CONSULTING AGREEMENT
This Consulting Agreement (this "Agreement") is made this 1st day of
May 2000, by and between DAC Technologies Group International, Inc., with
offices at 3200 North Ocean Boulevard, Suite 1006, Fort Lauderdale, Florida
33308 ("Client ") and James R. Pledger, having his principal residence at 1681
Tyler Green Trail, Smyrna, Georgia 30080. ("Consultant").
WHEREAS, Consultant has experience in providing sales and marketing
information related to gun locks and their use in the firearms industry; and
WHEREAS, Client has retained and desires to continue to retain the
services of Consultant and Consultant desires to serve Client on the terms and
conditions set forth below.
NOW THEREFORE, in consideration of the mutual promises contained
herein, the benefits to be derived by each party hereunder, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
expressly acknowledged, Consultant and Client agree as follows:
A. Engagement. Client hereby engages Consultant to provide Client with
services (as defined below), effective as of May1, 2000, and continuing through
the Initial Consulting Period (as defined below).
B. Scope of Services to be Provided. Consultant hereby accepts the
engagement on the terms and conditions set forth in the Agreement and agrees to
provide the consulting services, which shall consist of but not be limited to:
a. Providing sales and marketing information related to
gun locks and their use in the firearms industry, and
b. Provide information on the use of firearms and
related devices by law enforcement, and
c. Assist Client with strategic planning for DAC, and
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d. Assist the President/CEO in the execution of DAC'S
business plan and other duties as requested
consistent with Consultant's other business
relationships.
C. Term. This Agreement shall have an initial term of one (1) year
commencing May 1, 2000, and ending May 1, 2001 (the "Initial Consulting
Period"); thereafter, this Agreement may be extended on a year to year basis
(the "Extension Period"), subject to mutually agreed upon compensation. Notice
to terminate shall be in writing and shall be delivered at least thirty (30)
days prior to the end of the Initial Consulting Period or any subsequent
Extension Period as provided herein. In the event of termination pursuant to
this Paragraph 3, neither party shall have any further rights nor obligation
hereunder after the effective date of termination, except that the obligation of
Client to pay fees earned and to reimburse costs and expenses of Consultant
incurred prior to the effective date of termination in performance of the
services shall continue until such fees, costs and expenses are paid in full by
Client.
D. Time and Effort of Consultant. Consultant shall devote that amount
of working time, as necessary, on a regular basis, either daily, weekly or
otherwise, as needed, to fulfill its obligations under this Agreement. The
particular amount of time may vary from day to day or week to week. Consultant
agrees that it will at all times, faithfully and to the best of its experience,
ability and talents, perform all the duties required of it under this Agreement.
E. Compensation. Compensation to be paid to Consultant for the services
provided under this Agreement shall be in the form of a grant of thirty-seven
thousand five hundred "free trading" shares of the Client's common stock
("Shares"), in lieu of cash, valued at this time at approximately 33 cents
($0.33).
On November 1, 2000, based upon continued performance and services to
Client pursuant to the terms of this agreement, Client will grant Consultant a
non-qualified stock option to purchase eighteen thousand seven hundred and fifty
shares of common stock at market price on that date. Said options will be
exercisable within five (5) years. Further, Client will grant Consultant, a
non-qualified stock option to purchase eighteen thousand seven hundred and fifty
shares of common stock at the market price on May 1, 2001, assuming renewal of
this contract. Said options are to be exercisable within five (5) years of the
grant date.
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F. Registration of Client's Shares. Immediately following the execution
date hereof, Client will register the Shares with the SEC under an S-8
registration statement. At Client's sole discretion, the Shares may be issued or
reserved for issuance prior to registration in reliance on exemptions from
registration provided by Section 4(2) of the Securities Act of 1933 (the "Act"),
Regulation D of the Act, and applicable state securities laws. Such issuance on
reservation shall be in reliance on representations and warranties of Consultant
set forth in Paragraph 14(C) below.
G. Costs and Expenses. Any necessary and reasonable business expenses
incurred by Consultant in carrying out the services set forth under this
Agreement with the prior written approval of Client shall be reimbursed by
Client within thirty (30) days written notice by Consultant. Unless otherwise
agreed and approved in writing in advance, all expenses, filing fees, copies and
mailing expenses incurred by Consultant performing the services under this
Agreement are the responsibility of Consultant.
H. Place of Services. The services provided by Consultant hereunder
will be performed primarily through Consultant's office, except as otherwise
mutually agreed by Consultant and Client. It is understood and expected that
Consultant may make contacts with persons and entities and perform services in
other locations as deemed appropriate and directed by Client.
