Consulting Agreement - Computer Products & Services Inc. and Steven A. Newman
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT is made and entered into effective the 1st day of
January,1996, by and between COMPUTER PRODUCTS & SERVICES, INC., a corporation
organized under the laws of the Commonwealth of Virginia hereinafter referred
to as "CLIENT"), and STEVEN A. NEWMAN hereinafter referred to as
"CONSULTANT").
INTRODUCTION
A. CLIENT is engaged in the business of developing, manufacturing and
marketing computer products including hardware, software and services.
B. CLIENT believes it essential to obtain during the term of this
Agreement the ongoing services of CONSULTANT and CONSULTANT has agreed
to provide his services during the term of this Agreement for the
benefit of the CLIENT.
C. By entering into the Agreement hereinafter set forth, the parties
hereto desire to memorialize their full agreement with respect to the
terms and conditions of the services to be provided by CONSULTANT.
AGREEMENT
NOW, THEREFORE, for good and lawful consideration, the receipt of which is
hereby acknowledged, the parties hereto agree as follows:
1. Engagement and Duties. CLIENT hereby engages CONSULTANT and CONSULTANT
hereby accepts such engagement, to provide consulting, negotiating and
advisory services including, but not limited to identification and
contracting of strategic partners, identification and hiring of
employees, financings, and general management, upon and subject to the
terms and conditions set forth herein. CONSULTANT shall perform all
duties as may, from time to time, be assigned to him by the Board of
Directors of CLIENT. During the term of this Agreement, CONSULTANT
shall not engage directly or indirectly in any activities comparative
with any business which is now or which hereafter may be conducted by
CLIENT. It is agreed that CONSULTANT's position with Tech International
Virginia, Inc. does not violate the terms of this Agreement.
2. Term. The term of CONSULTANT's engagement shall be for a period of
three (3) years commencing January 1, 1996 and terminating December 31,
1998. The term of this Agreement and of the engagement of CONSULTANT
hereunder shall be automatically renewed for an additional three (3)
year period on terms no less favorable to CONSULTANT than those set
forth in this Agreement, unless either party gives the other party
written notice of termination of this Agreement at least sixty (60)
days prior to the termination of each term of this Agreement.
3. Consideration.
a. As consideration and compensation for CONSULTANT's services to be
performed hereunder, CLIENT shall pay to CONSULTANT an annual
minimum retainer of One Hundred Thousand Dollars ($100,000) per
year payable in equal monthly payments or as invoiced by
CONSULTANT. CONSULTANT shall charge CLIENT for CONSULTANT's
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services as against the minimum annual retainer fee the sum of
One Thousand Dollars ($1,000) per day or Five Thousand Dollars
($5,000) per week. The minimum annual retainer hereunder and the
daily and weekly charges of CONSULTANT shall be increased each
year during the term of this Agreement by an amount no less than
the U.S. Consumer Price Index plus two percentage (2%) points.
b. As additional consideration for CONSULTANT's services, CLIENT
agrees to pay CONSULTANT an annual cash bonus in an amount of no
less than one percent (1%) of CLIENT's pretax income for each
calendar year. Pretax income, for purposes of the initial term of
this Agreement, shall mean the consolidated income before taxes
as presented in the CLIENT's audited financial statements for
each fiscal year, increased by research and development expenses
and expenses related to this or other bonus or incentive plans,
including noncash charges related to warrants, stock options and
the alike. For purposes of any additional terms of this
Agreement, pretax income shall mean the consolidated income
before taxes as presented in CLIENT's audited financial
statements for each fiscal year, increased by expenses related to
this or other bonus or incentive plans, including non-cash
charges related to warrants, stock options and the like. The
total cash bonus paid hereunder will be supplemented by the grant
of a fully vested option with a ten (10) year life to purchase
shares of CLIENT's common stock at a price per share equal to the
average equivalent sales price per share of CLIENT's common stock
during the ninety (90) day period immediately preceding the
effective date of this Agreement. The number of CLIENT's shares
of common stock granted to CONSULTANT as part of this option
shall be determined by dividing the cash bonus earned by the
CONSULTANT by the per share stock option price. In this regard,
in the event of a reorganization, recapitalization, stock split,
stock dividend, combination of shares, merger, consolidation,
rights offering or any other change in the corporate structure or
shares of CLIENT, or any of its subsidiaries, the number and kind
of shares subject to this bonus and the price thereof shall be
proportionately adjusted so as to give CONSULTANT the benefit of
his agreement to receive the stock at the stock sales price as
set forth above.
4. Expenses. During the term of this Agreement, CLIENT agrees to
reimburse CONSULTANT for reasonable and necessary expenses incurred by
CONSULTANT in the performance of his duties under this Agreement.
