Sample Business Contracts

Consulting Agreement - Parlux Fragrances Inc. and Cambridge Development Corp.

Sponsored Links


This Consulting Agreement (hereinafter "Agreement") dated as of May 1, 2002,
between PARLUX FRAGRANCES, INC., a corporation organized and existing under the
laws of the State of Delaware (hereinafter "Corporation") and CAMBRIDGE
DEVELOPMENT CORPORATION, 14 Vanderventer Avenue, Port Washington, New York 11050
(hereinafter "Consultant"), and Albert F. Vercillo (hereinafter "Vercillo"), the
President of Consultant residing at 74 Summit Road, Port Washington, New York
11050. Collectively hereinafter referred to as "Parties".

WHEREAS, Corporation, Consultant and Vercillo are parties to a Consulting
Agreement dated November 1, 1999 extending through May 31, 2003, which is hereby
terminated without liability to either party.

WHEREAS, the parties wish to enter into a new Consulting Agreement under revised
terms and conditions set forth herein;

NOW, THEREFORE, in consideration of the mutual understanding set forth herein,
the Parties agree as follows:

1.  Consultant's Duties: The Corporation hereby engages the Consultant as its
business and financial consultant. Subject at all times to the control and
direction of the Corporations's Chief Executive Officer, Chief Operating Officer
and Chief Financial Officer (hereinafter Management), the Consultant shall have
the duties as the general advisor and consultant to Management on all matters
pertaining to the business and to render all other services relevant thereto.
The Consultant, by Vercillo, shall perform all other duties that may be
reasonably assigned to it by Management provided said duties be consistent with
the prestige and responsibility of Vercillo's position. The Consultant shall,
through its agents, servants and employees, devote its best efforts at all times
necessary to perform its duties and to advance the Corporation's best interests,
subject to reasonable vacations. The Consultant and the Corporation acknowledge
that the Consultant and its agents, servants and employees have other business
interests and shall not be required to devote its exclusive time and attention
to the performance of its duties hereunder.

2.  Term: Unless sooner terminated as provided in Section 7 below, this
Agreement shall be for a term of three (3) years and eleven  (11)  months
commencing as of May 1, 2002 and ending on March 31, 2006; provided however,
that the term of this Agreement shall be automatically extended on the same
terms and conditions for a one year period and from year to year thereafter
unless either the Corporation or the Consultant shall give written notice of the
termination of this Agreement to the other at least six (6) months prior to the
expiration of said term or extended term.

3.  Compensation: For all services rendered by the Consultant under this
Agreement, the Corporation shall pay to Consultant as compensation the sum of
$96,200 per annum payable in equal bi-weekly installments of $3,700.00.

4.  Health and Life Insurance: The Corporation shall, at no cost to the
Consultant or Vercillo, provide Vercillo with full health insurance, basic,
major medical and dental as well as group life insurance. Said coverage shall be
identical to that afforded the Corporation's Management.


                              CONSULTING AGREEMENT
                                     Page 2

5.  Expenses: Consultant will be reimbursed by the Corporation for all
reasonable business expenses incurred by the Consultant in the performance of
its duties. Said reimbursement shall be made no less frequently than monthly
upon submission by the Consultant of a written request for same.

6.  Stock Options (Warrants): Vercillo shall be granted non qualified stock
options (warrants) to purchase 30,000 shares of Corporation's common stock at an
exercise price of $1.86 per share being the closing price of the shares of
common stock on April 30, 2002. The options (warrants) shall be exercisable at
the rate of 10,000 on March 31, 2004, 10,000 on March 31, 2005 and 10,000 on
March 31, 2006. Each option (warrant) shall be exercised within a period of ten
(10) years after the date of the grant unless earlier terminated in accordance
with its terms or those of this Agreement. The rights of Vercillo with respect
to any stock option (warrant) granted to Vercillo shall be determined
exclusively by the plans and agreements relating to the options (warrants) and
this Agreement shall not affect, in any way, the rights and obligations of the
plans and agreements.

7.  Early Termination: The Corporation may terminate the Consultant's
relationship under this Agreement prior to the expiration of the term set forth
in Section 2 above only under the following circumstances:

i.        Death. Upon the death of Vercillo.

ii.       Disability. If, as a result of Vercillo's incapacity due to physical
          or mental illness, Vercillo having been unable to perform his duties
          under this Agreement for period of six consecutive calendar months,
          then thirty (30) days after written notice of termination is given to
          Consultant (which may only be given after the end of the six
          consecutive calendar month period) provided that Vercillo has not
          returned to his duties under this Agreement.

iii.      For Cause. The Corporation shall have "Cause" to terminate this
          Agreement upon

