EXHIBIT 10.3
CONSULTING AGREEMENT
This Consulting Agreement ("Consulting Agreement" or "Agreement") is entered
into on June 16, 2003 between AMERICAN UNITED GLOBAL, INC., a Delaware
corporation (the "Company"), and Doctors Choice, Inc., a Delaware corporation
(the "Consultant").
WHEREAS, the Company desires to obtain the benefit of the Consultant's knowledge
and experience by retaining the Consultant, and the Consultant desires to accept
such position, for the term and upon the other conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual promises and agreements contained
herein, the adequacy and sufficiency of which are hereby acknowledged, the
Company and the Consultant hereby agree as follows:
1. EFFECTIVE DATE AND CONSULTING TERM: This Agreement shall be effective on the
date first written above (the "Effective Date"). The Consultant shall commence
rendering his consulting services hereunder on June 1, 2003 and shall continue
to render such services for a two (2) year term expiring on May 31, 2005 (the
"Term"), unless the Term shall be earlier terminated in accordance with Section
7 or 8 below. Each twelve month period during the Term that commences on May 1st
and ends on April 30th of the following year shall be referred to herein as a
"Year".
2. POSITION AND DUTIES: During the Term, the Consultant shall, at the request of
the Company's Chairman of the Board, Chief Executive Officer or Board of
Directors, render consulting services to NEW YORK MEDICAL, INC., a New York
corporation ("NYMI") and an indirect subsidiary of the Company, relating to
strategic planning, product development and general business matters.
3. LOCATION: The Consultant's consulting services shall be rendered at the
principal executive offices of NYMI or at any other mutually agreeable location.
NYMI shall provide the Consultant with office space, secretarial or other
support services in connection with his rendering of consulting services
hereunder.
4. COMPENSATION: The Consultant shall be compensated by the Company as follows:
a. Consulting Fees: During the Term, the Consultant will be paid the
sum of Two Hundred and Forty Thousand Hundred Thousand ($240,000) Dollars
as a consulting fee, payable in monthly installments at the rate of $10,000
each (the "Base Fee. In addition to the Base Fee, the Consultant shall be
entitled to receive a success fee (the "Bonus Fee") equal to 3% of any
increase in annual net sales of NYMI for each Year during the Term in
excess of Twenty Million ($20,000,000) Dollars (the "Sales Base"), to the
extent that such increase in annual net sales of NYMI over the Sales Base
shall be directly or indirectly attributable to the efforts of Consultant
and/or its principal, Xxxxxxx Xxx ("Xxx"). Notwithstanding the foregoing,
the Bonus Fee payable for any Year during the Term of this Consulting
Agreement shall be capped at $150,000, irrespective of such annual net
sales in excess of the Sales Base attributable to the efforts of Xxxxxxx
Xxx in such Year. During the Term, the Consultant's Base Fee shall be
payable monthly in equal installments of $10,000 each. Any Bonus Fee shall
be payable by the Company, not later than 30 days after the end of each
Year during the Term of this Consulting Agreement.
b. Expenses: During the Term, the Company shall reimburse the
Consultant for all business expenses reasonably incurred by the Consultant
in the performance of its consulting services hereunder as requested by the
Company's Chairman of the Board, Chief Executive Officer or Board of
Directors, upon submission to the Company of appropriate documentation in
respect of such expenses and approval by the Chief Executive Officer, which
shall not be unreasonably withheld.
c. Benefits: During the Term, the Consultant shall not be entitled to
any employee benefits (e.g., sick leave, severance or 401(k) participation)
from the Company. However, the Company will reimburse Consultant One
Thousand Two Hundred and Fifty ($1,250.00) Dollars per month for health
insurance provided to Xxx.
5. INDEPENDENT CONTRACTOR: During the Term, the Consultant shall be an
independent contractor and not an employee of the Company or NYMI and may render
similar services to other clients provided said services do not conflict with
the Company's business interests. Accordingly, the Consultant shall be
responsible for payment of all taxes for remuneration received under this
Agreement, including Federal and State income tax, Social Security tax,
Unemployment Insurance tax, and any other taxes or business license fees as
required.
6. THIS SECTION HAS BEEN INTENTIONALLY DELETED.
7. VOLUNTARY TERMINATION: The Consultant may voluntarily terminate its
consultancy for any reason upon providing the Company with 30 days' prior
written notice. In the event Consultant voluntarily terminates its consultancy
with the Company, the Consultant shall be entitled to no compensation from the
Company other than in respect of (x) any monthly installment of consulting fees
earned but not yet paid as of the effective date of his termination and (y) the
reimbursement of his expenses in accordance with Section 4(b).
8. TERMINATION BY THE COMPANY: The Consultant's consultancy may be terminated by
the Company in the event of the death or disability of Xxxxxxx X. Xxx or for
cause (as defined below). Upon any termination under this Section 8, the
Consultant shall be entitled to no compensation from the Company other than in
respect of (x) any monthly installment of consulting fees earned but not yet
paid as of the effective date of his termination and (y) the reimbursement of
Consultant's expenses in accordance with Section 4(b) above. For purposes of
this Agreement, "disability" means Xxx'x inability to perform services on behalf
of the Consultant for any consecutive 120-day period as a result of a physical
and/or mental impairment.
