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Exhibit 5
CONSULTING AGREEMENT
CONSULTING AGREEMENT dated as of November 19, 1998 between Xxxxxx
Xxxxxxx, an individual with an address at 0 Xxxxxx Xxxxx, Xxxxxxxxx, Xxx Xxxx
00000 (the "Consultant"), and North Ridge Securities Corporation (the
"Company"), a New York corporation with a principal office at 1895 Xxxx Xxxxxxx
Xxxx, Xxxxxxxx, Xxx Xxxx 00000.
W I T N E S S E T H :
WHEREAS, Xxxxxx & Ciocia, Inc. ("G&C"), Consultant and Xxxxxx Xxxx have
entered into a Stock Purchase Agreement of November 19, 1998, (the "Stock
Purchase Agreement") pursuant to which Xxxxxx & Ciocia, Inc. is purchasing the
capital stock of both North Shore Capital Management Corp. ("NSCM") and the
Company for cash, as described in the Stock Purchase Agreement; and
WHEREAS, the Company wishes to retain the Consultant as a registered
representative and municipal bonds principal of the Company, and the Consultant
wishes to accept such engagement, all on the terms hereinafter set forth,
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the adequacy and sufficiency of which are hereby
acknowledged, the parties hereto agree hereby as follows:
1. ENGAGEMENT. The Company hereby retains the Consultant as a
registered representative and municipal bonds principal of the Company, and the
Consultant hereby accepts such position, subject to the terms and conditions
hereinafter set forth, under the direction of the executive officers and the
Board of Directors of the Company (the "Board").
2. TERM, RENEWAL. The term of the Consultant's engagement hereunder
shall be deemed to have commenced on November 1, 1998 and shall continue
thereafter for a period of one (1) year and shall renew automatically for a year
unless terminated earlier in accordance with the terms hereof.
3. DUTIES.
(a) The duties of the Consultant shall be acting as a
registered representative and municipal bonds principal of the Company. The
Consultant shall serve the Company loyally, faithfully and to the best of his
abilities and shall devote a
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reasonable amount of working time and effort to the performance of his duties
hereunder. The Consultant shall be available for limited travel as the needs of
the business of the Company require.
(b) The Consultant agrees that he will not, during the term of
this Agreement, engage in any business activity that interferes with the
performance of his obligations under this Agreement.
4. COMPENSATION, BENEFITS, ETC..
(a) In consideration of the services to be rendered by the
Consultant hereunder, the Company shall pay to the Consultant, and he shall
accept, compensation in the form of commissions at a rate of (omitted) of the
net commissions earned by the Company on securities transactions for which the
Consultant shall have acted as primary registered representative, and
(omitted)of the standard agent's commission on life and disability insurance
products sold through NSCM and a commission to be negotiated between Consultant
and Company on single premium annuities, long-term health care, Medicare
supplement policies, etc., based upon the varying gross commissions received by
NSCM.
(b) The Consultant shall receive health insurance from the
Company as the Company provides its employees or under a reasonably comparable
policy.
(c) The Consultant shall receive reimbursement or be included
on the Company's expense account for up to $650 per month for car expenses.
(d) The Company shall maintain its error and omissions policy
in effect as of June 30, 1998 or a reasonably comparable occurrence-based
policy, including coverage of Consultant.
(e) The Company shall pay for all of Consultant's licensing
fees with the National Association of Securities Dealers, Inc. in connection
with his work for the Company.
