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EXHIBIT 10.6
CONSULTING AGREEMENT
BY AND BETWEEN
MAXXIS GROUP, INC.
AND
ROBERT P. KELLY
DATED: SEPTEMBER 1, 1997
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TABLE OF CONTENTS
PAGE
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1 Engagement ............................................................1
2 Term ..................................................................1
3 Payment ...............................................................1
4 Relationship of Parties ...............................................1
5 Covenants .............................................................2
6 Termination ...........................................................3
7 Trade Secrets, Non-Solicitation and Related Matters ...................3
8 Successors; Binding Agreement .........................................5
9 Notice ................................................................6
10 Settlement of Claims ..................................................6
11 Modification and Waiver ...............................................6
12 Governing Law .........................................................6
13 Severability ..........................................................6
14 Entire Agreement ......................................................6
15 Headings ..............................................................6
16 Counterparts ..........................................................6
17 Definitions ...........................................................7
EXHIBIT A TERRITORY
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CONSULTING AGREEMENT
This CONSULTING AGREEMENT (this "Agreement") is made by and
between MAXXIS GROUP, INC., a Georgia corporation (the "Company"), and ROBERT P.
KELLY, an individual resident of the State of Georgia (the "Consultant"), as of
this 1st day of September, 1997.
The Company desires to engage the Consultant, and the
Consultant is willing to be engaged by the Company in such capacity on the terms
and conditions herein provided. Certain terms used in this Agreement are defined
in Section 17 hereof.
In consideration of the foregoing, the mutual covenants
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, hereby agree as follows:
1. Engagement. The Company shall engage the Consultant, and
the Consultant agrees to be engaged by the Company, upon the terms and
conditions set forth herein. The Consultant shall have such duties and
responsibilities ("Duties") as are assigned by the President from time to time.
The Consultant shall devote such portion of his business time (up to and
including his full business time) and such attention, skill and efforts to the
performance of his Duties hereunder as are necessary to competently and
professionally perform and discharge such Duties.
2. Term. Unless earlier terminated as provided herein, the
Consultant's engagement under this Agreement shall be for a continuing term (the
"Term") of one year, which shall be extended automatically (without further
action of the Company or the Consultant) each day for an additional day so that
the remaining term shall continue to be one year; provided, however, that either
party may at any time, by written notice to the other, fix the Term to a finite
term of one year, without further automatic extension, commencing with the date
of such notice.
3. Payment.
a. Effective July 1, 1997, the Company shall pay the
Consultant a fee of $800.00 per week, subject to increase upon the mutual
written agreement of the Company (following specific approval of such increase
by the Company's Board of Directors) and the Consultant.
b. The Consultant may be eligible to receive a performance
bonus based on such criteria as the Board of Directors may determine from time
to time in its sole discretion.
4. Relationship of Parties. The Consultant shall at all times
be and act as an independent contractor, and the Company shall exercise no
control over the activities and operations of the Consultant other than as set
forth herein. The Consultants's Federal Tax I.D. number is ###-##-####. This
Agreement shall not be deemed to create any agency,
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employment, partnership or joint venture relationship between the Company and
the Consultant, and the Consultant shall enjoy no fringe benefits accorded to
employees of the Company. Neither party hereto shall have the power of authority
to (and agrees not to attempt to) bind, commit or obligate the other in any
manner whatsoever without the other's prior written consent, or to use the other
party's name in any way not specifically authorized by this Agreement. No
representations of either party shall be binding upon the other party without
the other party's prior written consent.
5. Covenants. The Consultant covenants and agrees, in
addition to the other duties and obligations of the Consultant set forth in the
Agreement, that the Consultant will:
a. bear all costs, expenses and liability relating to his
business and operations, including, but not limited to, the costs and expenses
of providing and maintaining his place of business, the wages and salaries of
his employees, if any, and expenses incurred for or in connection with his
performance under this Agreement;
b. not use any trademarks or tradenames of the Company in any
manner except with the prior written authorization of the Company;
c. maintain within limits specified by the Company (or, in the
absence of any specification by the Company, reasonable and adequate limits)
workers compensation and liability insurance (other than products liability
insurance) in connection with his operations, and to furnish the Company with a
certificate evidencing the required insurance immediately upon the Company's
request;
d. immediately give the Company written notice of any offers,
whether oral or written, received by him, or his agents or employees, during the
term of this Agreement which if accepted, would place the Consultant in
violation of his covenants or agreements hereunder;
e. give the Company notice of any person, firm or entity who
is infringing upon the trademarks, tradenames or other intellectual property of
the Company immediately upon the Consultant's receipt of notice thereof;
f. hold harmless, defend and indemnify the Company and its
officers, directors, employees and agents from and against any and all claims,
damages, losses, injuries, causes of action, demands and expenses, including
reasonable legal fees and expenses, of whatever kind and nature directly or
indirectly arising out of, on account of or resulting from the Consultant's
activities or out of the Consultant's failure to comply with his obligations
under this Agreement; and
g. comply strictly with all rules, regulations, policies and
procedures of the Company applicable to independent contractors as such may be
established by the Company from time to time.
