EXHIBIT 10.6
CONDOR CONSULTING LLC
September 15, 2000
Clements Citrus Sales of Florida, Inc.
32C S.E. Osceola Street
Stuart, FL 34994
Clements Golden Phoenix Enterprises, Inc.
3135 S.W. Mapp Road
Palm City, FL 34990
Gentlemen:
Condor Consulting, LLC ("Condor") is pleased that we have been engaged to
assist Clements Citrus Sales of Florida, Inc. ("Clements") in connection with
certain import/export activities undertaken by Clements. Should Clements request
and Condor agree that additional services be performed in this or other matters,
then the terms of this engagement letter (the "Agreement") will govern such
additional services unless different terms are agreed upon by both parties in
writing.
1. Scope of Services.
(a) Marketing and Brand Awareness. Condor shall provide advise and
consultation to Clements regarding the implementation of a marketing and brand
awareness strategy for the exportation of certain Florida-grown citrus products
to the Asian Markets (as defined herein).
(b) Promotion and Event Planning. Condor shall provide consulting services
and operational assistance with respect to certain promotional events (such as
trade shows, industry related conferences, and in-store promotions) relating to
the introduction of Clements products to wholesale and retail consumers in the
Asian markets.
(c) Government Relations. Condor shall serve as the primary liaison between
Clements and any and all relevant governmental agencies with respect to the sale
and exportation of Clements citrus products to the Asian market.
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1001 CONNECTICUT AVENUE, N.W. * SUITE 1035 * WASHINGTON, D.C. 20036
TELEPHONE: (202) 828-0025 * FACSIMILE: (202) 789-4117 FIRM E-MAIL:
[email protected]
(d) Public Relations. At the request of Clements, Condor shall provide
corporate communication services with respect to Clements Asian import/export
activities in the Asian Markets. Notwithstanding the foregoing, condor shall not
be responsible for providing investor relations nor shareholder communication
services.
(e) Strategic Research and Analysis. Condor shall from time to time
undertake and provide relevant strategic research and analysis with respect to
the contemplated exportation of Clements products to the Asian markets.
(f) General Administrative and Operational Support. In connection with the
foregoing activities (subparagraphs a through c) Condor will provide general
administrative and operational support to Clements, as such support is deemed
reasonable by Condor.
Notwithstanding the foregoing, Condor shall not be required to provide
consulting or operational assistance services with respect to the distribution
of goods to be exported by Clements to the Asian Markets; provided, however,
that Condor may, at its sole discretion, elect to undertake any such consulting
or operational assistance services.
2. Exclusive Representation. During the term of this Agreement, Clements
shall not procure consulting and/or advisory services fro any of the Asian
Markets from any competitor of Condor, without Condor's prior written consent.
For purposes hereof, the term "Asian Markets" shall mean the following
countries: the People's Republic of China (including all special administrative
regions), Republic of China, Japan, Republic of the Philippines, Republic of
Singapore, Malaysia, Kingdom of Thailand, Republic of Indonesia, Socialist
Republic of Vietnam, Kingdom of Cambodia, Union of Burma, Lao People's
Democratic Republic, Republic of India, Islamic Republic of Pakistan, People's
Republic of Bangladesh, Commonwealth of Australia, and New Zealand (collectively
referred to as the "Asian Markets").
3. Non-Compete; Ownership. During the term of thi Agreement, Condor shall
refrain from providing consulting services (as contemplated under Section 1 of
this Agreement) to any Clements Competitor (hereinafter defined). The foregoing
restriction contained in this Section 3 shall be effective on the date of this
Agreement and shall remain in effect for an uninterrupted period of two (2)
years following the expiration of this Agreement, unless earlier terminated by
the written agreement of both parties. Any and all sales contracts and market
penetration information produced or obtained by Condor in conjunction with
Condor's performance under the terms of this Agreement shall remain the
exclusive property of Clements. In consideration of the restrictions contained
in this Section 3, Clements shall pay Condor a
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Termination Fee (as defined herein) in the event that this Agreement is
terminated by Clements prior to second (2nd) anniversary of the Commencement
Date ("Early Termination"). Such Termination Fee shall be fully due and payable
on the date of such Early Termination. For purposes hereof, the term
"Termination Fee" shall mean an amount equal to One-Hundred Thousand Dollars
($100,000) multiplied by the aggregate number of calendar months remaining under
the original term of this Agreement.