5. COVENANTS.
(a) The Consultant agrees that all work produced by him,
excepting his financial planning book, under this Agreement or otherwise for the
Company shall be deemed to be a "work made for hire" as defined in the federal
Copyright Act, Title 17 of the United States Code. Without further
consideration, the Consultant hereby irrevocably assigns, transfers and sets
over to the Company, its successors and assigns, all of the Consultant's right,
title and interest in and to any and all developments, processes, discoveries,
technologies and creations and all copyrightable and patentable works, materials
and ideas (collectively "Inventions") and any improvement to any Invention,
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whether or not patentable, copyrightable or legally protectible or recognized as
forms of property, and whether or not completed or used in practice, together
with all information and data relating thereto (hereinafter "Proprietary
Information") (including all designs, drawings, prints, patterns, sketches,
ideas, inventions, improvements, writings and other works of authorship, theses,
books, computer programs, lectures, illustrations, photographs, scientific and
mathematical models, prints and any other subject matter that is or may become
legally protectible or recognized as a form of property) that have been
conceived, made or suggested, or may hereafter be conceived, made or suggested,
either by the Consultant or by others with the assistance or other participation
of the Consultant, and (i) on the Company's premises or during the Consultant's
usual working hours, or (ii) otherwise related to the business of the Company or
any affiliate of the Company.
(b) The Consultant shall disclose promptly to the Company any
and all Inventions and Proprietary Information when conceived or made by the
Consultant, and report promptly to the Company all information of which the
Consultant may become aware during the term of employment with the Company that
may be of benefit to the Company. During the period of his employment hereunder,
the Consultant shall also disclose promptly to the Board of Directors of the
Company all material Inventions relating to the business, products, or projects
of the Company and/or involving the use of the Company's time, materials and/or
facilities.
(c) Upon request by the Company, the Consultant shall, without
compensation other than the Consultant's usual and customary salary, bonus and
benefits hereunder, execute all such assignments and other documents and perform
all such acts necessary to enable the Company to obtain or uphold for its
benefit patents or copyrights for, and other rights to, such Inventions and
Proprietary Information relating thereto, which shall be owned by the Company,
whether or not the Consultant is the inventor thereof.
6. DISABILITY AND DEATH.
(a) If the Consultant, due to physical or mental disability or
incapacity, shall have been unable fully to perform his duties hereunder for any
60 days during any twelve (12) consecutive months, as determined in good faith
by the Board of Directors, then the Company may terminate this Agreement and the
Consultant's consultancy hereunder by written notice to the Consultant or his
legal guardian, effective immediately upon delivery of such notice.
(b) If the Consultant shall die during the term of this
Agreement, this Agreement and the Consultant's consultancy
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hereunder shall terminate immediately upon the Consultant's
death.
7. TERMINATION OF CONSULTANCY.
(a) The Company may at any time terminate this Agreement and
the Consultant's consultancy hereunder by written notice to the Consultant
effective immediately upon delivery of such notice if:
(i) the Consultant shall commit any act whether
or not involving the Consultant that constitutes a felony in
the jurisdiction involved; or
(ii) the Consultant engages in repeated substance
abuse; or
(iii) the Board, after due inquiry and providing the
Consultant with a reasonable opportunity to be heard, shall have
determined in good faith that the Consultant committed wilful
malfeasance or gross misconduct in his performance hereunder, or any
material act of fraud or dishonesty against the Company; or
(iv) the Consultant shall have refused to obey a
directive of the Board of Directors or an Executive Officer of the
Company to perform an act that the Consultant is or should be able to
perform and that is within the role of registered representative and/or
a municipal bonds principal and which is not illegal or unethical for
30 days after receipt of a written directive to perform such act.
(b) The Consultant may at any time terminate this Agreement
and the Consultant's consultancy hereunder by written notice to the Company
effective immediately upon receipt of such notice if:
(i) the Company shall have committed a material
breach of this Agreement that the Company shall not have cured for 30
days after notice of the particulars of the breach, provided that if
such material breach cannot reasonably be cured in such 30-day period
then only if the Company shall not have promptly commenced or
diligently pursued a cure; or
(ii) the Company undergoes adverse publicity that
renders the Company unable to conduct its business for more than 60
days.
(c) the Consultant may terminate this Agreement by notice to
the Company of termination, to be effective 60 days after the Company's receipt
of such notice.
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(d) All disputes, conflicts and claims related to this Article
7 shall be resolved by arbitration in New York City before the American
Arbitration Association ("AAA") in accordance with the rules of the AAA.
Judgement on any award may be entered in any court having jurisdiction thereof.
8. NON-DISCLOSURE OF CONFIDENTIAL
INFORMATION AND NON-COMPETITION.
