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EXHIBIT 10.9
CONSULTING AGREEMENT
This Consulting Agreement (this "Agreement") is made and entered into
as of the 8th day of October, 1996, by and between The Xxxxxxx X. Xxxxxxx
Consulting Group, Inc., a Georgia corporation (the "Consultant") and
American-European Corporation, a Georgia corporation (the "Company").
W I T N E S S E T H:
WHEREAS, Consultant desires to be engaged as an independent contractor
to provide certain consulting services to the Company, and the Company desires
to engage Consultant to provide such services, all in accordance with the terms
and conditions hereinafter set forth;
NOW, THEREFORE, for and in consideration of the above premises, the
mutual covenants and agreements hereinafter set forth and other good and
valuable consideration, the receipt, adequacy and sufficiency of which are
hereby acknowledged, the parties hereto covenant and agree as follows:
1. Consulting Services.
(a) Subject to the terms and conditions of this Agreement, the
Company hereby engages Consultant as an independent consultant, and Consultant
hereby accepts said engagement with the Company for the purpose of performing
the following services and duties as and when requested by the Company from time
to time during the term of this Agreement: (i) consultation and opinions as to
operational and procedural matters with respect to the executive management
services business in general and the Company's ongoing operation in particular;
(ii) opinions regarding long-term and strategic planning, and direction for the
Company; and (iii) financial management services.
(b) Consultant's services and duties shall be performed in a
competent and professional manner by one or more persons designated by
Consultant but approved by the Company in its sole discretion (a "Service
Provider"), but the Company shall not direct the Consultant in the manner in
which it performs its services or duties hereunder. Consultant shall render
written or oral reports concerning Consultant's activities and observations in
connection therewith, as and when requested by the Company from time to time.
The chief executive officer of the Company or such other person as the Company
may designate from time to time to Consultant, will have supervisory
responsibility for the Consultant's activities under this Agreement (the
"Project Coordinator"). All of Consultant's communications with the Company in
connection with its activities hereunder shall be through the Project
Coordinator, unless the Company otherwise directs Consultant in writing.
2. Term.
The term of this Agreement shall begin as of the date hereof,
and shall, unless earlier terminated as set forth herein, end on the fifth (5th)
anniversary thereof.
3. Compensation.
(a) Subject to the terms of this Agreement, in consideration
of Consultant's services, the Company shall pay Consultant so long as it shall
be engaged to provide services under this Agreement a base fee of Twenty Eight
Thousand Dollars ($28,000) per annum. Consultant's base fee shall be payable, in
arrears, to Consultant on the last day of each month.
(b) As an independent contractor and not an employee,
Consultant acknowledges, understands and agrees that the Company is not required
to withhold federal or state income taxes from any compensation paid
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Consultant hereunder, or to otherwise comply with any state or federal law
concerning the collection of income taxes at the source of payment of wages.
Consultant expressly releases the Company from any liability arising from its
failure to withhold such taxes, and Consultant shall indemnify and hold the
Company harmless from all liability it may incur as a result of any such
failure. Consultant assumes full responsibility for the payment of all federal,
state and local taxes with respect to Consultant's performance of this
Agreement.
4. Relationship and Authority.
(a) It is agreed between the parties hereto that the
Consultant is retained and engaged by the Company only for the purposes and to
the extent set forth in this Agreement, and during the period it renders
services hereunder, its relation to the Company shall be that of an independent
contractor in the performance of each and every part of this Agreement. Neither
the Consultant nor a Service Provider shall be considered by reason of any of
the provisions of this Agreement or otherwise as having "employee" status or as
being entitled to participate in any plan, arrangements, or distributions by the
Company pertaining to or in connection with any engagement benefits enjoyed by
the Company's regular employees.
(b) Consultant shall have no authority to bind the Company by
any promise or representations, whether written or oral, express or implied,
made by it. Consultant shall not have the right to make or enter into any
contracts or agreements of any nature whatsoever for or on behalf of the
Company, or any corporation of which the Company is the parent, affiliate, or
subsidiary.