          (a)  the willful and continued failure by Consultant to substantially
               perform its duties under this Agreement (other than any failure
               resulting from Vercillo's incapacity due to physical or mental
               illness) for thirty (30) days after written demand for
               substantial performance is delivered by the Corporation
               specifically identifying the manner in which the Corporation
               believes Consultant has not substantially performed its duties,
               or (b) the willful engaging by Consultant or Vercillo in
               misconduct (including embezzlement and criminal fraud) which is
               materially injurious to the Corporation, or (c) the conviction of
               Vercillo of a felony. For purposes of this paragraph, no act, or
               failure to act, by the Consultant shall be considered "willful"
               unless done or omitted to be done, by Consultant not in good
               faith and without reasonable belief that its action or omission
               was in the interest of the Corporation. Consultant shall not be
               deemed to have been terminated for Cause unless and until there
               shall have been delivered to Consultant a copy of a resolution,
               duly adopted by the affirmative vote of a majority of the entire
               membership of the Board of Directors (Board) at a meeting of the
               Board called and held for such purpose (after a reasonable notice
               to the Consultant and an opportunity for Consultant, together
               with its counsel, to be heard before the Board), finding that in
               the good faith opinion of the Board, Consultant was guilty of
               conduct set forth above and specifying the particulars of the
               conduct in detail.


                              CONSULTING AGREEMENT
                                     Page 3

iv.       Termination by Consultant or Vercillo. Consultant or Vercillo may
          terminate this Agreement (a) for Good Reason (as defined below) or (b)
          Vercillo's health should become impaired to any extent that makes the
          performance of his duties under this Agreement hazardous to his
          physical or mental health or his life, provided that Vercillo shall
          have furnished the Corporation with a written statement from a
          qualified doctor to that effect and provided further that at the
          Corporation's request and expense Vercillo shall submit to an
          examination by a doctor selected by the Corporation, and the doctor
          shall have concurred in the conclusion of Vercillo's doctor.
          Consultant shall give the Corporation thirty (30) days prior written
          notice of its intent to terminate this agreement.

          "Good Reason" means the Corporation has had a Change in Control. For
          purposes of this Agreement, a Change in Control means the occurrence
          of an event or series of events (whether or not approved by the Board)
          by which any person or other entity or group of persons or other
          entities acting in concert as determined in accordance with Section
          12(d) of the Securities Exchange Act of 1934, as amended (the
          "Exchange Act"), whether or not applicable, together with its or their
          affiliates or associates shall, as a result of a tender offer or
          exchange offer, open market purchases, privately negotiated purchases,
          merger or otherwise (including pursuant to receipt of revocable
          proxies) (a) be or become directly or indirectly the beneficial owner
          (within the meaning of Rule 13d-3 and Rule 13d-5 under the Exchange
          Act, whether or not applicable, except that a person shall be deemed
          to have beneficial ownership of all securities that such person has
          the right to acquire whether such right is exercisable immediately or
          only after the passage of time) of more than thirty (30) percent of
          the combined voting power of the then outstanding common stock of the
          Corporation or (b) otherwise have the ability to elect, directly or
          indirectly, a majority of the Board.

v.        Notice of Termination. Any termination of this Agreement shall be
          communicated by written Notice of Termination to the other party of
          this Agreement. "Notice of Termination" means a notice which indicates
          the specific termination provision in this Agreement relied upon and
          shall set forth in reasonable detail the facts and circumstances
          claimed to provide a basis for the termination of the Consultant's
          retention under the provision so indicated.

vi.       Date of Termination. Date of termination means

          (a) if the Agreement is terminated by Vercillo's death, the date of
          his death, (b) if the Consultant's retention is terminated pursuant to
          subsection 7(iii)(a) above, thirty (30) days after Notice of
          Termination is given provided that Vercillo shall not have returned to
          the performance of his duties during the thirty (30) day period, (c)
          if the Consultant's retention is terminated pursuant to subsection
          7(iii)(c) above, the date specified in the Notice of Termination
          after the expiration of any cure periods, and (d) if the Consultant's
          retention is terminated for any other reason, the date on which Notice
          of Termination is given.


                              CONSULTING AGREEMENT
                                     Page 4

8.  Compensation Upon Termination or During Disability:

i.        Upon Vercillo's death, the Corporation shall pay to the person
          designated by Consultant in a notice filed with the Corporation or, if
          no person is designated, to Vercillo's estate as a lump sum death
          benefit, Consultant's full compensation for a period of six (6) months
          after the date of Vercillo's death. Upon full payment of amounts
          required to be paid under this subsection, the Corporation shall have
          no further obligation under this Agreement.

ii.       During any period that Vercillo fails to perform his duties under this
          Agreement as a result of incapacity due to physical or mental illness,
          Consultant shall continue to receive its full compensation until the
          Consultant's relationship is terminated pursuant to Section 7(ii) of
          this Agreement, or until Consultant shall receive a lump sum of six
          months' compensation.