4. Staffing; Non-Solicitation. Condor's relationship to Clements shall be
that of an independent contractor. The personnel performing services during this
Agreement shall at all times be under Condor's exclusive direction and control.
With respect to the provision of services stated in this Agreement, Condor shall
report exclusively to an appointed representative of the Board of Directors of
Clements. During term of this Agreement and for a period of two years following
the second (2nd) anniversary of the Commencement Date, Clements shall not
directly or indirectly attempt to employ or seek to employ an person or entity
who is at that time employed or engaged by Condor (or any affiliate of Condor),
or otherwise directly or indirectly induce such person to leave his or her
employment or contractual relationship with Condor.
5. Fees. The hourly rates of consultants and othe members of our
professional staff provide the principal basis for calculating fees associated
with our provision of consulting services. Condor bases these rates on various
factors which include years of experience, specialization in training and
practice, and level of professional attainment. Condor's current hourly rates
for professional services range between $75 to $300. The current rate for Condor
consultants (such as Shelly Huang) is $125. The rate for Condor senior executive
consultants (such as Mr. Mok) is $300. Condor reviews these rates periodically
and makes the appropriate adjustments from time to time. Clements will be
responsible for the rates in effect at the times that services are provided.
6. Retainer. During the term of this Agreement, Clements shall pay Condor a
retainer in an amount equal to the minimum of One-Hundred Thousand Dollars
($100,000) per month (the "Retainer"). The Retainer for the first (1st) month
during the term of this Agreement shall be paid on the date hereof, and all
future payments shall be made on the first (1st) business day of each following
calendar month occurring during the term of this Agreement. Condor may, at its
sole discretion, apply its monthly fees and expenses against the Retainer. In
the event that the Retainer is insufficient to offset any such fees and expenses
("Outstanding Fees"), Clements shall make immediate payment on such Outstanding
Fees upon receipt of invoice issued by Condor. Any unused portion of Retainer
shall be carried forward and applied to future invoices, provided that Condor
may, at its sole discretion, apply any unused portion of the Retainer against
accrued fees and expenses that would be shown on a subsequent invoice.
7. Travel Expenses. Clements agrees to prepay Condor for the following
travel related expenses:
(a) Extended Travel. Condor consultants shall be entitled to executive
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accommodations when traveling more than Five Hundred (500) miles from
Washington, D.C. on behalf of Clements. Such executive accommodations include
first-class airfare on world- class airlines and lodging at five-star
international hotels.
(b) Domestic Travel. Condor consultants shall be entitled to business
accommodations when traveling less than Five Hundred (500) miles from
Washington, D.C. on behalf of Clements. Such business accommodations include
business-class airfare on world- class airlines and lodging at five-star
business hotels.
Prepayment of the foregoing expenses shall occur at least seven (7) days
prior to the anticipated travel assignment.
8. Invoices. Condor will invoice Clements for all professional services and
expenses incurred on a monthly basis. Clements agrees to make full payment on
any invoiced fees and expenses within five (5) business days of receipt of any
such invoice. Certain "costs and disbursements" represent out-of-pocket costs,
some represent an allocation of overhead costs associated with the items and
others represent a combination of both factors. Other than travel, lodging,
meals, and other expenses, all routine office administrative expenses
(photocopying, courier, etc.) will not be itemized. Clements agrees to reimburse
Condor for any such non-itemized expenses on a monthly basis, at an amount equal
to Five percent (5%) of the accrued consulting fees for any such monthly period.
9. Revenue Sharing. During the term of this Agreement, Clements shall pay
to Condor an amount equal to Five percent (5%) of the gross revenue derived from
the sale of citrus products by Clements to any purchaser operating in the Asian
Markets.