(c) Consultant agrees to indemnify and hold the Company
harmless from and against any and all loss, cost and damage to the Company
arising out of or as a direct or indirect result of: (i) any representation or
promise made by Consultant, or anyone in his employ or control, in violation of
the provisions of Section 4(b), and (ii) any contract or agreement entered into
on behalf of the Company without the approval of the Company as provided in
Section 4(b).
(d) The Consultant further agrees to release, indemnify and
hold forever harmless the Company from any and all claims for damage to person
or property and for any and all liability of any other nature arising out of the
negligence or willful misconduct on the part of the Consultant in connection
with the performance of this Agreement.
5. Illness, Incapacity or Death During Engagement.
(a) Subject to Section 5(b) hereof, the engagement of
Consultant under this Agreement may be terminated immediately by the Company in
the event of the Service Provider's Disability (and in the absence of the
Company accepting a replacement Service Provider in the Company's sole
discretion) upon notice of termination served in accordance with Section 24
hereof, such Disability being specified in the notice. The term "Disability" as
used in this Agreement means the inability of the Service Provider to perform
the Consultant's duties under this Agreement in a manner consistent with what
was normally required as a result of Employee suffering from an illness or
physical or mental impairment.
(b) In the event that the Company delivers to Consultant a
notice of termination for Disability, which Disability the Company believes in
good faith will continue beyond the next following three (3) months, such notice
will be effective on the fifteenth (15th) day following delivery thereof unless
prior to the end of such fifteen (15) day period Consultant delivers to the
Company a written opinion of a competent medical doctor that such inability is
not expected to continue for the three-month period following delivery of such
notice. If such opinion is delivered, then the Company may obtain a second
medical opinion (and the Service Provider shall submit to a medical examination
in connection therewith upon request of the Company). If such second medical
opinion states that such inability is expected to so continue, then within
fifteen (15) days following delivery of such second medical opinion, the medical
doctors chosen by Consultant and by the Company shall choose a third medical
doctor who
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shall deliver to the Company a written opinion as to whether such inability is
expected to so continue, which opinion shall be final and conclusive, and shall
be effective on the fifteenth (15th) day following delivery thereof.
(c) In the event of a Service Provider's death, all
obligations of the Company under this Agreement shall terminate (in the absence
of the Company accepting a replacement Service Provider in the Company's sole
discretion) other than Consultant's rights with respect to the payment of that
portion of the base fee earned by Consultant to the date of such death.
6. Termination of Engagement.
(a) If during the term of this Agreement Company terminates
Consultant's engagement hereunder With Cause (as hereinafter defined) or
pursuant to Section 5, all obligations of Company to provide compensation and
benefits under this Agreement shall cease, and Consultant shall have no claim
against the Company for damages or otherwise by reason of such termination.
Company's election to terminate Consultant's engagement With Cause shall be
without prejudice to any remedy the Company may have against Consultant for the
breach or non-performance of any of the provisions of this Agreement.
(b) If during the term of this Agreement Company terminates
Consultant's engagement hereunder Without Cause (as hereinafter defined), then
Consultant will be entitled to continue to receive Consultant's base fee for
twenty-four (24) months after the date of termination; provided, however, that
post-engagement compensation shall cease to accrue and Consultant shall have no
further entitlement to the same from and after the earlier of (i) a Service
Provider's death, or (ii) the date Consultant or any of the Service Providers
breach any of the post-engagement covenants set forth in this Agreement.
