CONSULTATION AGREEMENT
This Agreement, made as of the 17th day of April, 1997, by
and between
Campo Electronics, Appliances and Computers, Inc., (the
"Company")
109 Northpark Blvd., Suite 500
Covington, LA 70433 ("Facility"), and
York Management Services, Inc. ("Consultant")
37 Northfield Ave.
Edison, NJ 08837
WHEREAS, Company desires to retain the services of
Consultant as set forth herein in accordance with the terms and
conditions of this Agreement; and
WHEREAS, Consultant desires to provide the services to
Company as set forth herein, and intending to be legally bound,
Company and Consultant hereby agree as follows:
1. DEFINITIONS
As used in this Agreement, the following terms shall
have the meanings set forth below:
1.1 "Affiliate" shall mean a corporation which,
directly or indirectly, controls, is controlled by or is under
common control with the Company, and for purposes hereof,
"control" shall mean the ownership of 20% or more of the Voting
Stock of the corporation in question.
1.2 "Board" shall mean the Board of Directors of the
Company as duly constituted from time to time.
1.3 "the Business" shall mean the business to be
conducted by the Company or any Subsidiary, directly or
indirectly, including but not limited to retail sales.
1.4 "Commencement Date" shall be the date first set
forth on page one of this Agreement.
1.5 "Confidential Information" shall include, without
limitation by reason of specification, any information,
including, without limitation, trade secrets, vendor and customer
lists, pricing policies, operational methods, methods of doing
business, technical processes, formulae, designs and design
projects, inventions, research projects, strategic plans, product
information, production know-how and other business affairs of
the Company or its Affiliates, which (i) is or are designed to be
used in or are or may be useful in connection with the business
of the Company, any Subsidiary or any Affiliate of any thereof,
or which, in the case of any of these entities, results from any
of the research or development activities of any such entity,
which (ii) is private or confidential in that it is not generally
known or available to the public, except as the result of
unauthorized disclosure by or information supplied by Consultant,
or (iii) which gives the Company or a Subsidiary or any Affiliate
an opportunity or the possibility of obtaining an advantage over
competitors who may not know or use such information or who are
not lawfully permitted to use the same.
1.6 "Date of Termination" shall have the meaning
assigned to it in Section 3.
1.7 "Notice of Termination" shall have the meaning
assigned to that term in Section 3.
1.8 "Person" shall mean any individual, sole
proprietorship, partnership, joint venture, trust, unincorporated
organization, association, corporation, institution, public
benefit corporation, entity of government (whether Federal,
state, county, city, municipal or otherwise, including, without
limitation, any instrumentality, division, agency, body or
department thereof).
1.9 "Subsidiary" shall mean a corporation of which
more than 50% of the Voting Stock is owned, directly or
indirectly, by the Company.
1.10 "Term" shall mean the term of retention of
Consultant under this Agreement.
1.11 "Voting Stock" shall mean capital stock of a
corporation which gives the holder the right to vote in the
election of directors for such corporation in the ordinary course
of business and not as the result of, or contingent upon, the
happening of any event.
Wherever from the context it appears appropriate, each word
or phrase stated in either the singular or the plural shall
include the singular and the plural, and each pronoun stated in
the masculine, feminine or neuter gender shall include the
masculine, feminine and neuter.
2. CONSULTATION DUTIES OF THE CONSULTANT
2.1 Consultation Duties. The Company hereby retains
Consultant, and Consultant hereby accepts appointment as
Consultant to the Company. The principal duty of Consultant
shall be to perform those services which may be requested by the
Board, including, but not limited to, assistance in the
evaluation of the Company's existing business; and assistance in
the formulation of a strategic plan to restore the Company's
profitability, including restructuring and reorganization
alternatives, and to render services as are necessary and
desirable to protect and advance the best interests of the
Company and its Subsidiaries. Consultant agrees to devote
whatever reasonable time is required to perform such duties.
2.2 Consultant shall report to and be under the
supervision of the Board.
