Exhibit 10.4
[EXECUTION COPY]
Walnut Financial Services, Inc.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
As of November 1, 1999
Xxxx Xxxxxx
Windy City, Inc.
0000 Xxxxxx Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Dear Xx. Xxxxxx:
Walnut Financial Services, Inc. (the "Company") desires to
engage Windy City, Inc. ("Windy City") as a consultant, and Windy City desires
to be so engaged by the Company, all subject to the terms and conditions set
forth in this letter agreement (this "Agreement").
Accordingly, in consideration of the mutual covenants
hereinafter set forth and intending to be legally bound, the Company and Windy
City hereby agree as follows:
1. Engagement; Term. The Company hereby engages Windy
City, and Windy City hereby accepts such engagement and agrees to serve as a
consultant to the Company, upon the terms and conditions hereinafter set forth,
for a term commencing on November 1, 1999 (the "Effective Date") and (unless
sooner terminated as hereinafter provided) expiring twelve months after the
Effective Date (such term being hereinafter referred to as the "Initial Term").
Thereafter, this Agreement shall automatically be extended for one or more
additional three-month periods unless Windy City or the Company gives written
notice, no less than ninety (90) days prior to the end of the Initial Term, or,
as applicable, sixty (60) days prior to the end of any extension thereof, of
Windy City's or the Company's election not to renew the Agreement. As used in
this Agreement, "Term" shall be defined as the Initial Term and, if applicable,
any extension thereof.
2. Duties; Conduct.
(a) During the Term, Windy City shall make available
to the Company the services of Xxxx Xxxxxx ("Xxxxxx") who shall serve in the
capacity of a senior advisor to the Company; as such, Windy City shall render
consulting services from time to time as hereinafter provided on such project or
projects relating to the business, affairs and management of the Company as may
be reasonably delegated to Windy City by the Board of Directors of the Company
("Board of Directors"), the Company's Co-Chief Executive Officers or, as
applicable, the Company's Chief Executive Officer. Windy City agrees that it
shall use its best efforts to perform such services faithfully and diligently,
and to the best of its ability, and shall use its best
efforts to cause Kanter to use his best efforts to perform such services
faithfully and diligently, and to the best of his ability.
(b) To the extent practicable, the services to be
provided by Windy City shall be performed at such times as are reasonably
convenient to Windy City. The Company acknowledges that Windy City and Kanter
may have other activities, obligations and engagements which may command its or
his time and attention and the Company will exercise its best efforts to respect
such other commitments.
(c) The services to be provided hereunder may require
travel. Domestic travel shall be as reasonably required for the performance of
the duties hereunder; except as provided below, Windy City shall not need prior
approval for any domestic travel required hereunder unless and until it incurs
business expenses in connection with such travel in the aggregate amount of
$10,000 per annum. Once such threshold has been exceeded, Windy City shall
obtain the consent of the Company's Chief Operating Officer prior to incurring
any additional domestic travel expense. The parties agree that, subject to the
prior two sentences, (i) business class (as opposed to coach) and (ii) the costs
of upgrade certificates pursuant to frequent flier programs (not to exceed $100
per flight) shall be deemed to be reasonable expenses. Foreign travel shall be
as the Company and Windy City shall mutually agree.
3. Compensation and Expenses.
(a) Except as otherwise provided in Section 3(b), as
full compensation for all services to be provided by Windy City hereunder during
the Term, the Company will pay Windy City and Windy City will accept consulting
fees at an annual rate of One Hundred Thousand Dollars ($100,000). Such
consulting fees will be paid monthly in arrears.
(b) The Company will reimburse Windy City for all
reasonable travel, business entertainment and other business expenses as may be
incurred by it during the Term in the performance of the duties and
responsibilities assigned to it under this Agreement. Such reimbursements shall
be made by the Company on a timely basis upon submission by Windy City of proper
accounts therefor in accordance with the Company's standard procedures.