(c) "With Cause" means the termination of engagement resulting
from:
(i) any act or omission which constitutes a material
breach by Consultant of its obligations under this Agreement,
which act or omission, if subject to cure, shall not be cured
within five (5) days after notice thereof is provided by
Company to the Consultant;
(ii) the commission by a Service Provider of a felony or
any crime involving moral turpitude, fraud or dishonesty;
(iii) the perpetration by Consultant or a Service Provider
of any material act of dishonest relating to the Company or
the Company's employees;
(iv) the use of illegal drugs by a Service Provider after
the date hereof, or drunkenness or substance abuse by a
Service Provider which results in the Consultant being unable
to perform its duties hereunder in a manner consistent with
the efficient and competent manner in which the parties hereto
contemplate that such duties will be performed;
(v) gross negligence on the part of Consultant in the
performance of its duties hereunder; or
(vi) the issuance of a final consent decree, cease and
desist or similar order against the Company or a Service
Provider by a regulatory agency relating to violations or
alleged violations of any federal or state law or regulation
governing the conduct of the business of the Company.
(d) "Without Cause" means the termination of engagement
resulting from any reason other than those enumerated in subsection (c) above or
Section 5 of this Agreement.
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7. Consultant's Obligations upon Termination of Engagement.
Upon the termination of its engagement hereunder for whatever
reason Consultant shall not represent itself still to be connected with the
Company or its subsidiaries or affiliates.
8. Effect of Termination.
The provisions of this Agreement shall survive the termination
of this Agreement and the termination of Consultant's engagement with the
Company to the extent required to give full effect to the covenants and
agreements contained herein.
9. Confidentiality.
(a) Consultant agrees that, both during the term of its
engagement and after the termination of its engagement for any reason,
Consultant will hold in a fiduciary capacity for the benefit of the Company, and
shall not directly or indirectly use or disclose, except as authorized by the
Company in connection with the performance of Consultant's duties, any
Confidential Information, as defined hereinafter, that Consultant may have or
acquire (whether or not developed or compiled by Consultant and whether or not
Consultant has been authorized to have access to such Confidential Information)
during the term of this Agreement. The term "Confidential Information" as used
in this Agreement shall mean and include any information, data and know-how
relating to the business of the Company that is disclosed to Consultant by the
Company or known by his as a result of his relationship with the Company and not
generally within the public domain (whether constituting a trade secret or not),
including without limitation, the following information:
(i) financial information, such as Company's earnings,
assets, debts, prices, fee structure, volumes of purchases or
sales or other financial data, whether relating to Company
generally, or to particular products, services, geographic
areas, or time periods;
(ii) supply and service information, such as information
concerning the goods and services utilized or purchased by the
Company, the names or addresses of suppliers, terms of supply
or service contracts, or of particular transactions, or
related information about potential suppliers, to the extent
that such information is not generally known to the public,
and to the extent that the combination of suppliers or use of
a particular supplier, though generally known or available,
yields advantages to Company the details of which are not
generally known;
(iii) marketing information, such as details about ongoing
or proposed marketing programs or agreements by or on behalf
of Company, marketing forecasts or results of marketing
efforts or information about impending transactions;
(iv) intellectual property information, such as formulas,
design details or parameters, software source code,
proprietary programs, devises, techniques and processes,
ongoing or planned activities in intellectual property
development, ongoing or planned joint venture activities, and
licensing terms or conditions;
(v) personnel information, such as Consultants' personal
or medical histories, compensation or other terms of
engagement, actual or proposed promotions, hiring,
resignations, disciplinary actions, terminations or reasons
therefor, training methods, performance, or other employee
information;
(vi) customer information, such as any compilation of
past, existing or prospective customers, customer proposals or
agreements between customers and Company, status of customer
accounts or credit, or related information about actual or
prospective customers; and
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(vii) information with respect to any customer affairs that
the Company agreed to treat as confidential.
The term "Confidential Information" does not include information that has become
generally available to the public by the act of one who has the right to
disclose such information without violating any right of the Company or the
client to which such information pertains.
(b) The covenant contained in this Section 9 shall survive the
termination of Consultant's engagement with the Company for any reason for a
period of two (2) years; provided, however, that with respect to those items of
Confidential Information which constitute trade secrets under applicable law,
Consultant's obligations of confidentiality and non-disclosure as set forth in
this Section 9 shall continue to survive after said two (2) year period to the
greatest extent permitted by applicable law. These rights of the Company are in
addition to those rights the Company has under the common law or applicable
statutes for the protection of trade secrets.