2.3 Consultant does not hold itself out as having the
licenses of, nor does Consultant perform the services of,
attorneys, accountants, brokers, or other service providers
requiring a license.
3. TERM OF RETENTION
3.1 The retention of Consultant pursuant to this
Agreement shall commence as of the Commencement Date, and end
seven (7) days after receipt of written notice by one party from
the other terminating this Agreement (the "Termination Date").
4. PLACE OF WORK
4.1 Consultant's services shall be performed initially
in substantial part at the home office location of the Company,
and the Company agrees to afford to Consultant and its personnel,
office space at the Company headquarters, and other business
premises owned by or available to Company as is reasonably
requested.
5. COMPENSATION AND BENEFITS
5.1 Retainer. Company agrees to pay Consultant a
retainer of $50,000.00 on the Commencement Date, which Consultant
shall hold as security for the timely payment and performance by
the Company of its obligations hereunder. If the Company
breaches this Agreement, Consultant may apply the retainer to
reduce Consultant's damages. Following the Termination Date,
after all fees, bonuses and expenses due to Consultant have been
paid, the balance of the retainer shall be refunded to the
Company.
5.2 Fees and Expenses. Company agrees to pay fees for
services rendered by personnel of Consultant based upon the
hourly rates attached hereto as Exhibit A. Hourly fees for
personnel not listed on Exhibit A shall be billed at the rates
regularly charged by Consultant for services personnel performing
similar functions. Personnel of Consultant shall include
employees of Consultant and independent consultants selected by
Consultant to perform on behalf of the Consultant. All rates
quoted may be reasonably increased from time to time in the event
the assignment extends beyond a six (6) month period. Company
agrees to reimburse Consultant for all reasonable and necessary
expenses incurred by Consultant by reason of this Agreement,
including, but not limited to travel, including air travel and
rental car, mileage reimbursement for use of Consultant's
personal automobiles, and for lodging and meal expenses whenever
Consultant's personnel are away from home. Travel time shall be
reimbursed at one-half (1/2) of the Consultant's hourly rates
listed on Exhibit A.
5.3 Billing and Payment. Consultant agrees to render
weekly invoices to Company for fees and expenses, and any delay
in rendering such invoices shall not constitute a waiver of such
fees and expenses. Company agrees to pay such invoices within
two (2) business days of receipt by wire transfer to Consultant's
bank, or by certified check or cashier's check.
5.4 Taxes. Company agrees that all taxes due by
reason of amounts payable, or paid to Consultant under this
Agreement (for instance, sales taxes), are the responsibility of
and to be paid by Company, other than federal, state, and local
taxes on the Consultant's income.
5.5 Bonus for Exceptional Performance. Company agrees
that Consultant will receive a bonus for exceptional performance
in the event the Company's financial condition is stabilized or
the Company is sold or merged. In the event the Company's
financial condition is stabilized through the end of the
Company's current fiscal year without recourse to reorganization
under Title 11 of the United States Code, Consultant shall be
paid a Success Fee in the amount of $200,000. In the event the
Company becomes a debtor in a case under Title 11 of the United
States Code, Consultant shall be paid a Success Fee in the
amount of $200,000, in the event a Plan of Reorganization is
confirmed on or before twelve (12) months following the initial
filing date.
5.6 Except as hereinafter provided, in the event the
term of this Agreement extends beyond sixty (60) days, and the
Board of the Company, during the term of this Agreement or within
six (6) months following the termination date elects to undertake
the sale of the Company, York shall be retained as the exclusive
representative to market the Company, and shall be paid a fee for
the completion of a transaction in accordance with a written
agreement to be concluded within the next thirty (30) days, which
fee shall be calculated using the "Lehman formula". No fee shall
be due Consultant in connection with the sale of the Company to
Consultant or an entity which, directly or indirectly, is owned
or controlled by Consultant or any person or entity to whom
indemnification is extended pursuant to Section 10.2 of this
Agreement.