I. Independent Contractor. Consultant will act as an independent
contractor in the performance of duties under this Agreement. Accordingly,
Consultant will be responsible for payment of all federal, state and local taxes
on compensation paid under this Agreement, including income and social security
taxes, unemployment insurance, and any other taxes or business license fees as
may be required.
J. No Agency Expressed or Implied. This Agreement neither expressly nor
impliedly creates a relationship or principal agent between Consultant and
Client. Consultant is not authorized to enter into any agreements on behalf of
Client. Client expressly retains the right to approve, in its sole discretion,
any and all transactions introduced by Consultant (if any), and to make all
final decisions with respect to activities undertaken by Consultant related to
this Agreement.
K. Non Disclosure and Non-use of Confidential Information. Consultant
agrees that non-public information concerning the finances, plans, strategies
and overall business operations of Client may be highly confidential and
proprietary to Client ("Confidential Information"). This Confidential
Information includes, but is not limited to, the following:
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a. Non-public information related to the business
operations, including financial and accounting
information, plans of operations, and potential
mergers or acquisitions prior to the public
announcement of Client;
b. Customer lists, call lists and other non-public
customer data of Client;
c. Memoranda, notes, records, sketches, plans,
drawings and any media used to store, communicate,
transmit, record or embody such Confidential
Information
of Client;
d. Information treated, marked or otherwise
identified by Client as confidential or as trade
secrets. Consultant acknowledges that such
Confidential Information represents legitimate,
valuable and protected interest of Client and gives
Client a competitive advantage, which would otherwise
be lost if the Confidential Information was
improperly disclosed. Consultant further acknowledges
that unauthorized or improper disclosure or use of
Confidential Information would cause Client
irreparable harm and injury. Consultant therefore
agrees that, in perpetuity or for as long as the
Confidential Information remains confidential, it
will not disclose or threaten to disclose the
Confidential Information to any person, partnership,
company, corporation, or to any other business or
governmental organization or agency without the
express written consent of Client, as the case may
be. Consultant further agrees not to use or threaten
to use the Confidential Information in any way that
is not specifically authorized by, or otherwise
contrary to the interest of Client, as the case may
be. Consultant agrees that unauthorized disclosure or
use of Confidential Information constitutes
misappropriation of trade secrets and Confidential
Information. Consultant further agrees that all
ownership rights to the Confidential Information are
held or retained by Client as the case may be, and
that no right of ownership shall pass to Consultant
by virtue of this Agreement or the services provided
hereunder.
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L. Termination.
a. Termination for Cause. The Client, may at its
option, terminate this Agreement by giving written
notice of termination to Consultant without prejudice
to any other remedy to which the Client may be
entitled either at law, in equity, or under this
Agreement, if Consultant:
i. Neglects or willfully breaches the duties
that Consultant is required to perform under
the terms of this Agreement;
ii. Fails to promptly comply with and carry out
reasonable and appropriate directives of
Client's Board of Directors;
iii. Commits any dishonest or unlawful act, in
the judgment of Client's Board of Directors,
which judgment is based on reasonable legal
standards;
iv. Engages in any conduct which disrupts the
business of Client or any entity affiliated
with Client;
v. If found to have engaged in such conduct,
prior to or subsequent to the date hereof,
that may preclude client from obtaining any
local, state or federal regulatory approval
of Client's licenses or application of any
required in Client's business.
b. Termination Other Than For Cause. This Agreement
shall terminate immediately on the occurrence of any
the following events:
i. The occurrence of circumstances, in the
judgment of Client's Board of Directors,
that makes it impracticable for Client to
continue in its present line(s) of business;
ii. The decision of and upon notice by
Consultant to voluntarily terminate this
Agreement;
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iii. If either party files a petition in a court
of bankruptcy or is adjudicated as bankrupt;
iv. If either party institutes or has instituted
against it any bankruptcy proceeding for
reorganization for rearrangement of the
party's financial affairs;
v. If either party has a receiver of the
party's assets or property appointed because
of insolvency;
vi. If either party makes a general assignment
for the benefits of creditors; or
vii If either party otherwise becomes insolvent
or unable to timely satisfy all obligations
in the ordinary course of business.
c. Effect of Termination on Compensation. In
the event of the termination of this Agreement for
other than cause prior to the completion of the
Initial Consulting Period, Consultant shall be
entitled to the compensation earned and to the rights
under the option vesting prior to the date of
termination as provided for in this Agreement,
computed pro rata up to and including that date.
Consultant shall be entitled to no further
compensation after the date of termination.