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6. Termination.
a. The Consultant's engagement under this Agreement may be
terminated prior to the end of the Term only as follows:
(i) upon the death of the Consultant;
(ii) by the Company due to the Disability of the
Consultant upon delivery of a Notice of Termination
to the Consultant;
(iii) by the Company for Cause upon delivery of a Notice of
Termination to the Consultant; and
(iv) by the Company without Cause upon delivery of a
Notice of Termination to the Consultant.
b. If the Consultant's engagement with the Company shall be
terminated during the Term (i) by reason of the Consultant's death or (ii) by
the Company for Disability or Cause, the Company shall pay to the Consultant (or
in the case of his death, the Consultant's estate) within 15 days after the
Termination Date, a lump sum cash payment equal to the Accrued Fees and, if such
termination is other than by the Company for Cause, any accrued performance
bonus.
c. If the Company terminates the Consultant without Cause
pursuant to Section 6(a)(iv) above, the Company shall pay to the Consultant in
cash at the end of each week during the six-month period following the
Termination Date an amount equal to $800.00 The severance fee payments provided
for in this Section 6 shall be in full and complete discharge of any and all
liabilities of the Company to the Consultant and shall be in lieu of any other
severance or termination pay to which the Consultant may also be entitled. The
Consultant shall not be required to mitigate the amount of any payment provided
for in this Agreement by seeking other consulting arrangements or otherwise, and
no such payment shall be offset or reduced by the amount of any compensation or
benefits provided to the Consultant in any subsequent consulting arrangement.
7. Trade Secrets, Non-Solicitation and Related Matters.
a. The Consultant shall not, at any time, either during the
Term of his engagement or after the Termination Date, use or disclose any Trade
Secrets of the Company, except in fulfillment of his duties as the Consultant
during his engagement, for so long as the pertinent information or data remain
Trade Secrets, whether or not the Trade Secrets are in written or tangible form.
b. The Consultant agrees to maintain in strict confidence and,
except as necessary to perform his duties for the Company, not to use or
disclose any Confidential Business Information during his engagement and for a
period of 24 months after the Termination Date.
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c. Upon termination of the engagement provided for herein, the
Consultant shall deliver to the Company, at the Consultant's expense, all
business records relating to the Company and its affiliates including, without
limitation, all contracts, calendars and other materials relating to the
business records, the Company's business or its customers, including all
physical, electronic and computer copies thereof, whether or not the Consultant
prepared such materials or records himself. Upon such termination, the
Consultant shall retain no copies of any such materials.
d. The Consultant may disclose Trade Secrets or Confidential
Business Information pursuant to any order or legal process requiring him (in
his legal counsel's reasonable opinion) to do so; provided, however, that the
Consultant shall first have notified the Company of the request or order to so
disclose the Trade Secrets or Confidential Business Information in sufficient
time to allow the Company to seek an appropriate protective order.
e. If the Consultant is terminated or resigns for any reason,
then for a period of one year following the Termination Date, the Consultant
shall not (except on behalf of or with the prior written consent of the Company)
either directly or indirectly, on the Consultant's own behalf or in the service
or on behalf of others, (i) solicit, divert, or appropriate to or for a
Competing Business, or (ii) attempt to solicit, divert, or appropriate to or for
a Competing Business, any person or entity that was a customer of the Company or
any of its affiliates on the Termination Date; provided, however, that if the
Consultant is terminated without Cause, then the non-solicit period under this
Section 5(e) shall be for a period of 180 days following the Termination Date.
For purposes of this Agreement, a "customer" refers to any person or group of
persons with whom the Consultant had direct material contact with regard to the
selling, delivery or support of the Company's products and services, including,
servicing such person's or group's account, during the period of two years
preceding the Termination Date.
f. If the Consultant is terminated or resigns for any reason,
then for a period of one year following the Termination Date, the Consultant
will not, either directly or indirectly, on the Consultant's own behalf or in
the service or on behalf of others (i) solicit, divert, or hire away, or (ii)
attempt to solicit, divert, or hire away, any employee of, independent associate
of or consultant to the Company or any of its affiliates engaged or experienced
in the Business, regardless of whether the employee or consultant is full-time
or temporary, the engagement is pursuant to written agreement, or the engagement
is for a determined period or is at will; provided, however, that if the
Consultant is terminated without Cause, then the non-solicit period under this
Section 7(f) shall be for a period of 180 days following the Termination Date.