5.7 Obligations of the Company. The Company's
obligation to pay Consultant the compensation, fees and expenses
contained herein and to make the arrangements provided herein
shall be absolute and unconditional and shall not be affected by
any circumstance, including, without limitation, any setoff,
counterclaim, recoupment, defense or other right which the
Company may have against Consultant or anyone else. All amounts
payable by the Company hereunder shall be paid without notice or
demand.
6. INDEPENDENT CONTRACTOR STATUS
6.1 Consultant shall for all purposes hereunder be an
independent contractor with respect to the Company. Consultant
shall not be deemed an officer or director or agent of the
Company. This Agreement shall not constitute Consultant as a
joint venturer or partner of the Company. Consultant shall have
no liability for any debts or obligations of the Company.
Consultant shall have no authority to contract on behalf of, or
otherwise bind the Company without the express authorization of
the Board.
6.2 Except as provided in Section 6.3 of this
Agreement, nothing contained in this Agreement shall preclude
Consultant from being a purchaser of the Company or its Assets,
or a proponent of a plan for the Company to reorganize same, or
to participate in any way in any transaction respecting the
Company.
6.3 Consultant agrees that neither it nor any person
or entity to whom indemnification is extended pursuant to Section
10 of this Agreement will (i) make any proposal to buy securities
or other assets of the Company without the prior approval of the
Board unless the Board has decided to offer the Company for sale,
or (ii) solicit proxies to vote shares of the Company; or (iii)
trade in Company stock.
7. INFORMATION AND CONFIDENTIALITY
7.1 The Company agrees to provide access to all
financial and other information and records to Consultant and to
Consultants officers, employees and representatives, as
Consultant shall reasonably request.
7.2 Consultant agrees that it may obtain Confidential
Information during the course of its retention hereunder by the
Company . Accordingly, Consultant agrees that it shall not,
either during the Term of this Agreement or at any time within
one year after the Date of Termination (i) use or disclose any
such Confidential Information outside the Company and Affiliates;
or (ii) except as required in the proper performance of its
services hereunder, remove or aid in the removal from the
premises of the Company or any Affiliate, of any Confidential
Information or any property or material relating thereto.
(a) The foregoing confidentiality provision shall
cease to be applicable to any Confidential Information which
becomes generally available to the public (except by reason of or
as a consequence of a breach by Consultant of his obligations
under this Section).
(b) In the event Consultant is required by law or
a court order to disclose any such Confidential Information, it
shall promptly notify the Company of such requirement and provide
the Company with a copy of any court order or of any law which in
its opinion requires such disclosure, and if the Company so
elects, permit the Company an adequate opportunity, at its own
expense, to contest such law or court order.
8. DISPUTES AND REMEDIES
8.1 WAIVER OF JURY TRIAL. CONSULTANT AND THE COMPANY
HEREBY WAIVE THE RIGHT TO A TRIAL BY JURY IN THE EVENT OF ANY
DISPUTE WHICH ARISES UNDER THIS AGREEMENT.
9. REGULATORY COMPLIANCE
9.1 All regulatory compliance decisions are the
responsibility of the Company; and, without limitation,
Consultant shall have no duty, responsibility or authority with
respect to regulatory compliance duties, including, without
limitation: (1) the management, handling, transport, disposal or
remediation of hazardous wastes or hazardous substances; (2)
compliance with applicable federal, state or local statutes,
ordinances, regulations, orders and requirements of common law in
any way affecting or pertaining to health, safety or the
environment; and (3) filings with federal and state securities
authorities and federal, state and local taxing authorities.
10. INDEMNIFICATION AND HOLD HARMLESS
10.1 Company and its subsidiaries, if any, jointly and
severally agree to indemnify and hold harmless Consultant to the
full extent lawful, against any and all losses, actions, claims,
damages, liabilities or costs including reasonable legal fees and
expenses (collectively, "Loss"), whether or not in connection
with a matter in which Consultant is a party, as and when
occurred, directly or indirectly, caused by, relating to, based
upon or arising out of Consultant's activities pursuant to this
Agreement. The Consultant will not be held liable for errors in
judgment. Notwithstanding the foregoing, Company shall have no
duty to indemnify or to hold harmless Consultant for any loss,
action, claim, damage, liability or costs to the extent such Loss
is found, in a final judgment by a court of competent
jurisdiction to have resulted primarily and directly from the
gross negligence, willful misconduct or unlawful activities of
Consultant.
