Exhibit 10.3
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (the "Agreement"), dated this 20th day of
June 2005 (the "Effective Date"), by and between REFAC, a Delaware corporation
(the "Corporation") having its principal offices at Xxx Xxxxxx Xxxxx, Xxxx
Xxx, Xxx Xxxxxx 00000, and XXXX LIMITED, INC. a Florida corporation (the
"Consultant") having its principal address at 000 Xxxxxxxxx Xxx, Xxxx Xxxxx,
Xxxxxxx 00000.
WHEREAS, the Corporation is engaged in acquisition discussions with
two affiliated companies, U.S. Vision, Inc., which operates 518 retail optical
locations in 47 states and Canada, consisting of 506 licensed departments and
12 freestanding stores, and OptiCare Health Systems, Inc., which operates 18
retail optical centers in the State of Connecticut and is a managed vision
care provider in the United States (hereinafter such businesses are
collectively referred to as the "Business"); and
WHEREAS, the Consultant has extensive experience in the operation of
retail optical departments in host stores, freestanding retail optical stores
and managed vision care plans; and
WHEREAS, the Corporation wishes to retain the Consultant on the terms
and conditions set forth herein and the Consultant is willing to undertake and
perform the obligations herein set forth, subject to such terms and
conditions:
NOW, THEREFORE, in consideration of the promises, covenants and
agreements set forth herein, the parties agree as follows:
1. Engagement of Consultant; Duties and Representations.
(a) The Corporation hereby engages the Consultant, and the Consultant
agrees to be engaged, as a consultant on the terms and conditions set forth
below.
(b) The Consultant agrees that it will assist in the development of
the Corporation's strategic plan; identify and assist on acquisition
opportunities; recommend corporate and division organizational structures;
assist in equity/debt financing activities; advise on retail operations, host
store relationships and purchasing; assess and recruit management; and
consult, as requested, on all other aspects of the Business in which the
Consultant has experience or expertise. All such services shall be exclusively
rendered by Xxxxxxx X. Xxxx ("Xxxx"), the Consultant's Chief Executive Officer
and sole stockholder, subject to the direction and control of the
Corporation's Chief Executive Officer and Board of Directors.
(c) The Consultant represents and warrants that (i) it has the
requisite corporate power and authority to enter into and perform its
obligations under this Agreement, (ii) upon execution and delivery, this
Agreement, shall constitute the valid and binding obligation of the Consultant
enforceable against it in accordance with its terms, except as such
enforceability may be limited by general principles of equity or applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation or similar
laws relating to, or affecting generally, the enforcement of creditors'
rights, (iii) the execution, delivery and performance by the Consultant and
its agents of this Agreement and the performance of obligations hereunder will
not conflict with, constitute a default under or give to others any rights of
termination, cancellation or amendment or acceleration of, any material
agreement, indenture or instrument to which the Consultant or its agents is a
party and (iv) the Consultant and its agents are not subject to any agreement,
covenant or legal restraint which precludes or otherwise restricts the
Consultant's ability to enter into this Agreement and perform the services
contemplated hereby.
2. Time. The Consultant will devote such time as is reasonably
necessary to perform the services contemplated hereby in a professional and
effective manner, provided however, that in no event shall it be required to
devote more than an average of five (5) days per calendar month during the
term of this Agreement. The Corporation and Consultant agree that they will
work together and use their best efforts to schedule full business days for
Consultant's services hereunder. The Consultant may perform services hereunder
in such manner (whether in person, by conference, telephone, letter, e-mail or
otherwise) and at such times and places as Consultant and the Corporation may
jointly determine.
3. Term.
(a) Except as otherwise provided in subparagraphs (b) and (c) below,
the term of this Agreement and Consultant's engagement hereunder shall
commence as of June 1, 2005 and shall terminate on May 31, 2006.
(b) The Corporation shall have the right to terminate this Agreement
at any time upon fifteen (15) days prior written notice should any person,
firm, corporation or other entity allege that this Agreement and/or the
performance of the services provided for herein by Consultant and/or Xxxx
violates a contract to which such person, firm, corporation or other entity is
a party.
(c) This Agreement shall automatically terminate if, in the
reasonable judgment of the Corporation, Xxxx fails to substantially perform
all of the services required of Consultant hereunder or the Consultant
otherwise breaches this Agreement in any material respect.
4. Compensation.
(a) Cash Compensation. As compensation for the Consultant's services
hereunder, the Consultant shall receive a fee of $8333.33 for each month of
service hereunder payable on the first day of each calendar month during the
term hereof.
(b) Stock Option. Simultaneously with the signing of this Agreement,
the Corporation shall grant Consultant an option (the "Option") to purchase an
aggregate of 50,000 shares of the Corporation's Common Stock. The Option shall
become exercisable as follows:
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Number of Exercise
Date Exercisable Shares Price Period of Exercisability
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Effective Date 16,667 $4.92 From the date such option becomes
exercisable through June 30, 2010
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October 1, 2005 16,666 $4.92 From the date such option becomes
exercisable through June 30, 2010
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February 1, 2006 16,666 $4.92 From the date such option becomes
exercisable through June 30, 2010
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The Option shall be evidenced by a written option agreement in the
form annexed hereto as Exhibit "A".