g. The Consultant acknowledges and agrees that great loss and
irreparable damage would be suffered by the Company if the Consultant should
breach or violate any of the terms or provisions of the covenants and agreements
set forth in this Section 7. The Consultant further acknowledges and agrees that
each of these covenants and agreements is reasonably necessary to protect and
preserve the interests of the Company. The parties agree that money damages for
any breach of clauses (a) through (f) of this Section 7 will be insufficient to
compensate for any breaches thereof, and that the Consultant or any of the
Consultant's affiliates, as the case may be, will, to the extent permitted by
law, waive in any proceeding initiated to enforce such provisions any claim or
defense that an adequate remedy at law exists.
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The existence of any claim, demand, action or cause of action against the
Company, whether predicated upon this Agreement or otherwise, shall not
constitute a defense to the enforcement by the Company of any of the covenants
or agreements in this Agreement; provided, however, that nothing in this
Agreement shall be deemed to deny the Consultant the right to defend against
this enforcement on the basis that the Company has no right to its enforcement
under the terms of this Agreement.
h. The Consultant acknowledges and agrees that: (i) the
covenants and agreements contained in clauses (a) through (f) of this Section 7
are the essence of this Agreement; (ii) that the Consultant has received good,
adequate and valuable consideration for each of these covenants; (iii) each of
these covenants is reasonable and necessary to protect and preserve the
interests and properties of the Company; (iv) the Company is and will be engaged
in and throughout the Territory in the Business; (v) a Competing Business could
be engaged in from any place in the Territory; and (vi) the Company has a
legitimate business interest in restricting the Consultant's activities
throughout the Territory. The Consultant also acknowledges and agrees that: (i)
irreparable loss and damage will be suffered by the Company should the
Consultant breach any of these covenants and agreements; (ii) each of these
covenants and agreements in clauses (a) through (f) of this Section 7 is
separate, distinct and severable not only from the other covenants and
agreements but also from the remaining provisions of this Agreement; and (iii)
the unenforceability of any covenants or agreements shall not affect the
validity or enforceability of any of the other covenants or agreements or any
other provision or provisions of this Agreement. The Consultant acknowledges and
agrees that if any of the provisions of clauses (a) through (f) of this Section
7 shall ever be deemed to exceed the time, activity or geographic limitations
permitted by applicable law, then such provisions shall be and hereby are
reformed to the maximum time, activity or geographical limitations permitted by
applicable law.
8. Successors; Binding Agreement.
a. This Agreement shall be binding upon and shall inure to the
benefit of the Company, its Successors and Assigns and the Company shall require
any Successors and Assigns to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession or assignment had taken place.
b. Neither this Agreement nor any right or interest hereunder
shall be assignable or transferable by the Consultant, his beneficiaries or
legal representatives, except by will or by the laws of descent and
distribution. This Agreement shall inure to the benefit of and be enforceable by
the Consultant's legal personal representative.
9. Notice. For the purposes of this Agreement, notices and
all other communications provided for in the Agreement (including the Notice of
Termination) shall be in writing and shall be deemed to have been duly given
when personally delivered or sent by certified mail, return receipt requested,
postage prepaid, addressed to the respective addresses last given by each party
to the other; provided, however, that all notices to the Company shall be
directed to the attention of the President with a copy to the Secretary of the
Company. All
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notices and communications shall be deemed to have been received on the date of
delivery thereof.
10. Settlement of Claims. The Company's obligation to make the
payments provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any circumstances, including, without
limitation, any set-off, counterclaim, recoupment, defense or other right which
the Company may have against the Consultant or others. The Company may, however,
withhold from any benefits payable under this Agreement all federal, state, city
or other taxes as shall be required pursuant to any law or governmental
regulation or ruling.
11. Modification and Waiver. No provisions of this Agreement
may be modified, waived or discharged unless such waiver, modification or
discharge is agreed to in writing and signed by the Consultant and the Company.
No waiver by any party hereto at any time of any breach by the other party
hereto of, or compliance with, any condition or provision of this Agreement to
be performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent
time.
12. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Georgia
without giving effect to the conflict of laws principles thereof. Any action
brought by any party to this Agreement shall be brought and maintained in a
court of competent jurisdiction in State of Georgia.
13. Severability. The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof.
14. Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto and supersedes all prior agreements, if
any, understandings and arrangements, oral or written, between the parties
hereto with respect to the subject matter hereof.