5. Change in Control. Should a change in control of CLIENT take place,
this Agreement shall remain binding on CLIENT or its successor in
interest. A "Change in Control" of CLIENT for purposes of this
Agreement shall mean someone other than EDWARD NEWMAN serving as
CLIENT's Chairman of the Board of Directors, President or Chief
Executive Officer, However, in the event of a change in control,
CONSULTANT, in his sole discretion, shall have the right to terminate
this Agreement and shall be entitled to severance pay equal to the
greater of the amount received by CONSULTANT during the previous two
(2) calendar years of the term of this Agreement, pursuant to Section
3, above, or two (2) times the amount of compensation due CONSULTANT
pursuant to Section 3, above, at the end of the then current fiscal
year.
6. Notices. All notices, requests and other communications hereunder
shall be in writing and shall be deemed to have been given only if
mailed, certified return receipt requested, or if sent by Federal
Express or other well recognized private courier ("Courier") or if
personally delivered to, or if sent by fax with the original thereof
sent by Courier to:
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If to the CLIENT: Computer Products & Services, Inc.
12701 Fair Lakes Circle, Ste 550
Fairfax, VA 22033
Fax (703) 631-7070
If to CONSULTANT: Steven A. Newman
303 Avenida Cerritos
Newport Beach Ca 92660
Fax (714) 760-3865
All notices, requests and other communications shall be deemed received
on the date of acknowledgment or other evidence of actual receipt in
the case of certified mail, Courier delivery or personal delivery or,
in the case of fax delivery, upon the date of fax receipt provided that
the original is delivered within two (2) business days. Any party
hereto may designate different or additional parties for the receipt of
notice, pursuant to notice given in accordance with the foregoing.
7. Attorneys' Fees. In the event of default hereunder, the defaulting
party shall be liable to the non-defaulting party for all expenses and
costs incurred by the non-defaulting party in protecting or enforcing
its right hereunder including but not limited to reasonable attorneys'
fees and costs.
8. Subject Headings. The subject headings of the paragraphs of this
Agreement are included solely for the purposes of convenience and
reference only, and shall not be deemed to explain, modify, limit,
amplify or aid the meaning, construction or interpretation of any of
the provisions of this Agreement.
9. Amendments. No supplement, modification or amendment of this Agreement
shall be binding or enforceable unless executed in writing by the
parties hereto.
10. Entire Agreement and Waiver. This Agreement contains the entire
agreement between the parties hereto concerning the subject matter
hereof and supersedes all prior and contemporaneous agreements,
arrangements, negotiations and understandings between the parties hereto
relating to the subject matter hereof. There are no other
understandings, statements, promises or inducements, oral or otherwise,
contrary to the terms of this Agreement. No representations, warranties,
covenants or conditions, express or implied, whether by statute or
otherwise, other than as set forth herein, have been made by any party
hereto. No waiver of any term, provision or condition of this Agreement,
whether by conduct or otherwise, in any one or more instances, shall be
deemed to be, or shall constitute, a waiver of any other provision
hereof, whether or not similar, nor shall such waiver constitute a
continuing waiver, and no waiver shall be binding unless executed in
writing by the party making the waiver.
11. Miscellaneous. Nothing in this Agreement, whether express or implied,
is intended to confer upon any person other than the parties hereto and
their respective heirs, representatives, successors and permitted
assigns, any rights or remedies under or by reason of this Agreement.
This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective heirs, representatives,
successors and permitted assigns. 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.
This Agreement shall be governed by and construed and enforced in
accordance with and shall be subject to the laws of the Commonwealth of
Virginia. Each party
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agrees to execute and deliver, at any time and from time to time, upon
the request of the other party, such further instruments or documents as
may be necessary or appropriate to carry out the provisions contained
herein, and to take such other action as the party may reasonably request
to effectuate the provisions of this Agreement. Should any part, term or
provision of this Agreement be declared by a court of competent
jurisdiction to be invalid, void or unenforceable at law or in equity, it
is the express intention of the parties hereto that such part, term or
provision shall be construed in such manner as to provide for the
enforcement thereof to the maximum extent and in the broadest scope
permitted under law and all remaining parts, terms and provisions hereof
shall remain in full force and effect and shall in no way be invalidated,
impaired or affected thereby. The parties agree that each party and its
counsel have reviewed and revised this Agreement and that any rule of
construction to the effect that ambiguities are to be resolved against the
drafting party shall not apply in the interpretation of this Agreement.
Time is hereby declared to be of the essence of each provision of this
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Consulting Agreement
as of the date set forth at the beginning.
CLIENT: COMPUTER PRODUCTS & SERVICES, INC.,
A VIRGINIA CORPORATION
By:
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CONSULTANT:
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STEVEN A. NEWMAN
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