10.2 Limitation of Liability. Company and its
subsidiaries, if any, agree that the Consultant's liability to
Company, to the extent not otherwise limited, indemnified or held
harmless under this Agreement, is further limited to the amount
of fees paid to Consultant under Section 5.2.
10.3 Included Indemnities. Except for liability
arising from Consultant's gross negligence, willful misconduct or
unlawful activities, These indemnification and hold harmless
provisions shall be in addition to any liability which Company
may otherwise have to Consultant and shall include, in addition
to Consultant, Consultant's affiliated entities, directors,
officers, employees, independent contractors employed by
Consultant for this project, agents and controlling persons of
Consultant within the meaning of the federal securities laws.
All references to Consultant in these indemnification and hold
harmless provisions, and other provisions of this Agreement shall
be understood to include any of the foregoing persons.
10.4 Counsel and Notification of Company. If any
claim, action, proceeding, or investigation is commenced as to
which Consultant proposes to demand such indemnification and to
be held harmless, it will notify the Company promptly upon
becoming aware of any such action, proceeding or investigation.
Consultant will have the right to retain counsel of its own
choice to represent it, subject to the Company's approval of such
counsel, which approval shall not be unreasonably withheld, and
the Company will pay the reasonable fees and expenses of such
counsel; and such counsel shall to its fullest extent consistent
with its professional responsibilities cooperate with the Company
and any counsel designated by it. The Company will only be
liable for any settlement of any claim against Consultant made
with the Company's written consent, which consent shall not be
unreasonably withheld.
10.5 Duration. Neither termination nor completion of
the engagement of Consultant pursuant to this Agreement shall
affect the indemnification and hold harmless provisions which
shall remain operative and in full force and effect.
10.6 Health, Safety and Environmental Inclusion. The
Company its subsidiaries agree to indemnify and hold harmless the
Consultant from any breach of the representations and warranties
and covenants set forth in Section 11 below, to the full extent
set forth in Section 10.
10.7 In the event of litigation between Company and
Consultant, the prevailing party shall be entitled to recover its
reasonable fees and expenses.
11. HEALTH, SAFETY AND ENVIRONMENTAL REPRESENTATIONS,
WARRANTIES, AND COVENANTS
11.1 Company and its subsidiaries, if any, jointly and
severally, represent and warrant that:
(a) All activities and operations of Company have
been and are being conducted in compliance with all applicable
federal, state and local environmental, health, and safety
statutes, ordinances, regulations and orders and requirements of
common law ("Environmental Statutes").
(b) No Hazardous Substance (as herein defined) is
present in, on, over or under any facilities owned or leased by
Company or its subsidiaries, if any (collectively, "Company
Facilities") in a manner as may require remediation under any
Environmental Statute or, to Company's knowledge, is present in,
on, over or under any adjacent premises or is migrating to the
Facility or to Company Facilities. The term "Hazardous
Substances" means substances and/or materials that are regulated
pursuant to Environmental Statutes, including, without
limitation, substances and materials that are or contain
hazardous substances, hazardous wastes, hazardous materials,
toxic substances, regulated substances, and petroleum as those
terms are defined pursuant to any Environmental Statute.
(c) Company has obtained and maintained and is in
compliance with all registrations, licenses, permits and
approvals, including amendments thereto, issued by governmental
agencies pursuant to Environment Statutes and all are in full
force and effect.
(d) The generation,, handling, treatment,
storage, transportation and disposal of Hazardous Substances and
waste by, or on behalf of, Company was and is in compliance with
all applicable federal, state and local laws, ordinances and
regulations, including Environmental Statutes.
(e) Company has not received any notice of any
violation of or investigation or claim of liability under any
Environmental Statute regarding or relating to the Facility and
Company Facilities and their operation or notice of any
investigation or potential liability of Company regarding any
other facility including, without limitation, those to which
Company, Company Facilities or the Facility sent Hazardous
Substances or waste for handling, treatment, storage or disposal
("Other Facilities").