15. Headings. The headings of Sections herein are included
solely for convenience of reference and shall not control the meaning or
interpretation of any of the provisions of this Agreement.
16. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
17. Definitions. For purposes of this Agreement, the
following terms shall have the following meanings:
a. "Accrued Fees" shall mean an amount which shall include
all amounts earned or accrued through the Termination Date but not paid as of
the Termination Date,
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including (i) fees payable and (ii) reimbursement for reasonable and necessary
expenses incurred by the Consultant on behalf of the Company during the period
ending on the Termination Date.
b. "Business" shall mean the development, marketing or
implementation of a network marketing distribution business, a long distance
reselling business or any other related business which the Company or any of its
affiliates is engaged in as of the Termination Date.
c. The termination of the Consultant's engagement shall be for
"Cause" if it is the result of:
(i) the commission or omission by the Consultant of
a willful or negligent act which causes harm to
the Company;
(ii) the conviction of the Consultant for the
commission or perpetration by the Consultant of
any felony or any act of fraud;
(iii) the failure of the Consultant to devote
sufficient time and attention to the business
as provided in Section 1; or
(iv) the failure of the Consultant to perform his
duties hereunder in a manner satisfactory to
the Company, as determined by the President of
the Company in his sole discretion; provided,
-------- however, that the Consultant shall
have 30 days to cure such ------- failure after
receiving notice from the Company. The Company
shall be obligated to provide only one notice
to Consultant pursuant to this Section
17(c)(iv). Thereafter, the Company may
terminate the Consultant, without the
Consultant having a right to cure, if the
Consultant fails to perform his duties in a
manner satisfactory to the President of the
Company, as determined in his sole discretion.
d. "Competing Business" shall mean any business that, in
whole or in part, is the same or substantially the same as the Business.
e. "Confidential Business Information" shall mean any
non-public information of a competitively sensitive or personal nature, other
than Trade Secrets, acquired by the Consultant, directly or indirectly, in
connection with the Consultant's engagement (including his engagement by the
Company prior to the date of this Agreement), including (without limitation)
oral and written information concerning the Company or its affiliates relating
to financial position and results of operations (revenues, margins, assets, net
income, etc.), annual and long-range business plans, marketing plans and
methods, account invoices, oral or written customer information and personnel
information. Confidential Business Information also includes information
recorded in manuals, memoranda, projections, minutes, plans, computer programs
and records, whether or not legended or otherwise identified by the Company and
its affiliates as Confidential Business Information, as well as information
which is the subject of meetings and discussions and not so recorded; provided,
however, that Confidential Business Information
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shall not include information that is generally available to the public, other
than as a result of disclosure, directly or indirectly, by the Consultant, or
was available to the Consultant on a non- confidential basis prior to its
disclosure to the Consultant.
f. "Disability" shall mean a physical or mental infirmity
which impairs the Consultant's ability to substantially perform his duties with
the Company for a period of 180 consecutive days, as determined by an
independent physician selected with the approval of both the Company and the
Consultant.
g. "Notice of Termination" shall mean a written notice of
termination from the Company which specifies an effective date of termination,
indicates the specific termination provision in this Agreement relied upon, and
sets forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Consultant's engagement under the provision so
indicated.
h. "Successors and Assigns" shall mean a corporation or other
entity acquiring all or substantially all the assets and business of the Company
(including this Agreement), whether by operation of law or otherwise.
i. "Termination Date" shall mean, in the case of the
Consultant's death, his date of death, and in all other cases, the date
specified in the Notice of Termination.
j. "Territory" shall mean that area specified on Exhibit A
attached hereto.
k. "Trade Secrets" shall mean any information, including but
not limited to technical or non-technical data, a formula, a pattern, a
compilation, a program, a device, a method, a technique, a drawing, a process,
financial data, financial plans, product plans, information on customers or a
list of actual or potential customers or suppliers, which: (i) derives economic
value, actual or potential, from not being generally known to, and not being
readily ascertainable by proper means by, other persons who can obtain economic
value from its disclosure or use; and (ii) is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed and its seal to be affixed hereunto by its officers thereunto duly
authorized, and the Consultant has signed and sealed this Agreement, effective
as of the date first above written.
MAXXIS GROUP, INC.
ATTEST:
By: /s/ James W. Brown By: /s/ Thomas O. Cordy
-------------------------- --------------------------------
Name: James W. Brown Name: Thomas O. Cordy
Title: Secretary Title: Chief Executive Officer
and President
CONSULTANT
/s/ Robert P. Kelly
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Robert P. Kelly
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EXHIBIT A
TERRITORY
30 mile radius from the Company's corporate offices located at 1901
Montreal Road, Suite 108, Tucker, Georgia 30084