4. Termination.
(a) The Company may terminate the consulting
engagement hereunder and this Agreement at any time for Cause. For purposes of
this Agreement, the term "Cause" shall mean any of the following: (i) conviction
of a felony by Kanter; (ii) perpetration of an intentional and knowing fraud by
Windy City or Kanter against or adversely affecting the Company or any customer,
client, agent, or employee thereof; (iii) any action or conduct by Windy City or
Kanter in any manner which would reasonably be expected to harm the reputation
or goodwill of the Company; (iv) willful breach of a covenant set forth in
Section 5 or 6 by Windy City or Kanter; (v) substantial failure of Windy City to
perform its duties hereunder; or (vi) subject to Section 2(b) above and after
taking into account Kanter's reasonable personal commitments and vacation time,
Windy City's failure or inability to make Kanter available to provide the
services contemplated hereunder for any reason as determined in good faith by
the
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Company's Board of Directors; provided, however, that a termination pursuant to
clause (iii), (v) or (vi) shall not become effective unless Windy City fails to
cure such action, conduct or failure to perform within fifteen (15) days after
written notice from the Company, such notice to describe such action, conduct or
failure to perform and identify what reasonable actions shall be required to
cure such action, conduct or failure to perform, if such action, conduct or
failure to perform is susceptible of cure.
No act or failure to act on Windy City's or Kanter's
part shall be considered "willful" under this Section 4(a) unless it is done, or
omitted to be done, by Windy City or Kanter in bad faith or without reasonable
belief that its or his action or omission was in the best interests of the
Company. Any act or failure to act that is based upon authority given pursuant
to a resolution duly adopted by the Board of Directors, or upon direction or
authority of the Company's Co-Chief Executive Officers or, as applicable, the
Company's Chief Executive Officer, or upon the advice of counsel for the
Company, shall be conclusively presumed to be done, or omitted to be done, by
Windy City in good faith and in the best interests of the Company.
(b) The Term shall terminate forthwith upon a sale of
all or substantially all of the assets of the Company.
(c) Windy City may terminate the consulting
engagement hereunder and this Agreement at any time in the event of any material
breach of this Agreement by the Company; provided, however, that such
termination shall not become effective unless the Company fails to cure such
breach within fifteen (15) days after written notice from Windy City, such
notice to describe such breach and identify what reasonable actions shall be
required to cure such breach.
(d) In the event of a termination pursuant to any of
Section 4(a), (b) or (c) above, Windy City shall be entitled to, and the Company
shall pay to Windy City within thirty (30) days after any such termination, any
accrued but unpaid consulting fees to the date of termination and any accrued
but unpaid expenses required to be reimbursed pursuant to Section 3(b) above. In
the event of a termination pursuant to any of Section 4(b) or (c) above, Windy
City shall be entitled to continued payment of the consulting fees pursuant to
Section 3(a) above until the expiration of the Term as if such termination had
not occurred, with such payments being in addition to the payments described in
the previous sentence.
5. Nonsolicitation; Nondisclosure of Proprietary
Information; Surrender of Records.
5.1 Nonsolicitation. In view of the unique and
valuable services it is expected Windy City and Kanter will render to the
Company, Windy City's and Kanter's knowledge of the customers, trade secrets,
and other proprietary information relating to the business of the Company and
the Company's subsidiaries and their customers and suppliers, and in
consideration of compensation to be received hereunder, Windy City and Kanter
each agrees that during the Term and for a period of one year subsequent to any
termination hereunder,
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Windy City and Kanter shall not (i) directly or indirectly solicit or attempt to
solicit any of the employees, agents, consultants or representatives of the
Company or the Company's subsidiaries to terminate his, her, or its relationship
with the Company or the Company's subsidiaries; or (ii) directly or indirectly
solicit or attempt to solicit any of the employees, agents, consultants (other
than Xxxxxx Xxxxx and/or Chicago Advisory Group) or representatives of the
Company or the Company's subsidiaries to become employees, agents,
representatives or consultants of any other person or entity.
5.2 Proprietary Information. Windy City and Kanter
each acknowledges that during the course of the consulting engagement hereunder
Windy City and Kanter will necessarily have access to and make use of
proprietary information and confidential records of the Company and the
Company's subsidiaries. Windy City and Kanter each covenants that it and he
shall not during the Term or at any time thereafter, directly or indirectly, use
for its or his own purpose or for the benefit of any person or entity other than
the Company, nor otherwise disclose, any such proprietary information to any
individual or entity, unless such disclosure has been authorized in writing by
the Company or is otherwise required by law.