(a) The Consultant acknowledges that he has been informed that
it is the policy of the Company and its affiliates to maintain as secret and
confidential all information (i) relating to the products, processes,
technologies, inventions, designs and/or systems used by the Company and its
affiliates and (ii) relating to the suppliers, customers and Consultants of the
Company and its affiliates (all such information hereafter referred to as
"Confidential Information"), and the Consultant further acknowledges that such
Confidential Information is of great value to the Company and its affiliates.
The parties hereto recognize that the services to be performed by the Consultant
are special and unique, and that by reason of his engagement by the Company and
its affiliates, he has and will acquire Confidential Information as aforesaid.
The parties hereto confirm that it is reasonably necessary to protect the
Company's goodwill that the Consultant agree, and accordingly the Consultant
does agree, that he will not directly or indirectly (except where authorized by
the Board of Directors of the Company for the benefit of the Company), for or on
behalf of himself or any Person (hereinafter defined):
(i) at any time during his engagement for the Company
or after he ceases to be retained by the Company for any reason,
divulge to any Person other than the Company (hereinafter referred to
collectively as a "third party"), or use or cause to authorize any
third parties to use, any such Confidential Information excepting
information regarding clients of Consultant listed on Schedule A as
attached, and if both Consultant and Xxxxxx Xxxx cease to be employed
or retained by the Company then information regarding clients of both
Consultant and Xxxxxx Xxxx as listed on Schedules A and B respectively
(hereinafter referred to as "Exempt Clients"), or any other information
regarded as confidential and valuable by the Company that he knows or
should know is regarded as confidential and valuable by the Company
(whether or not any of the foregoing information is actually novel or
unique or is actually known to others and whether or not the
Confidential Information is labeled as confidential); or
(ii) at any time during his engagement by the
Company, act as or be an officer, director, stockholder, consultant or
advisor, partner or Consultant of, or render
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any service for, or have any profit-sharing or other interest in, or
lend money or make any other financial accommodation for or on behalf
of, or undertake any business transaction with, any Person that engages
in or is planning or preparing to engage in either direct competition
with the Company or any corporate affiliate of the Company, or the
business of providing, within a ten mile radius around the site of any
office of the Company or any affiliate of the Company, the same
services as those provided by the Company or any corporate affiliate,
except that he may hold securities that are part of a publicly traded
class of securities (not in excess of 5% of the outstanding total of
any class of such securities) in competitive concerns so long as he
discloses such holding to the Company; or
(iii) at any time during his engagement by the
Company, engage in or plan or prepare to engage in (A) competition with
the Company or any corporate affiliate or (B) the business of
providing, within a five-mile radius around the site of any office of
the Company or any affiliate of the Company, the same services as those
provided by the Company or any corporate affiliate; or
(iv) at any time during his engagement for the
Company and for a period of two years after he ceases to be retained by
the Company for any reason, attempt in any manner to solicit, or
instruct, assist or provide any services in connection with the
solicitation of, business from any Person that is, or shall have been
after the date hereof, a client of the Company or any affiliate of the
Company excepting Exempt Clients (a "Client") (except on behalf of the
Company), or persuade, or communicate with or attempt in any manner to
persuade, any Client to cease doing business or to reduce the amount of
business that any such Client has customarily done or contemplates
doing with the Company or any affiliate of the Company, whether or not
the relationship between the Company and such Client was originally
established in whole or in part through the efforts of the Consultant
excepting Exempt Clients; or
(v) at any time during his engagement with the
Company and for a period of two years after he ceases to be retained by
the Company for any reason, employ or otherwise obtain services from,
or solicit or otherwise attempt to employ or otherwise obtain services
from, or assist any Person in employing or otherwise obtaining services
from, or attempting to employ or otherwise obtain services from, any
person who is then, or at any time during the preceding twelve months
shall have been, in the employ of or retained by the Company and/or its
affiliates; or
(vi) at any time during his engagement by the Company
and the applicable period thereafter specified in
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each of the clauses above, negotiate for or enter into an agreement,
understanding or arrangement, or otherwise cause or authorize any
Person, to take any of the actions prohibited by such clause.