10. Non-Competition.
(a) Consultant expressly covenants and agrees that during the
term of its engagement hereunder and after termination of its engagement for any
reason, it will not, directly or indirectly, seek, obtain or accept a
"Competitive Position" in the "Restricted Territory" with a "Competitor" of the
Company (as such terms are hereafter defined). For purposes of this Agreement, a
"Competitor" of the Company means any business, individual, partnership, joint
venture, association, firm, corporation or other entity engaged in a business
that is substantially similar to or competitive with the Company's business of
owning and operating accredited, residential, post-secondary degree-granting
institutions in the following fields: business administration (bachelor's and
master's degrees), interior design, fashion design, commercial art, fashion
merchandising, and video production; a "Competitive Position" means any
engagement with any Competitor of the Company whereby Consultant will use or is
likely to use any Confidential Information (as that term is defined in Section
9), or whereby Consultant has duties for such Competitor that are the same as or
substantially similar to those actually performed by it pursuant to the terms
hereof; and the "Restricted Territory" means the following geographical area:
the States of California and Georgia. Consultant acknowledges and agrees that it
has been or will be working within the Restricted Territory as defined above or
has had or will have material contact with actual or prospective students,
alumni, student referral sources, student out-placement sources, educators,
vendors and other parties having business dealings with the Company located
within such areas. The parties agree to review the geographical area included
within the Restricted Territory from time to time at either party's request in
order that the Restricted Territory may be reformed so that its coverage upon
Consultant's termination will extend only to the geographical area in which the
Consultant is working at such time, including any area where actual or
prospective students, alumni, student referral sources, student out-placement
sources, educators, vendors and other parties having business dealings with the
Company are present. Any reformation to be evidenced only by written amendment
to this Agreement. Nothing contained in this Section 10 is intended to prevent
Consultant from investing in stock or other securities listed on a national
securities exchange or actively traded on the over the counter market of any
corporation engaged, wholly or partly, in the sale or custom engineered
products; provided, however, neither the Consultant nor the Service Provider or
the wife or children of the Service Provider shall, directly or indirectly, hold
more than a total of five percent (5%) of all issued and outstanding stock or
other securities of any such corporation.
(b) The covenant contained in this Section 10 shall survive
the termination of Consultant's engagement with the Company for any reason for a
period of eighteen (18) months; provided, however, that if the Consultant is
terminated Without Cause, the covenant contained in this Section 10 shall
survive until the earlier of (i) the eighteenth (18th) monthly anniversary of
the date of termination of the Consultant's engagement, or (ii) the date
scheduled for the final payment of post-engagement compensation owing under
Section 6(b) (without regard to any premature termination of the post-engagement
compensation resulting from Consultant's breach of any post-engagement
covenants).
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11. Non-Solicitation of Employees.
Consultant agrees that it will, for so long as it is engaged
hereunder and for a period of twenty four (24) months after termination of its
engagement, refrain from recruiting or hiring, or attempting to recruit or hire,
directly or by assisting others, any other employee of the Company who is
employed by the Company or any successor or affiliate of the Company.
12. Tolling of Period of Restraint.
Consultant hereby expressly acknowledges and agrees that in
the event the enforceability of any of the terms of this Agreement shall be
challenged in court or pursuant to arbitration and Consultant is not enjoined
from breaching any of the restraints set forth in Sections 9 through 11, then if
a court of competent jurisdiction or arbitration panel finds that the challenged
restraint is enforceable, the time period of the restraint shall be deemed
tolled upon the filing of the lawsuit challenging the enforceability of the
restraint until the dispute is finally resolved and all periods of appeal have
expired.