For purposes of this Section 5, "proprietary
information" shall not include information which (i) is or becomes generally
available to the public other than as a result of a breach of this Agreement by
Windy City or Kanter; (ii) was within Windy City's or Kanter's possession or
knowledge prior to its being furnished to the Company, provided that the
information was not obtained in connection with the consulting engagement
hereunder or Kanter's prior employment by the Company; (iii) is independently
developed by Windy City or Kanter other than in connection with the consulting
engagement hereunder; or (iv) is obtained by Windy City or Kanter in its or his
capacity as an investor in the Company or the Company's (or its subsidiaries')
portfolio companies and not in connection with the performance of the duties
hereunder, provided that information obtained by Windy City or Kanter under
circumstances under which it or he has any obligation to keep such information
confidential shall be "proprietary information" to the extent of such
obligation.
5.3 Confidentiality and Surrender of Records. Windy
City and Kanter each agrees that it or he shall not during the Term or at any
time thereafter (irrespective of the circumstances under which the consulting
engagement terminates), except as required by law, directly or indirectly
publish, make known or in any fashion disclose any confidential records to, or
permit any inspection or copying of confidential records by, any individual or
entity other than in the course of such individual's or entity's employment or
retention by the Company, nor shall Windy City or Kanter retain, and will
deliver promptly to the Company, any of the same following termination of the
consulting engagement hereunder for any reason or upon request by the Company.
For purposes hereof, "confidential records" means all correspondence, memoranda,
files, manuals, books, lists, financial, operating or marketing records,
magnetic tape or electronic or other media or equipment of any kind which may be
in Windy City's or Kanter's possession or under its or his control or accessible
to it or him which contain any proprietary information of the Company or the
Company's subsidiaries. All confidential records shall be and remain the sole
property of the Company, or, as applicable, the Company's subsidiaries during
the Term and thereafter.
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5.4 Enforcement. Windy City and Kanter each agrees
that the remedy at law for any breach or threatened breach of any covenant
contained in this Section 5 would be inadequate and that the Company, in
addition to such other remedies as may be available to it at law or in equity,
shall be entitled to institute proceedings in any court or courts of competent
jurisdiction to obtain damages for breach of this Section 5 and injunctive
relief.
6. No Conflict. Windy City covenants that neither it nor
Kanter is now, and shall not become, party to or subject to any agreement,
contract, understanding or covenant, or under any obligation, contractual or
otherwise, in any way restricting or adversely affecting its or his ability to
act for the Company in all of the respects contemplated hereby.
7. Cooperation. Windy City shall cooperate fully with
the Company in the prosecution or defense, as the case may be, of any and all
actions, governmental inquiries or other legal proceedings in which Windy City's
or Kanter's assistance may be requested by the Company. Such cooperation shall
include, among other things, making documents relating to the Company or its
subsidiaries or any of their respective businesses in Windy City's or Kanter's
custody or control available to the Company or its counsel, making Kanter
available for interviews by the Company or its counsel, and making Kanter
available to appear as a witness, at deposition, trial or otherwise. Any
reasonable vouchered out-of-pocket expenses incurred by Windy City in fulfilling
its obligations under this Section 7 shall be promptly reimbursed by the
Company.
The provisions of this Section 7 shall survive the
termination or expiration of this Agreement and the Term; provided, however,
that Windy City's obligations under this Section 7 subsequent to the expiration
of this Agreement and the Term shall be on terms to be negotiated between Windy
City and the Company's Board of Directors in good faith.
8. Notices. Any notice, consent, request or other
communication made or given in accordance with this Agreement shall be in
writing either (i) by personal delivery to the party entitled thereto, (ii) by
facsimile with confirmation of receipt, or (iii) by registered or certified
mail, return receipt requested. The notice, consent, request or other
communication shall be deemed to have been received upon personal delivery, upon
confirmation of receipt of facsimile transmission, or, if mailed, three days
after mailing. Any notice, consent, request or other communication made or given
in accordance with this Agreement shall be made to those listed below at their
following respective addresses or at such other address as each may specify by
notice to the others:
To the Company:
Walnut Financial Services, Inc.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxx
Facsimile No.: (000) 000-0000
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With a copy to:
Xxxxx X. Xxxxxxxx, Esq.