As used herein, the term "Person" means any person, corporation, partnership or
other entity, and the term "Client" shall mean (i) anyone who is then a client
of the Company or any of its affiliates, (ii) anyone who was a client of the
Company at any time during the two-year period immediately preceding the alleged
prohibited conduct, and (iii) any prospective client that shall have met with a
registered representative of the Company. This Section 8 shall be assignable by
the Company in a sale of all or substantially all of the assets of the Company
and shall apply to the continuing business conducted with such transferred
assets and replacements thereof.
(b) The Consultant shall, upon the expiration of his engagement for the
Company for any reason, forthwith deliver up to the Company any and all
drawings, notebooks, keys and other documents and materials, or copies thereof,
in his possession or under his control that relate to any Confidential
Information, including any of same that relate to any Invention relating to the
business of the Company or any affiliate of the Company described in Section
5(a), or that are otherwise the property of the Company. This Section 8 and
Section 5(c) shall survive any expiration or other termination of this
Agreement.
(c) The Consultant agrees that any breach or threatened breach
by him of any provision of this Section 8 will, because of the unique nature of
the Consultant's services and the Confidential Information entrusted to him as
aforesaid, cause irreparable harm to the Company and shall entitle the Company,
in addition to any other legal remedies available to it, to apply to any court
of competent jurisdiction to enjoin such breach or threatened breach, without
the need to show irreparable injury or to post any bond, which are hereby waived
by the Consultant. The parties hereto understand and intend that each
restriction agreed to by the Consultant hereinabove shall be construed as
separable and divisible from every other restriction, and the unenforceability,
in whole or in part, of any such restriction, in any jurisdiction, shall not
affect the enforceability of such restriction in any other jurisdiction or of
the remaining restrictions in any jurisdiction, and that one or more or all of
such restrictions may be enforced in whole or in part as the circumstances
warrant. The Consultant further acknowledges that the Company is relying upon
such covenants as an inducement to provide the Consultant with employment and in
connection therewith to permit the Consultant to have continued access to
Confidential Information.
9. INDEMNIFICATION.
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(a) In addition to the Company's obligation to maintain its
errors and omissions insurance policy, the Company agrees to indemnify
Consultant for any settlements, judgments, damages, costs, fees and expenses
arising from any suit, action or proceeding (collectively a "Claim") against the
Consultant if based on or relating to (i) the Consultant's own direct action
with a client of the Company, so long as such claim does not arise out of
Consultant's personal negligence or fraudulent conduct in dealing with such
client, and (ii) transactions in which the Consultant acted in a supervisory
capacity, so long as Consultant's conduct was not fraudulent in connection with
such transaction.
(b) The Consultant shall immediately notify the Company in
writing, with sufficient time to respond to any Claim or threatened Claim or
answer or otherwise plead in any such action; provided that failure or delay to
supply such notice shall not relieve the Company of its indemnification
hereunder except to the extent that the Company is actually prejudiced by such
failure or delay.
(c) In case any Claim is asserted against the Consultant, and
it notifies the Company of the commencement thereof, then the Company shall be
entitled to participate therein, and to the extent that it may wish, to assume
the defense, conduct or settlement thereof. After notice from the Company to the
Consultant of its election so to assume the defense, conduct or settlement
thereof, the Company shall not be liable to the Consultant for any legal or
other expenses subsequently incurred by the Consultant in connection with the
defense, conduct or settlement thereof; provided, however, that if the
Consultant has material separate defenses that counsel to the Company would be
prohibited from raising because of a conflict of interest, then the Consultant
shall have the right to be represented by its own counsel at the Company's
expense. The Consultant will cooperate with the Company in connection with any
such Claim and make personnel, books and records relevant to the Claim available
to the Company.
(d) Prior to finally settling any such Claim, the Company
shall give to the Consultant prompt notice of its intention to settle same and
the terms of such proposed settlement. No settlement of any Claim shall be made
without the consent of the Company.