For purposes of this Consulting Agreement, the term "for cause" means a
termination of the Consultant's consultancy by the Company for any of the
following reasons: (i) the Consultant's willful and continued refusal to perform
any duty reasonably assigned to him in accordance with the provisions of this
Agreement; (ii) any breach of this Agreement by the Consultant, which if
curable, is not cured within 10 days following written notice from the Company
to the Consultant of such breach; (iii) the Company's inability to have
consummated one or more financings by October 17, 2003 in amounts sufficient to
enable the Company to satisfy in full the "Payment Events" (as that term is
defined in that certain Closing Agreement, dated of even date herewith, by and
among the Company, Redwood Investments Associates, L.P., Lifetime Healthcare
Services, Inc., Xx. Xxxxxxxx Xxxxxx, Xxxxx Xxxxxx, the Xxxxx Irrevocable Stock
Trust and Xxxxxx X. Xxxxx (the "Closing Agreement"), (iv) the Consultant's or
Xxx'x conviction (including any plea of guilty or nolo contendere) for any
criminal act which impairs the Consultant's or Xxx'x ability to perform its
duties under this Agreement; or (v) Xxxxxxx Xxx becoming an officer, director,
employee or agent of any corporation, person, firm or entity, which in the
reasonable determination of a majority of the full membership of the Company's
Board of Directors results in, or is likely to result in, a conflict of interest
with the Consultant's position as a Consultant to the Company.
9. NON-SOLICITATION: During the period from the Effective Date through the end
of the Term and for a twelve month period thereafter, the Consultant will not,
directly or indirectly, recruit, induce or otherwise attempt to persuade any
person who is now, or who subsequently becomes an employee, sales representative
or consultant of the Company to terminate his, her or its relationship with the
Company.
10. CONFIDENTIALITY: The Consultant shall not, commencing on the Effective Date
and at all times thereafter, directly or indirectly communicate or divulge to,
or use for the Consultant's own benefit or for the benefit of any other person,
or entity, any of the trade secrets, proprietary data and confidential
information of the Company, NYMI or any other direct or indirect subsidiary of
the Company (including, without limitation, nonpublic information pertaining to
or derived from (i) meetings or deliberations of the Company's or NYMI's Board
of Directors (or any committee thereof) and (ii) discussions with any officer or
employee or former officer or employee of the Company or any of its direct or
indirect subsidiaries, member or former member of the Board of Directors of the
Company or any of its direct or indirect subsidiaries, or any current of former
agent or attorney of the Company or any of its direct or indirect subsidiaries,
communicated to or otherwise learned or acquired by the Consultant in the course
of his service hereunder or in the course of his service hereunder.
11. DISPUTE RESOLUTION:
In the event of any dispute or claim relating to or arising out of the
interpretation or application of this Agreement, such dispute or claim shall be
fully, finally and exclusively resolved by binding arbitration conducted by the
American Arbitration Association in Manhattan, New York. The Consultant and the
Company hereby knowingly and willingly waive their respective rights to have any
such disputes or claims tried by a judge or jury. Notwithstanding the foregoing,
this arbitration provision shall not apply to any disputes or claims relating to
or arising out of (i) the actual or alleged misuse or misappropriation of the
Company's property, including, but not limited to, its trade secrets or
proprietary information or (ii) the Consultant's actual or alleged breach of
Sections 9 and 10 above.
12. SEVERABILITY: The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision hereof, which shall remain in full force and effect.
13. ASSIGNMENT: This Agreement may not be assigned by either party hereto
without the prior written consent of the other party, except that the Company
may assign this Agreement to a corporation succeeding to substantially all the
assets or business of the Company whether by merger, consolidation, acquisition,
or otherwise.
14. ENTIRE AGREEMENT: This Agreement constitutes the entire agreement between
Consultant and the Company regarding the terms and conditions hereof, and
supersedes all prior negotiations, representations or agreements between
Consultant and the Company regarding the Consultant's consultancy, whether
written or oral, including, without limitation that certain Marketing Agreement,
dated March 27, 2003 between Lifetime and the Consultant (designated therein as
the "Marketer").
15. MODIFICATION: This Agreement may only be modified or amended by a
supplemental written agreement signed by Consultant and an authorized officer of
the Company.
16. INTERPRETATION: This Agreement and the provisions contained in it shall not
be construed or interpreted for or against any party to this Agreement because
that party drafted or caused that party's legal representative to draft any of
its provisions.
17. GOVERNING LAW: This Agreement shall be interpreted in accordance with and
governed by the laws of the State of New York without reference to the conflict
of laws principles thereof or of any other jurisdiction.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
first written above.
AMERICAN UNITED GLOBAL, INC.
By: /s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx, President
DOCTORS CHOICE, INC.
By: /s/ Xxxxxxx Xxx
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Xxxxxxx Xxx, President
