreement.
Upon termination of this agreement the options herein shall terminate.
2
3
3. Confidential Information. The Consultant understands and agrees
that in the course of providing services to the Company, the consultant will
acquire proprietary and confidential information related to the Company's trade
secrets, intellectual property rights, its future plans and its methods of doing
business. The Consultant agrees and understands that it would be extremely
damaging to the Company if the Consultant disclosed such information to a
competitor or made it available to any other person or company. Consultant
further agrees to keep and hold all such confidential information in trust and
confidence, to observe the strictest secrecy with respect to all information
presented by the Company or obtained by Consultant pursuant to this agreement,
and to take all reasonable precautions and measures to protect the secrecy of
and avoid the disclosure or use of the Confidential Information by any
unauthorized persons or in any unauthorized manner and to prevent it form
falling into the public domain or the possession of persons other than those
persons authorized by the Company to have any such information. Accordingly, as
a material condition of this agreement, Consultant and Consultant's sole
shareholder agree to enter into and execute a Confidentiality and Non-Disclosure
Agreement, the same which is attached hereto and incorporated by reference
herein as Exhibit "A".
Except to the extent that this Agreement becomes publicly available
because of a legal requirement that it be filed with a governmental
instrumentality or agency, all provisions of this Agreement and the
circumstances giving rise hereto are and shall remain confidential and shall not
be disclosed by either party to any person not a party hereto except as
necessary to carry out or enforce the provisions of this Agreement or as may be
required by law. Notwithstanding the foregoing, Consultant may disclose the
terms, amounts and fact of this Agreement to Consultant's spouse, attorney,
financial or tax advisor, or taxing authorities. Before Consultant discloses to
his spouse, attorney, financial or tax advisor or taxing authorities anything
about this Agreement, he will inform them of this confidentiality clause and
they must agree (or in the case of any taxing authority, use its best efforts)
to comply with it. Upon request by the Consultant, the Company will make
reasonable efforts to confirm the compensation terms described in Section 2 to
lending institutions which are considering extensions of credit to Consultant.
Each of the parties has read this Agreement, has had the opportunity to consult
with counsel, fully understand this Agreement's terms and enter into this
Agreement freely and voluntarily and intending to be bound hereby.
4. Covenant Not to Compete. During the Consultation Period, the
Consultant shall not, without the written consent of the Chairman of the Board
of the Company and the President of the Company, participate in any business
enterprise providing consulting services to Viejas Casino and Turf Club and or
Sycuan Casino, located in San Diego County, State of California, if such
enterprise engages in direct competition with the Company as the business of the
Company currently is being conducted, with Barona Casino and the Barona Band of
Mission Indians This covenant not to compete shall not preclude the ownership or
acquisition of securities in any enterprise or the exercise of rights
appurtenant thereto, provided that such securities are listed on a national
securities exchange or are regularly quoted in an established over-the-counter
market and provided further that the securities so owned or acquired comprise
3
4
less than 5% percent of the total outstanding voting securities of such
enterprise and do not give the Consultant any meaningful voice in the management
or operation of such enterprise. In addition, this covenant not to compete shall
not preclude the Consultant from (a) serving as an officer or director of the
Consultant's personal investment holding company, (b) service as a director on
the board of a corporation which is not a competitor to the Company or (c)
engagement as a bona fide part-time consultant to a person or entity which is
not a competitor to the Company ("Permissible Employment").
5. Settlement and Release. Notwithstanding anything to the contrary
here, the company's obligation to make any payments under Section 2 herein shall
be dependent on the Consultant executing the Settlement and Release Agreement
and all periods of revocation having lapsed thereunder.
6. Successors and Binding Agreement. (a) This Agreement shall be
binding upon and inure to the benefit of the Consultant and any successor of or
to the Company, including, without limitation, any persons acquiring directly or
indirectly all or substantially all of the business and/or assets of the Company
whether by purchase, merger, consolidation, reorganization or otherwise (and
successor shall thereafter be deemed included in the definition of the Company
for purposes of this Agreement), but shall not otherwise be assignable or
delegable by the Company. Unless the Consultant otherwise agrees the Company's
obligations hereunder shall not be terminated by any such acquisition of all or
substantially all of the business and/or assets of the Company.
(b) This Agreement shall inure to the benefit of and be
enforceable by the Consultant's and its sole shareholder's personal or legal
representatives, executors, administrators, successors, heirs, distributees
and/or legatees.
(c) This Agreement is personal in nature and neither of the
parties hereto shall, without the consent of the other, assign, transfer or
delegate this Agreement or any rights or obligations hereunder except as
expressly provided in subparagraph (a) of this Paragraph.
(d) This Agreement is intended to be for the exclusive
benefit of the parties hereto, and no third party shall have any rights
hereunder.
7. Publicity. The Consultant shall obtain prior approval from the
Company of the content of any public announcements made by the Consultant with
respect to this Agreement or the transactions contemplated hereby, which
approval shall not be unreasonably withheld or delayed (either as to time or
substance); provided, however, that nothing herein shall prevent the Consultant
from making such announcement to any person or persons (including without
limitation potential future employers, creditors, and others) as the Consultant
may consider necessary in order to satisfy (upon the written advice of counsel)
the Consultant's legal, contractual or other obligations.
8. Injunctive Relief. The Consultant recognizes that any breach or
threatened breach of Sections 3 or 4 of this Agreement is likely to result in
immediate and irreparable
4
5
harm to the Company for which money damages are likely to be inadequate.
Accordingly, the Consultant consents to injunction and other appropriate
equitable relief, subject to the notice requirements of the applicable rules of
civil procedure, upon the institution of proceedings therefore by the Company in
order to protect the Company's rights under any of such Sections. Such relief
shall be in addition to any other relief to which the company be entitled at law
or in equity. Nothing herein shall be construed as prohibiting the Company from
pursuing any other remedies for such breach or threatened breach.