(a) Payments. Revenue sharing payments shall be made from Clements to
Condor on a quarterly basis, within thirty (30) days of the end of each calendar
quarter. Overdue payments shall accrue interest at the lesser of 1% per month or
the maximum allowable interest under applicable law, from due date until paid,
and the owing party shall pay the owed party's costs of collection (including
reasonable attorney's fees).
(b) Reporting. Official copies of quarterly reports shall be provided from
Clements to Condor within thirty (30) days of the close of the quarter.
(c) Audit Rights. Condor shall have the right, during normal business hours
and upon reasonable prior notice, to audit, using an independent accounting
firm, the records of Clements related to its performance under this Agreement
and all payments due hereunder in order to verify that Clements has paid the
correct amounts due pursuant to this Section 9. Any such audit will be conducted
at Condor's expense, unless the audit reveals and underpayment discrepancy of 2%
or more, in which case Clements shall bear the entire expense of such audit.
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10. Warrants. In consideration of the services to be performed by Condor
pursuant to the terms of this Agreement, Clements has agreed to grant Condor a
warrant to purchase One Hundred Thousand (100,000) shares of unrestricted,
fully-registered common stock of Clements Golden Phoenix Enterprises, Inc.
("CGPE") at a purchase price of $2.00 per share. Payment of the purchase price
is due in full upon exercise of all or any part of the warrant. Condor may elect
to make payment of the exercise price in cash or by check or by delivery to CGPE
of irrevocable instructions to pay the aggregate purchase price to CGPE from the
sales proceeds.
11. Term. The term of this Agreement shall commenc on the date hereof (the
"Commencement Date") and shall remain in effect for a period of two (2) years
following the Commencement Date. Either party has the right to terminate this
Agreement at any time with sixty (60) days written notice signed by both
parties.
12. Indemnification. Clements and CGPE (collectively referred to as the
"Indemnifying Party") shall and hereby agrees to defend, indemnify and hold
harmless Condor and each of its officers, directors, employees and agents (for
purposes hereof, each an "Indemnitee") against and in respect of any damages
arising out of, resulting from or based upon any claim based on the exportation
or sales citrus products to the Asian Markets, except to the extent the
Indemnitee's gross negligence or willful misconduct caused such loss, cost,
claims, lawsuits or demands for which the Indemnitee alleges that the
Indemnifying Party is responsible under this Section 12. The Indemnitee shall
cooperate in every reasonable matter with the defense or settlement of such
claim, demand, or lawsuit. The Indemnifying Party shall not be liable under this
Section 12 for settlement by the Indemnitee of any claim, demand or lawsuit
unless the Indemnifying Party has approved the settlement in advance or unless
the Indemnifying Party has approved the settlement in advance or unless defense
of the claim, demand or lawsuit has been tendered to the Indemnifying Party in
writing and the Indemnifying Party has failed promptly to undertake the defense.
The Indemnitee may participate in the defense of the matter, with counsel of the
choosing of the Indemnitee, at the cost of the Indemnifying Party.
13. Acknowledgments. Condor shall not be obligated to consider any notices
of dispute that are received after the date of this Agreement, with respect to
the amounts charged and the services performed by Condor prior to the date
hereof. Clements hereby waives any and all claims it may have against Condor
from all actions, causes of action, suits, accounts, contracts, damages, claims
and demands whatsoever, in law or equity, which Clements ever had, now has, and
hereafter may have against Condor prior to the date of this Agreement.
* * *
If the above terms of this engagement letter are acceptable, please
indicate your agreement by arranging for the enclosed copy of this letter to be
signed and returned to us, retaining this letter for your records. Facsimile
signatures are as effective as original signatures. This Agreement supercedes
any prior oral or written agreement between the parties.
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Respectfully,
CONDOR CONSULTING, LLC
/s/ Samuel T. Mok
Samuel T. Mok
Managing Director
Agreed to and accepted on September 15, 2000.
CLEMENTS CITRUS SALES OF FLORIDA, INC.
By:
/s/ Joseph R. Rizzuti
Joseph R. Rizzuti
Chairman of the Board
CLEMENTS GOLDEN PHOENIX ENTERPRISES, INC.
By:
/s/ Henry T. Clements
Henry T. Clements
C.E.O.
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