CONSULTING AGREEMENT
This Consulting Agreement, dated as of August 1, 1996 is between Emerson
Radio Corp., a Delaware corporation ("Company"), and Starr Securities, Inc., a
New York corporation ("Consultant").
WITNESSETH:
WHEREAS, Company desires to contract with Consultant for certain
consulting services, and Consultant is willing to render such services as
hereinafter more fully set forth;
NOW, THEREFORE, in consideration of the mutual agreements and covenants
set forth in this Agreement, the parties hereto hereby agree as follows:
1. ENGAGEMENT OF CONSULTANT. Company hereby engages and retains
Consultant to render to Company the consulting services described in Section 2
hereof (the "Consulting Services") for the period commencing on the date hereof
and ending on the first anniversary hereof (the "Consulting Period").
Consultant represents and warrants that it is a corporation incorporated and
organized under the laws of the State of New York, is qualified to do business
in all jurisdictions where required and is in good standing in its state of
incorporation and all other jurisdictions in which it is required to
qualify to do business and has full corporate power and authority to enter into
this Agreement and to comply with its obligations hereunder. Consultant also
represents and warrants that it is duly licensed by and is a member in good
standing with the National Association of Securities Dealers, Inc., and is duly
licensed as a broker or dealer in all states in which it will conduct business
under this Agreementis required to be so licensed.
2. DESCRIPTION OF CONSULTING SERVICES. The Consulting Services rendered
by Consultant hereunder will consist of consultations with management of Company
as such management may from time to time require during the term of this
Agreement. Such consultation will be with respect to the operation and
financing of Company's business, Company's relations with its securities holders
and such other matters as may be agreed upon between Company and Consultant. In
addition to such consultation, Company may request that Consultant attend
meetings of Company's Board of Directors, or review, analyze, and report on
proposed investment policies and/or public and private financing. Consultant
acknowledges and agrees that its employees or consultants may be required to
travel out of the New York City metropolitan area but only if Company has given
Consultant oral or written notice to do so a reasonable time prior to such
required travel.
3. COMPENSATION FOR SERVICES RENDERED. As compensation for the Consulting
Services provided for herein, Company agrees to pay to Consultant the sum of
$5,000 per month for the term of this Agreement and to deliver to Consultant
and/or employees of or consultants of to Consultant (hereinafter,
collectively "Consultant") designated by Consultant upon execution and delivery
of this Agreement, a stock warrant agreement or agreements ("Warrants")
substantially in the form attached hereto as Exhibit A. Such Warrant(s) will
grant to Consultant or its permitted designees the right to purchase an
aggregate of 250,000 shares of Company's Common Stock at a price of $4.00 per
share during a period of five years after the date hereof. The Warrants will
vest and be exercisable, pro rata to Consultant and its permitted designees, if
any, on the basis of the number of shares of Common Stock subject to the
Warrants when originally granted to Consultant and such designees, for the
following aggregate amount of shares in accordance with the following schedule:
(i) the Warrants will vest and may be exercised after six months from the date
hereof to purchase 125,000 shares and (ii) the Warrants will vest and may be
exercised after the first anniversary of this Agreement to purchase an
additional 125,000 shares. Company also agrees to reimburse Consultant for its
reasonable expenses in complying with its obligations under this Agreement, but
subject to the prior written approval of Company in accordance with its
customary practices and procedures.
4. NONEXCLUSIVITY OF THIS AGREEMENT. Company expressly understands and
agrees that Consultant will not be prevented or barred from rendering services
of the same nature as or a similar nature to those described herein, or of any
nature whatsoever, for or on behalf of any person, firm, corporation or entity
other than Company. Consultant understands and agrees that Company will not be
prevented or barred from retaining other persons or entities to provide services
of the same nature as or similar nature to those described herein or of any
nature whatsoever. Consultant may also perform services for Company other than
those contained in this Agreement for such compensation and under such terms and
conditions as may be agreed upon in writing by Company and Consultant.
5. CONFIDENTIALITY. Consultant acknowledges that certain information
provided to Consultant by Company may be of a confidential nature which Company
has developed for its own internal use ("Confidential Information"). Such
Confidential Information, if disclosed to Consultant, will be disclosed on a
confidential basis subject to the following terms and conditions:
(a) Consultant recognizes and acknowledges (i) the competitive
value and confidential nature of the Confidential Information and the
damage that could result to Company if information contained therein is
disclosed to any unauthorized third party, (ii) that, by virtue of its
knowledge of the Confidential Information, Consultant may be deemed an
"insider" as that term is defined or utilized under state and or federal
securities laws and (iii) that the disclosure of Confidential Information
by Consultant may violate state and federal securities laws. The
Confidential Information will be used solely for providing Consulting
Services hereunder and will not be used by Consultant in any way
detrimental to Company.
(b) The Confidential Information will be revealed only to those
persons whose knowledge of the information is required to allow Consultant
to perform its duties hereunder.
(c) During the Consulting Period and for a period of three years
after its termination, Consultant will not proceed with, cause or assist in
any manner any transaction or offer looking to the acquisition directly or
indirectly by purchase or otherwise of Company or any interest in or asset
of Company except if the Company so requests in writing.
(d) Notwithstanding anything to the contrary set forth herein,
if Consultant is requested or becomes legally compelled to disclose any of
the Confidential Information hereunder or to take any other action
prohibited hereby, Consultant will provide Company with prompt written
notice so that Company may seek a protective order or other appropriate
remedy and/or waive compliance with the provisions of this Agreement. If
such protective order or other remedy is not obtained or Company waives in
writing compliance with provisions of this Agreement, Consultant will
furnish only that portion of the Confidential Information that is
legally required to be furnished.