5. Expense Reimbursement. Consultant shall be responsible for all of
its normal operating expenses. Except for such expenses, the Corporation will
promptly reimburse the Consultant for any and all reasonable out-of-pocket
expenses incurred by it in rendering the services provided for herein
including, but not limited to, all reasonable travel expenses, provided that
such expenses are incurred and accounted upon presentation of expense vouchers
or other documentation in such detail as the Corporation may from time to time
reasonably require. Notwithstanding the foregoing, no documentation shall be
required for expenses less than $50.
6. Effect of Termination.
(a) Termination pursuant to Sections 3 (b) or (c) hereof. In the
event that this Agreement is terminated pursuant to Sections 3 (b) or (c)
hereof, the Corporation shall pay Consultant (i) any accrued cash compensation
due to Consultant pursuant to Section 4 (a) through the date of termination
and (ii) any and all expenses then due and owing the Consultant. Thereafter,
no further payments shall be due and owing to Consultant.
(b) Other Termination by the Corporation. In the event that the
Corporation terminates this Agreement for any reason (other than as provided
for in Section 3 (b) or (c) hereof), it will pay Consultant (i) a lump sum
equal to the sum of (i) its monthly retainer payments that would have been
payable for the remainder of the term and (ii) any and all expenses then
payable to the Consultant pursuant to Section 5 hereof.
7. Non-Competition.
(a) The Consultant recognizes that the services to be performed by it
hereunder are special, unique and extraordinary and that, by reason of its
engagement hereunder, the Consultant will acquire confidential information and
trade secrets concerning the operation of the Corporation and the Business.
For all purposes hereunder or in respect hereof, the Consultant agrees that
during any period in which the Consultant is receiving or has received any
compensation provided for herein, the Consultant and its agents will not,
directly or indirectly, as an officer, director, stockholder, partner,
associate, employee, consultant, owner, agent, creditor, co-venturer or
otherwise, become or be interested in or be associated with any other
corporation, firm or business engaged in a Competitive Business in any
geographical area in North America in which the Corporation or its affiliates
or subsidiaries are engaged at the termination of this Agreement. A
"Competitive Business" shall mean any business (i) which sells, at retail,
optical products or services (other than vision aid products or services for
visually impaired persons) , (ii) which manages an optical laboratory or (iii)
which is a provider of managed vision care. The ownership by the Consultant
and its agents, directly or indirectly, of not more than three percent (3%) of
the issued and outstanding stock of any corporation, the shares of which are
regularly traded on a national securities exchange or in the over-the-counter
market shall not in any event be deemed to be a violation of the provisions of
this Section 7 nor shall any services rendered by the Consultant or Xxxx to or
on behalf of HAL International N.V., Pearle Europe, B.V., GrandVision Group or
any of their affiliated entities (hereinafter collectively referred to as
"HAL"). However, Consultant shall advise the Corporation as soon as possible
if any such services conflicts, or is likely to conflict, with the
Corporation's business or any opportunities that it is pursuing, or is likely
to pursue, in the foreseeable future.
(b) The Consultant agrees, during the term of this agreement and for
a period of two (2) years thereafter, that it shall not, on behalf of itself
or any business it is interested in or associated with, employ or otherwise
engage, or seek to employ or engage, any individual employed by the
Corporation or its affiliates or subsidiaries at any time during the preceding
twelve (12) months, or solicit any optical related business from any person or
entity with whom the Corporation or its affiliates or subsidiaries were doing
business at any time during the engagement hereunder, including without
limitation any lessor from which the Corporation or its affiliates or
subsidiaries leased a department or departments. Notwithstanding the
foregoing, the restriction of this subparagraph (b) shall not apply to any
suppliers with which the Consultant or Xxxx had a relationship prior to the
date of this Agreement.
(c) The Corporation shall be entitled, in addition to any other right
and remedy it may have, at law or in equity, to an injunction, without the
posting of any bond or other security, enjoining or restraining the Consultant
from any violation or threatened violation of this Section 7, and the
Consultant hereby consents to the issuance of such injunction. If any of the
restrictions contained herein shall be deemed to be unenforceable by reason of
the extent, duration or geographical scope thereof, or otherwise, then the
court making such determination shall have the right to reduce such extent,
duration, geographical scope, or other provisions hereof, and in its reduced
form this Section 7 shall be enforceable in the manner contemplated hereby.
8. Confidentiality. (a) The Consultant shall not divulge to anyone,
either during or at any time after the termination of its engagement, any
information (whether oral or written) furnished by the Corporation or its
directors, officers, employees, affiliates, representatives or agents (the
"Representatives") to the Consultant or its Representatives (the "Confidential
Information"), except in the performance of its duties hereunder, without the
prior written consent of the Corporation. The term Confidential Information
will not, however, include information which (i) is or becomes publicly
available other than as a result of a disclosure by the Consultant or its
Representatives, (ii) is or becomes available to the Consultant on a
non-confidential basis from a source (other than the Corporation or its
Representatives) which, to the best of Consultant's knowledge after due
inquiry, is not prohibited from disclosing such information to Consultant by a
legal, contractual or fiduciary obligation to the Corporation or (iii) was
known by the Consultant or Xxxx prior to the Effective Date.