(f) Neither the Facility, Company Facilities, nor
any Other Facility is listed or proposed for listing on the
National Priorities List or the Comprehensive Environmental
Response, Compensation and Liability Information System list
promulgated pursuant to the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. 9601 et seq., as
amended, or any analogous state or local list.
11.2 Company and its subsidiaries, if any, agree to
remain in compliance with all Environmental Statutes.
12. ENTIRE AGREEMENT, WAIVER AND OTHER
12.1 Entire Agreement. This Agreement constitutes the
entire understanding and Agreement between the parties hereto
with respect to the subject matter and supersedes all previous
agreements between the parties hereto, written or oral, express
or implied, covering the subject matter hereof. No
representations, inducements, promises or agreements, oral or
otherwise, not embodied herein, shall be of any force or effect.
This Agreement may not be amended, changed, modified, or
supplemented, except in writing signed by each party.
12.2 Neither party shall sell, assign, convey or
otherwise transfer this Agreement, or any of the rights,
interests or obligations hereunder to any other party without the
prior written consent of the other party. In the event the
Company becomes a debtor in a case under Title 11 of the United
States Code, it shall immediately apply to assume this Agreement.
12.3 Notices. Any written notice required to be given
hereunder shall be valid if sent by registered or certified mail
with return receipt requested, or by Federal Express or other
overnight service with receipt verification, to the address of
the party set forth in the opening paragraph of this Agreement,
or to such other address as one party shall provide in writing to
the other in accordance with this paragraph.
12.4 Governing Law. This Agreement shall be governed
by and construed, and the rights and obligations of the parties
hereto enforced, in accordance with the laws of the State of
Louisiana.
12.5 No Waiver. No waiver or modification of any of the
provisions of this Agreement shall be valid unless in writing and
signed by or on behalf of the party granting such waiver of
modification. No waiver by any party of any breach or default
hereunder shall be deemed a waiver of any repetition of such
breach or default or shall be deemed a waiver of any other breach
or default, nor shall it in any way affect any of the other terms
or conditions of this Agreement or the enforceability thereof.
No failure of the Company to exercise any power given it
hereunder or to insist upon strict compliance by Consultant with
any obligation hereunder, and no custom or practice at variance
with the terms hereof, shall constitute a waiver of the right of
the Company or Consultant to demand strict compliance with the
terms hereof.
(a) Consultant shall not have the right to sign
any waiver or modification of any provisions of this Agreement on
behalf of the Company, nor shall any action taken by Consultant
reduce its obligations under this Agreement.
(b) This Agreement may not be supplemented or
rescinded except by an instrument in writing signed by the
parties hereto. Neither this Agreement nor any of the rights of
any of the parties hereto may be terminated except as provided
herein.
12.6 Separability of Provisions. If any provision of
this Agreement shall be or become illegal or unenforceable in
whole or in part for any reason whatsoever, the remaining
provisions shall nevertheless be deemed valid, binding and
subsisting.
12.7 Headings and Paragraphs. The headings and
paragraphs of this Agreement are for reference purposes only, and
shall not in any way affect the meaning or interpretation of this
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the day and year first above written.
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COMPANY CONSULTANT
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Campo Electronics, Appliances York Management Services, Inc.
and Computers, Inc.
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/s/ Rex Corley, Jr. /s/ William F. Taggart
Rex Corley, Jr. William F. Taggart
President President
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Exhibit A to Agreement dated as of April 17, 1997, by and between
Campo Electronics, Appliances and Computers, Inc., ("Company"),
and York Management Services, Inc., ("Consultant").
Schedule of Hourly Billing Rates
Name Hourly Billing Rate
William F. Taggart 350.00
Tom Hays 245.00
Sanford (Sandy) Nacht 225.00
Sid Layton 195.00
John Hennessey 195.00
Tom Kirkpatrick 195.00
Administrative/Secretarial
Services 80.00