(e) Consultant will be responsible for any breach of the
provisions hereof by Consultant (including its employees, affiliates and
consultants) or any other person to whom Consultant makes disclosures
unless disclosure to such other person was authorized by the Company prior
to such disclosure.
(f) It is agreed and understood that Confidential Information
does not include information 1.) which Consultant can establish was or
becomes generally available to the public other than as a result of a
disclosure by the Consultant, (including its employees, affiliates and
consultants) or any other person to whom Consultant makes disclosures in
accordance with the provisions of this Agreement or 2.) was or becomes
available to Consultant from a source other than the Company, provided that
such source is not, to the best of Consultant's knowledge, subject to a
confidentiality agreement with the Company.
6. DISCLAIMER OF RESPONSIBILITY FOR ACTS OF COMPANY. The obligations of
Consultant described in this Agreement consist solely of the furnishing of
information and advice to Company. Consultant's status hereunder is that of
independent contractor and in no event will Consultant be required or permitted
by this Agreement to act as the agent or employee of Company or otherwise to
represent or make decisions for Company. All final decisions with respect to
acts of Company or its affiliates, whether or not made pursuant to or in
reliance on information or advice furnished by Consultant hereunder, will be
those of Company or such affiliates and Consultant will under no circumstances
be liable for any claims, costs, expenses, damages or causes of action
incurred or suffered by Company or its affiliates or agents as a
consequence of such decisions. Similarly, Company will under no circumstances
be liable for any expense incurred or loss suffered by Consultant, its
affiliates, or agents as a result of actions taken by Consultant hereunder or
for any claims, costs, expenses, damages or causes of action arising out of any
actions or omissions of Consultant which are beyond the scope of Consultant's
authority hereunder. In acting pursuant to this Agreement, Consultant agrees to
comply with all applicable laws, including the Securities Act of 1933, the
Securities Exchange Act of 1934, state securities laws and the rules and
regulations thereunder.
7. AMENDMENT. No amendment to this Agreement will be valid unless such
amendment is in writing and is signed by authorized representatives of all the
parties to this Agreement.
8. WAIVER. Any of the terms and conditions of this Agreement may be
waived at any time and from time to time in writing by the party entitled to the
benefit thereof, but a waiver in one instance will not be deemed to constitute a
waiver in any other instance. A failure to enforce any provision of this
Agreement will not operate as a waiver of the provision or of any other
provision hereof.
9. SEVERABILITY. If any provision of this Agreement will be held to be
invalid, illegal or unenforceable in any circumstances, the remaining provisions
will nevertheless remain in full force and effect and will be construed as if
the unenforceable portion or portions were deleted.
10. GOVERNING LAW. This agreement will be governed by and construed and
enforced in accordance with the laws of the State of New Jersey, without regard
to the conflict of law provisions thereof.
11. CHOICE OF FORUM. The parties hereto agree that should any suit,
action or proceeding arising out of this Agreement be instituted by any party
hereto (other than a suit, action or proceeding to enforce or realize upon any
final court judgment arising out of this Agreement), such suit, action or
proceeding will be instituted only in a state or federal court in Essex County,
New Jersey. Each of the parties hereto consents to the personal jurisdiction of
any state or federal court in Essex County, New Jersey and waives any objection
to the venue of any such suit, action or proceeding. The parties hereto
recognize that courts outside Essex County, New Jersey may also have
jurisdiction over suits, actions or proceedings arising out of this Agreement,
and in the event that any party hereto will institute a proceeding involving
this Agreement in a jurisdiction outside Essex County, New Jersey, the party
instituting such proceeding will indemnify any other party hereto for any losses
and expenses that may result from the breach of the foregoing covenant to
institute such proceeding only in a state or federal court in Essex County, New
Jersey, including without limitation any additional expenses incurred as a
result of litigating in another jurisdiction, such as reasonable fees and
expenses of local counsel and travel and lodging expenses for parties,
witnesses, experts and support personnel.
12. SERVICE OF PROCESS. Service of any and all process that may be served
on any party hereto in any suit, action or proceeding arising out of this
Agreement may be made in the manner and to the address set forth in Section 13
and service thus made will be taken and held to be valid personal service upon
such party by any party hereto on whose behalf such service is made.
13. NOTICES. All notices, requests, payments, instructions, claims or
other communications hereunder will be in writing and will be deemed to be given
or made when delivered by first-class, registered or certified mail to the
following address or addresses or such other address or addresses as the parties
may designate in writing in accordance with this Section:
If to Company:
Emerson Radio Corp.
Nine Entin Road
Parsippany, New Jersey 07054-0430
Attn: President
If to Consultant:
Starr Securities, Inc.
19 Rector Street
New York, New York 10006
Attn: President
14. ASSIGNMENT. This Agreement will be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns. This
Agreement contemplates personal services and may not be assigned by Consultant
without the prior written consent of Company.
15. EXECUTION IN COUNTERPARTS. This Agreement may be executed by the
parties in separate counterparts, each of which when so executed and delivered
will be deemed to be an original and all of which when taken together will
constitute one and the same agreement.
STARR SECURITIES, INC. EMERSON RADIO CORP.
By: /s/ Martin Vegh, President By: /s/ Eugene I. Davis
(Name) (Title) Eugene I. Davis,
President