10. ENTIRE AGREEMENT. This Agreement, contains the entire understanding
of the parties with respect to the subject matter hereof and supersedes any
prior agreement between the parties. No change, termination or attempted waiver
of any of the provisions hereof shall be binding unless in writing and signed by
the party against whom the same is sought to be enforced; PROVIDED, HOWEVER,
that the Consultant's compensation may be increased at any time by the Company
without in any way affecting
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any of the other terms and conditions of this Agreement, which in all other
respects shall remain in full force and effect. No action by either party shall
be deemed a waiver of any right hereunder, and no waiver of any right at any
time shall operate as a waiver of any other right or as a waiver of such right
at any other time.
11. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
shall inure to the benefit of the respective heirs, legal representatives,
successors and assigns of the parties hereto, except that this agreement may not
be assigned by the Consultant, or by the Company except to an affiliate of the
Company, in which case the Company shall remain liable for all of its
obligations hereunder.
12. GOVERNING LAW. All matters concerning the validity and
interpretation of and performance under this Agreement shall be governed by the
laws of the State of New York, except with respect to its conflict of laws
provisions.
13. NOTICES. All notices or other communications which are required or
permitted hereunder shall be in writing and sufficient when delivered personally
or telecopied by confirmed facsimile, or three (3) business days after mailing
by registered or certified mail, return receipt requested, or the next business
day if sent by nationally recognized overnight courier providing for a return
receipt, in each case postage prepaid, addressed as follows:
If to Company:
Xxxxxx & Xxxxxx, Inc.
000 Xxxxxxxx Xxxxxxxxx
Xxxxx Xxxx, XX 00000
Attn: Chief Financial Officer
Facsimile: (000) 000-0000
with a copy to:
Akabas & Xxxxx
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxxxx, Esq.
Facsimile: (000) 000-0000
If to Consultant:
Xxxxxx Xxxxxxx
0 Xxxxxx Xxxxx
Xxxxxxxxx, Xxx Xxxx 00000
With a copy to:
Xxxxxx Xxxxxxxxx, Esq.
Steinberg, Fineo, Xxxxxx & Burlant, P.C.
0000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxx Xxxx, Xxx Xxxx 00000
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Any party may by notice change the address to which notice or other
communications to it are to be delivered or mailed, effective ten (10) days
after such notice.
14. SEVERABILITY. The invalidity or unenforceability of any particular
provision of this Agreement in any jurisdiction shall not affect the other
provisions hereof or such provision in other jurisdictions, and this Agreement
shall be construed in such jurisdiction in all respects as if such invalid or
unenforceable provisions were omitted. Furthermore, in lieu of such illegal,
invalid, or unenforceable provision in such jurisdiction there shall be added
automatically as a part of this Agreement a provision as similar in terms to
such illegal, invalid, or unenforceable provision as may be possible and be
legal, valid and enforceable.
15. CONSTRUCTION. Throughout this Agreement, each pronoun shall be
deemed to include the masculine, the feminine and the neuter, the singular and
plural, and vice versa, where such meanings would be appropriate. The headings
herein are inserted only as a matter of convenience and reference, and they in
no way define, limit or describe the scope of this Agreement or the intent of
any provisions thereof.
16. FURTHER ASSURANCES. Each party shall execute such other documents
and instruments as shall be requested by the other party in order fully to
accomplish the purposes of this Agreement.
17. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, all of which taken together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the Consultant has executed this Agreement and the
Company has caused this Agreement to be executed by its duly authorized officer
as of the date first above written.
NORTH RIDGE SECURITIES
CORPORATION
\s\ Xxxxxx Xxxxxxx By: Xxxxx Xxxxxx
XXXXXX XXXXXXX Name: Xxxxx Xxxxxx
Title: Vice President
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Payments under Section 4(a) and Section 4(c)
and maintenance of insurance
policy under Section 4(f) guaranteed
by
XXXXXX & XXXXXX, INC.
By:\s\Xxxxx Xxxxxx
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Name: Xxxxx Xxxxxx
Title: President
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