Xxxxxx Xxxxx Xxxxxxxx & Xxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
To Windy City:
Windy City, Inc.
0000 Xxxxxx Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxx
Facsimile No.: (000) 000-0000
9. Miscellaneous.
(a) The failure of either party at any time to
require performance by the other party of any provision hereunder will in no way
affect the right of that party thereafter to enforce the same, nor will it
affect any other party's right to enforce the same, or to enforce any of the
other provisions in this Agreement; nor will the waiver by either party of the
breach of any provision hereof be taken or held to be a waiver of any prior or
subsequent breach of such provision or as a waiver of the provision itself.
(b) This Agreement is a personal contract calling for
the provision of unique services by Kanter, and Windy City's rights and
obligations hereunder may not be sold, transferred, assigned, pledged or
hypothecated by Windy City or Kanter. The rights and obligations of the Company
hereunder will be binding upon and run in favor of the successors and assigns of
the Company, but no assignment by the Company shall release the Company from its
obligations hereunder, and the Company shall not assign this Agreement to any
entity outside of the Company.
(c) Each of the covenants and agreements set forth in
this Agreement are separate and independent covenants, each of which has been
separately bargained for and the parties hereto intend that the provisions of
each such covenant shall be enforced to the fullest extent permissible. Should
the whole or any part or provision of any such separate covenant be held or
declared invalid, such invalidity shall not in any way affect the validity of
any other such covenant or of any part or provision of the same covenant not
also held or declared invalid. If any covenant shall be found to be invalid but
would be valid if some part thereof were deleted or the period or area of
application reduced, then such covenant shall apply with such minimum
modification as may be necessary to make it valid and effective.
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(d) This Agreement shall be governed and construed in
accordance with the laws of the State of New York applicable to agreements made
and to be wholly performed within that State, without regard to the principles
of conflicts of law.
(e) This Agreement sets forth the entire
understanding between the parties as to the subject matter of this Agreement and
merges and supersedes all prior agreements, commitments, representations,
writings and discussions between the parties with respect to that subject
matter. This Agreement may be terminated, altered, modified or changed only by a
written instrument signed by both parties hereto.
(f) The Section headings contained herein are for
purposes of convenience only and are not intended to define or list the contents
of the Sections.
(g) The provisions of this Agreement which by their
terms call for performance subsequent to termination of the Term, or of this
Agreement, shall so survive such termination.
(h) In rendering the services to be rendered by Windy
City hereunder, Windy City shall be an independent contractor. Neither Windy
City nor Kanter shall be considered as having an employee status or being
entitled to participate in any employee plans, arrangements or distributions by
the Company. Neither Windy City nor Kanter shall act as an agent of the Company
and neither shall be entitled to enter into any agreements, incur any
obligations on behalf of the Company, or be authorized to bind the Company in
any manner whatsoever, and neither shall refer to the Company as a customer in
any manner or format without the prior written consent of the Company. No form
of joint venture, partnership or similar relationship between the parties is
intended or hereby created.
As an independent contractor, Windy City shall be
solely responsible for determining the means and methods for performing the
professional and/or technical services described herein, and Windy City shall
have complete charge and responsibility for Kanter. All of Windy City's
activities will be at its own risk and Windy City is hereby given notice of its
responsibility for arrangements to guard against physical, financial, and other
risks, as appropriate.
Except as otherwise required by law, the Company
shall not withhold any sums from the payments to be made for Social Security or
other federal, state or local tax liabilities or contributions, and all
withholding, liabilities, and contributions shall be solely Windy City's
responsibility.
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Please confirm Windy City's agreement with the foregoing by
signing and returning the enclosed copy of this letter, following which this
will be a legally binding agreement between us as of the date first written
above.
Very truly yours,
WALNUT FINANCIAL SERVICES, INC.
By: /s/ Xxxx Xxxxxx
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Name: Xxxx Xxxxxx
Title: President
Accepted and Agreed:
Windy City, Inc.
By: /s/ Xxxxxx X. Xxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
Xxxx Xxxxxx hereby accepts, and agrees to abide by, the terms
of Section 5 of the Agreement.
/s/ Xxxx Xxxxxx
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Xxxx Xxxxxx
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