(b) In the event that the Consultant or any of its Representatives is
required pursuant to applicable law, regulation or legal process to disclose
any of the Confidential Information, such person shall notify the Corporation
promptly so that the Corporation may seek a protective order or other
appropriate remedy or, in its sole discretion, waive compliance with the terms
of this Agreement.
(c) The Consultant acknowledges that such information is of great
value to the Corporation, and upon the termination of its engagement, the
Consultant shall forthwith deliver up to the Corporation all copies of any
materials in its possession or control (or in the possession or control of
Xxxx) containing any Confidential Information. The Corporation shall be
entitled, in addition to any other right and remedy it may have, at law or in
equity, to an injunction, without the posting of any bond or other security,
enjoining or restraining the Consultant from any violation or threatened
violation of this Section 8, and the Consultant hereby consents to the
issuance of such injunction.
9. Severability. If any provision of this Agreement shall be held to
be invalid or unenforceable, such invalidity or unenforceability shall attach
only to such provision and shall not affect or render invalid or unenforceable
any other provision of this Agreement and this Agreement shall be construed as
if such provision had been drawn so as not to be invalid or unenforceable.
10. Entire Agreement, Etc. This Agreement sets forth the parties'
final and entire agreement, and supersedes any and all prior understandings
with respect to its subject matter. This Agreement shall bind and benefit the
parties hereto and their respective heirs, successors and assigns, except as
otherwise set forth herein. This Agreement is personal in nature and none of
the Consultant's obligations under this Agreement may be assigned or delegated
by the Consultant. Notwithstanding the foregoing, Consultant may freely assign
this Agreement to Xxxx provided that he expressly agrees to personally
undertake and perform all of Consultant's obligations hereunder. This
Agreement shall be assignable by the Corporation to any other person in
connection with the sale, transfer or other disposition of all or
substantially all of its business and assets; and this Agreement shall inure
to and be binding upon any successor to all or substantially all of the
business, or to all or substantially all of the assets, of the Corporation,
whether by merger, consolidation, purchase of stock or assets or otherwise.
This Agreement cannot be changed, waived or terminated except by a writing
signed by both the Consultant and the Corporation and shall be governed by,
and construed in accordance with, the laws of the State of New York applicable
to contracts made and performed entirely within such state without giving
effect to any choice of law provisions thereof.
11. Independent Contractor. The parties agree that the Corporation
shall not have the right to control or direct the details, manner or means by
which the Consultant accomplishes the results of the services performed
hereunder, it being acknowledged that the Consultant shall for all purposes be
an independent contractor of the Corporation.
12. Counterparts. This Agreement may be executed in two (2)
counterparts, each of which shall constitute an original, and both of which
together shall constitute one and the same instrument. In the event that any
signature is delivered via e-mail or facsimile transmission, such signature
shall create a valid and binding obligation of the party executing (or on
whose behalf such signature is executed) the same with the same force and
effect as if such digital or facsimile signature page were an original hereof.
13. Notices. All notices, requests, consents and other communications
hereunder shall be in writing, shall be mailed by first-class registered or
certified airmail, confirmed facsimile or nationally recognized overnight
express courier postage prepaid, and shall be addressed as follows:
If to the Consultant, to:
Xxxx Limited, Inc.
0000 Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxx, President
Facsimile: (000) 000-0000
- with a copy to -
Xxxxxxx X. Xxxx
000 Xxxxxxxxx Xxx
Xxxx Xxxxx, XX 00000
Facsimile: (000) 000-0000
If to the Corporation, to:
REFAC
Xxx Xxxxxx Xxxxx
Xxxx Xxx, XX 00000
Attention: President
Facsimile: (000) 000-0000
- with a copy to -
Xxxxxxx X. Xxxxxx, Esq.
Skadden, Arps, Meagher, Slate & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Such notices or other communications shall be deemed delivered upon
receipt, in the case of overnight delivery, personal delivery, facsimile
transmission (as evidenced by the confirmation thereof), or mail.
14. Captions. The descriptive headings of the several sections of
this Agreement are inserted for convenience only and do not constitute a part
of this Agreement.
[END OF PAGE]
IN WITNESS WHEREOF, the parties hereto have set their hands as of the
date first written above.
REFAC
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
Title: Chief Executive Officer
XXXX LIMITED, INC.
By: /s/ Xxxxxxx X. Xxxx
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Name: Xxxxxxx X. Xxxx
Title: Chief Executive Officer
As a material inducement for Refac to enter into the within
agreement, the undersigned does hereby agree to be personally bound by Section
7 (Non-Competition) and Section 8 (Confidentiality) thereof to the same
extent, and with the same force and effect, as Consultant.
/s/ Xxxxxxx X. Xxxx
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Xxxxxxx X. Xxxx