9. Authority. The individual(s) executing this Agreement on behalf
of the Company represent and warrant to the Consultant that the performance of
this Agreement and consummation of the transactions contemplated hereby have
been duly authorized by all requisite action and that each has the power and
authority to execute this Agreement.
10. Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be given by hand delivery, telecopy,
overnight, courier service, or by United States certified or registered mail,
return receipt requested. Each such notice, request, demand or other
communication shall be effective (a) if delivered by hand or by overnight
courier service, when delivered at the address specified in this Section; (b) if
given by telecopy, when such telecopy is transmitted to the telecopy number
specified in this Section and confirmation is received; and (c) if given by
certified or registered mail, three (3) days after the mailing thereof.
Address for notices (unless and until written notice is given of any other
address):
If to the Company: INLAND ENTERTAINMENT CORPORATION
▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇ ▇▇▇▇▇▇
Controller and Chief Accounting Officer
If to the Consultant: ▇▇▇▇▇▇ ▇▇▇▇▇ CONSULTANTS, INC.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
President
11. Further Documents and Acts. Each of the parties hereto agrees to
cooperate in good faith with the other and to execute and deliver such further
instruments and perform such other acts as may be reasonably necessary or
appropriate to consummate and carry into effect the transactions contemplated
under this Agreement.
12. Financial Reporting. Any computation pertaining to the Company's
financial affairs to be made hereunder or referenced herein shall be based on
generally accepted accounting principles, applied on a consistent basis.
13. Attorneys' Fee. In any action, litigation or proceeding between
the parties arising out of or in relation to this Agreement, the prevailing
party in such action shall be
5
6
awarded, in addition to any damages, injunctions or other relief, and without
regard to whether or not such matter be prosecuted to final judgment, such
party's costs and expenses, including reasonable attorneys' fees. Such award
shall include post-judgment attorneys' fees and costs and the same shall not be
deemed as merged into the final judgment.
14. California Law. This Agreement has been negotiated and executed
in the State of California. This Agreement shall be governed by and interpreted
in accordance with the laws of the State of California, including all matters of
construction, validity, performance and enforcement, without giving effect to
principles of conflict of laws. Any dispute, action, litigation or other
proceeding concerning this Agreement shall be instituted, maintained, heard and
decided in the State of California.
15. Amendments/Waiver. This Agreement may be amended, supplemented,
modified and/or rescinded only through an express written instrument signed by
all the parties or their respective successors and assigns. Any party may
specifically and expressly waive in writing any portion of this Agreement or any
breach hereof, but no such waiver shall constitute a further or continuing
waiver of any preceding or succeeding breach of the same or any other provision.
The consent by one party to any act for which such consent was required shall
not be deemed to imply consent or waiver of the necessity of obtaining such
consent for the same or similar acts in the future.
16. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one of the same instruments.
17. Severability. In the event that any one or more of the
provisions contained herein (or parts thereof), or the application thereof in
any circumstances, is held invalid, illegal or unenforceable in any respect for
any reason, the validity and enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in any way impaired
or affected, it being intended that all of the rights and privileges shall be
enforceable to the fullest extent permitted by law. Notwithstanding anything to
the contrary, in the event Sections 3 or 4 or any part thereof was held to be
invalid, illegal or unenforceable, the obligation of the Company to make payment
to the Consultant under Section 2 herein would terminate and any amounts paid to
the Consultant shall be returned to the Company, with interest at 7% per annum,
such interest calculated from the time of such payment.
18. Entire Agreement. With the exception of the Settlement and
Release Agreement by and among the parties entered into concurrently herewith,
this Agreement contains the entire and complete understanding among the parties
concerning its subject matter and all representations, agreements, arrangements
and understandings between or among the parties, whether oral or written, have
been fully merged herein and are superseded hereby.
6
7
19. Remedies. All rights, remedies, undertakings, obligations,
options, covenants, conditions and agreements contained in this Agreement shall
be cumulative and no one of them shall be exclusive of any other.
20. Interpretation. The language in all parts of this Agreement
shall be in all cases construed simply according to its fair meaning and not
strictly for or against any party. Whenever the context requires, all words used
in the singular will be construed to have been used in the plural, and vice
versa, and each gender will include any other gender. The captions of the
Sections of this Agreement are for convenience only and shall not affect the
construction or interpretation of any of the provisions herein.
21. Miscellaneous. Each provision of this Agreement to be performed
by a party hereto shall be deemed both a covenant and condition, and shall be a
material consideration for the other party's performance hereunder, and any
breach thereof by the party shall be deemed a material default hereunder. The
recitals and all other documents referenced in this Agreement are fully
incorporated into this Agreement by reference. Unless expressly set forth
otherwise, all references herein to a "day" shall be deemed to be a reference to
a calendar day. Unless expressly stated otherwise, cross-references herein shall
refer to provisions within this Agreement, and shall not be deemed to be
references to the overall transaction or to any other document. Time is of the
essence in the performance of this Agreement.
22. Withholding of Taxes; Tax Reporting. The Company may withhold
from any amounts payable under this Agreement all such Federal, state, city and
other taxes, and may file with appropriate governmental authorities all such
information returns or other reports with respect to the tax consequences
attendant to any amounts payable under this Agreement, as may, in its reasonable
judgment, be required by law.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement.
INLAND ENTERTAINMENT CORPORATION
Dated: 3/6/98 A Utah Corporation
By: /s/ L. ▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------------
L. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇
Chairman of the Board
Dated: ▇/▇/▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ CONSULTANTS, INC.
A California Corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
President
7