13. Acknowledgments.
Consultant hereby acknowledges and agrees that the
restrictions contained in Sections 9 through 12 are fair and reasonable and
necessary for the protection of the legitimate business interests of the
Company. Consultant hereby further acknowledges and agrees that it will
contractually require each Service Provider to adhere to the covenants and
promises contained in Sections 9, 10, 11, 14, 15, 16 and 26, that the Company
will be a third party beneficiary with respect to all of such contractual
obligations and shall be entitled to enforce the same against the Service
Provider to the same extent as the Consultant, and that any breach of any of the
foregoing covenants and promises by a Service Provider shall be deemed a breach
by the Consultant, and that the Consultant will indemnify and hold the Company
harmless from and against any loss, liability, cost or expense (including
reasonable attorneys' fees) incurred as a consequence of any of such breach.
14. Rights to Materials.
All records, files, memoranda, reports, price lists, student
lists, lists of student out placement sources, drawings, plans, sketches,
documents and the like (together with all copies thereof) relating to the
business of the Company, which Consultant shall use or prepare or come in
contact with in the course of, or as a result of, its engagement shall, as
between the parties hereto, remain the sole property of the Company. Upon the
termination of its engagement or upon the prior demand of the Company,
Consultant shall immediately return all such materials and shall not thereafter
cause removal thereof from the premises of the Company.
15. Works Made for Hire.
The Company and Consultant acknowledge that in the course of
Consultant's engagement by the Company, Consultant may from time to time create
for the Company copyrightable works. Such works may consist of manuals,
pamphlets, instructional materials, computer programs, films, tapes or other
copyrightable material, or portions thereof, and may be created within or
without the Company's facilities and before, during or after normal business
hours. All such works related to or useful in the business of the Company are
specifically intended to be works made for hire and shall be the property of the
Company, and Consultant shall cooperate with the Company in the protection of
the Company's copyrights therein and, to the extent deemed desirable by the
Company, the registration of such copyrights.
16. Discoveries.
Consultant agrees that any inventions, discoveries or
improvements that Consultant may develop or conceive during the course of
Consultant's engagement shall be the sole property of the Company. Consultant
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agrees to promptly disclose to the Company in writing all such inventions,
discoveries and improvements, whether directly or indirectly related to the
business of the Company or whether made solely by the Consultant or in
conjunction with others. At the Company's request and expense, both during and
after Consultant's engagement, Consultant will promptly execute a specific
assignment of title to the Company (or any specified member thereof) of each
invention, discovery or improvement described in the preceding paragraph, and
perform all other acts reasonably necessary to enable the Company to secure a
patent therefor in the United States and in foreign countries and to maintain,
defend and assert such patents. This obligation shall survive the termination or
expiration of this Agreement.
17. Severability
Except as noted below, should any provision of this Agreement
be declared or determined by any court of competent jurisdiction to be
unenforceable or invalid for any reason, the validity of the remaining parts,
terms or provisions of this Agreement shall not be affected thereby and the
invalid or unenforceable part, term or provision shall be deemed not to be a
part of this Agreement. The covenants set forth in this Agreement are to be
reformed pursuant to Section 18 if held to be unreasonable or enforceable, in
whole or in part, and, as written and as reformed, shall be deemed to be part of
this Agreement.
18. Reformation.
If any of the covenants or promises of this Agreement are
determined by any court of law or equity, with jurisdiction over this matter, to
be unreasonable or unenforceable, in whole or in part, as written, Consultant
hereby consents to and affirmatively requests that said court reform the
covenant or promise so as to be reasonable and enforceable and that said court
enforce the covenant or promise as so reformed.
19. Injunctive Relief.
Consultant understands, acknowledges and agrees that in the
event of a breach or threatened breach of any of the covenants and promises
contained in Sections 9, 10, 11, 14, 15 and 16 the Company will suffer
irreparable injury for which there is no adequate remedy at law and the Company
will therefore be entitled to injunctive relief enjoining said breach or
threatened breach. Consultant further acknowledges, however, that the Company
shall have the right to seek a remedy at law as well as or in lieu of equitable
relief in the event of any such breach.