iii.      If the Consultant's retention is terminated for Cause as defined in
          subsection 7(iii), the Corporation shall pay the Consultant its
          compensation through the date of termination at the rate in effect at
          the time Notice of Termination is delivered and the Corporation shall
          have no further obligation to Consultant under this Agreement.

iv.       If (a) in breach of this Agreement, the Corporation shall terminate
          the Consulting relationship other than pursuant to Sections 7(iii)(b)
          or 7(iii)(c) (it being understood that a purported termination
          pursuant to Sections 7(iii)(b) or 7(iii)(c) which is disputed and
          finally determined not to have been proper shall be a termination by
          the Corporation in breach of this Agreement), or (b) the Consultant
          shall terminate the relationship for Good Reason, then

          (1) The Corporation shall pay the Consultant its full compensation
          through the date of termination at the rate then in effect at the time
          Notice of Termination is given through the end of the Term;

          (2) In the event of a Change in Control as defined in Section 7(iv),
          the Corporation shall pay Consultant, in a lump sum, an amount equal
          to the greater of (a) twice the amount then due through the end of the
          Term; or (b) two times the annual compensation paid to Consultant.

          (3) In the event of a Change in Control of the Corporation as defined
          in Section 7(iv) above, the total number of outstanding unexercised
          options (warrants) granted to Consultant under this Agreement as well
          as any previous employment, consultant or other agreements, shall be
          doubled in quantity while retaining the original exercise price.

          (4) The Corporation shall pay all reasonable legal fees and expenses
          incurred by Consultant in contesting or disputing any such termination
          or in seeking to obtain or enforce any right or benefit in this


                              CONSULTING AGREEMENT
                                     Page 5

v.        Unless the Consultant is terminated for Cause, the Corporation shall
          maintain in full force and effect, for the continued benefit of
          Consultant for the greater of the remaining term of this Agreement or
          eighteen (18) months after termination of this Agreement, all health
          and hospitalization plans and programs in which Consultant was
          entitled to participate in immediately prior to the Date of
          Termination as defined in Section 4 of this Agreement, provided that
          Consultant's continued participation is possible under the general
          terms and provisions of the plans and programs. If Consultant's
          participation in any plan or program is barred, the Corporation shall
          arrange to provide the Consultant with benefits substantially similar
          to those which Consultant would otherwise have been entitled to
          receive under the plan and program from which his continued
          participation is barred.

9.  Savings Clause: The determination that any provision of this Agreement is
unenforceable shall not terminate this Agreement or otherwise affect the other
provisions of this Agreement, it being the intention of the parties hereto that
this Agreement shall be construed to permit the equitable reformation of such
provision to permit the enforcement thereof, if possible, and otherwise to
permit the enforcement of the remaining provisions of this Agreement as if such
unenforceable provision were not included herein.

10. Equitable Relief: The parties hereto agree and declare that legal remedies
may be inadequate to enforce the provisions of this Agreement and that equitable
relief, including specific performance and injunctive relief, may be used to
enforce the provisions of this Agreement.

11. Notices: Any notice required or permitted to be given under this Agreement
shall be in writing and shall be deemed to have been given and received on the
date when personally delivered or deposited in the United States Mail,
registered postage prepaid, addressed:

     a. if to the Corporation to: Mr. Ilia Lekach Parlux Fragrances, Inc. 3725
     S.W. 30th Avenue Fort Lauderdale, FL 33312

     b. if to the Consultant or Vercillo to: Mr. Albert Vercillo 74 Summit Road
     Port Washington, NY 11050

or to such other address as the Corporation or the Consultant may designate in

12. Amendments: This Agreement may be amended or modified only by a writing.

13. Governing Law: This Agreement shall be governed and construed under the laws
of the State of Florida.

14. Entire Agreement: This Agreement constitutes the entire Agreement between
the Consultant, Vercillo and the Corporation, with respect to its subject
matter, and all prior and other agreements between them, oral or written
concerning the same subject matter are merged into this Agreement and thus


                              CONSULTING AGREEMENT
                                     Page 6

15. Survival of Covenants: Any of the provisions in this Agreement which would
by their terms continue after the termination of this Agreement shall be deemed
to survive such termination.

16. Assignability and Binding Effect: This Agreement shall be binding upon and
inure to the benefit of the Corporation and its successors and assigns. This
Agreement may not be assigned by either party without the written consent of the
other party hereto.

IN WITNESS WHEREOF, the parties have hereunto set their hands and seals as of
the date first written above.

                    PARLUX FRAGRANCES, INC.

                    By: /s/ Ilia Lekach
                           Ilia Lekach, Chief Executive Officer


                    By: /s/ Albert F. Vercillo
                            Albert F. Vercillo, President
                            and Albert F. Vercillo