20. Assignment.
The terms and provisions of this Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and assigns. The term "Company" as used in this Agreement shall be
deemed to include the successors and assigns of the original or any subsequent
entity constituting the Company as well as any and all divisions, subsidiaries,
or affiliates thereof.
21. Waiver.
The waiver by any party to this Agreement of a breach of any
of the provisions of this Agreement shall not operate or be construed as a
waiver of any subsequent or simultaneous breach.
22. Applicable Law and Mutual Submissions.
This Agreement has been entered into in and shall be governed
by and construed under the laws of the State of Georgia.
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23. Headings and Captions.
The headings and captions used in this Agreement are for
convenience of reference only, and shall in no way define, limit, expand or
otherwise affect the meaning or construction of any provision of this Agreement.
24. Notice.
Any notice required or permitted to be given pursuant to this
Agreement shall be deemed sufficiently given when delivered in person or when
deposited in the United States mail, first class postage prepaid.
25. Gender.
All pronouns or any variations thereof contained in this
Agreement refer to the masculine, feminine or neuter, singular or plural, as the
identity of the person or persons may require.
26. Right to Arbitration.
Any controversy or claim arising out of or relating to
Consultant's engagement by the Company, or the termination thereof, or this
Agreement, or the breach thereof (including, without limitation, any claim that
any provision of this Agreement or any obligation of Consultant is illegal or
otherwise unenforceable or voidable under law, ordinance or ruling or that
Consultant's engagement by the Company was illegally terminated) shall be
settled by arbitration at the office of the American Arbitration Association in
Atlanta, Georgia, in accordance with the United States Arbitration Act (9 USC,
Section 1 et seq.) and the rules of the American Arbitration Association.
Company and Consultant each consents and submits to the personal jurisdiction
and venue of the trial courts of Xxxxxx County, Georgia, and also to the
personal jurisdiction and venue of the United States District Court for the
Northern District of Georgia for purposes of enforcing this provision. All
awards of the arbitration shall be binding and non-appealable except as
otherwise provided in the United States Arbitration Act. Judgment upon the award
of the arbitrator may be entered in any court having jurisdiction thereof. The
arbitration shall take place at a time noticed by the American Arbitration
Association regardless of whether one of the parties fails or refuses to
participate. The arbitrator shall have no authority to award punitive damages,
but will otherwise have the authority to award any remedy or relief that a court
of competent jurisdiction could order or grant, including, without limitation,
specific performance of any obligation created under this Agreement, the
issuance of an injunction or other provisional relief, or the imposition of
sanctions for abuse or frustration of the arbitration process. The parties shall
be entitled to engage in reasonable discovery, including a request for the
production of relevant documents. Depositions may be ordered by the arbitrator
upon a showing of need. The foregoing provision shall not preclude the Company
from bringing an action in any court of competent jurisdiction for injunctive
relief or a temporary restraining order as the Company may determine is
necessary or appropriate.
/s/ SB
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Company's Initials
/s/ PJM
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Consultant's
Initials
27. Entire Agreement.
This Agreement constitutes the entire agreement between the
Company and Consultant with respect to the subject matter of this Agreement and
supersedes any prior agreements or understandings between the Company and
Consultant with respect to such subject matter. No amendment or waiver of this
Agreement or any provision hereof shall be effective unless in writing signed by
both of the parties.
[SIGNATURES BEGIN ON NEXT PAGE]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed, under seal, as of the day and year first above written.
"COMPANY"
AMERICAN-EUROPEAN CORPORATION
Attest: /s/ Xxxx Xxxxx By: /s/ X. Xxxxxx
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Title: Secretary Title: Chairman
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[CORPORATE SEAL]
"CONSULTANT"
THE XXXXXXX X. XXXXXXX CONSULTING GROUP,
INC.
Attest: By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------- -------------------------------------
Title: Title: President
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[CORPORATE SEAL]
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