M. Representations and Warranties of Client. Client represents and
warrants to Consultant that:
a. Corporate Existence. Client is a corporation duly
organized, validly existing and in good standing
under the laws of the State of Florida with corporate
power to own property and carry on its business as it
is now being conducted.
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b. Financial Information. Client has or will cause to
be delivered concurrently with the execution of this
Agreement, copies of the Disclosure Documents which
accurately sets forth the financial condition of
Client as of the respective dates of such documents.
c. No Conflict. This Agreement has been duly executed
by Client and the execution and performance of this
Agreement will not violate or result in a breach of,
or constitute a default in any agreement, instrument,
judgment, decree or order to which Client is a party
or to which Client is subject, nor will such
execution and performance constitute a violation or
conflict of any fiduciary duty to which Client is
subject.
d. Full Disclosure. The information concerning Client
provided to Consultant pursuant to this Agreement is,
to the best of Client's knowledge and belief,
complete and accurate in all material respects and
does not contain any untrue statement of a material
fact or omit to state a material fact required to
make the statements made, in light of the
circumstances under which they were made, not
misleading.
e. Date of Representations and Warranties. Each of
the representations and warranties of Client set
forth in this Agreement is true and correct at and as
of the date of execution of this Agreement.
N. Representations and Warranties of Consultant. Consultant represents
and warrants to Client that:
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a. Prior Experience. Consultant has experience in the
area of sales and marketing of gun locks and
firearms, and the use of firearms and related devices
used by law enforcement.
b. No Conflict. This Agreement has been duly executed
by Consultant and the execution and performance of
this Agreement will not violate, or result in a
breach of, or constitute a default in any agreement,
instrument, judgment, decree or order to which
Consultant is a party or to which Consultant is
subject, nor will such execution and performance
constitute a violation or conflict of any fiduciary
duty to which Consultant is subject.
c. Registration and/or Exemption of the Shares.
Consultant understands and acknowledges that any
shares issued or reserved for issuance prior to
registration will be so issued or reserved in
reliance on the exemptions from registration provided
by Section 4(2) of The Act, Regulation D and
applicable state securities laws. Representation and
warranties by Consultant in this Paragraph 14(c) will
be used and relied upon by Client to determine
whether any issuance of the Shares may be made to
Consultant pursuant to Section 4(2) of The Act and
Regulation D and applicable state securities laws,
and Consultant will notify Client immediately of any
material changes to the representations made herein.
In this regard, Consultant represents and warrants
that:
i. Consultant has been furnished with a copy of
Client's most recent Annual Report on Form
10-KSB-A and all reports or documents
required to be filed under Sections 13(a),
14(a) and 15(d) of the Securities and
Exchange Act of 1934, as amended, including,
but not limited to quarterly reports on Form
10-QSB, current reports on Form 8-K and
proxy statements (the "Disclosure
Documents"), if any.
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ii Consultant has had the opportunity to ask
questions and receive answers concerning the
terms and conditions of the Shares to be
issued and/or reserved for issuance, and to
obtain any additional information which
Client possesses or can acquire with out
unreasonable effort or expense necessary to
verify the accuracy of information furnished
under Paragraph 14(c)(i) of this Agreement.
iii By reason of Consultant's knowledge and
experience, Consultant is capable of
evaluating the merits and risks of this
transaction and in bearing the economic
risks of an investment in the Shares and
Client in general, and fully understands the
speculative nature of such securities and
the possibility of such loss.
iv The present financial condition of
Consultant is such that Consultant is not
under any present or contemplated future
need to dispose of any portion of the
Shares, if any, to satisfy an existing or
contemplated undertaking, need or
indebtedness.
v Consultant is fully aware that any Shares
issued to Consultant prior to registration
will be Restricted Securities as defined by
Rule 144 of the Act and that any resale of
such securities by Consultant may be
governed by Rule 144. Consultant is further
aware of the specific restrictions on resale
of such securities contained in Rule 144.
vi Consultant will not sell, transfer or
otherwise dispose of any Shares issued or
reserved for issuance hereunder prior to
registration except in compliance with the
Act.
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vii Any and all certificates representing the
Shares issued prior to registration of such
Shares and any and all securities issued in
replacement hereof or in exchange,
therefore, shall bear the following or
comparable legend:
The Shares represented by this
Certificate have not been registered
under the Securities Act of 1933
(the "Act") and are "restricted
Securities" as that term is defined
in Rule 144 under the Act. The
shares may not be offered for sale,
sold or otherwise transferred except
pursuant to an effective
registration statement under the Act
or pursuant to an exemption from
registration under the Act, the
availability of which is to be
established to the satisfaction of
the Company.
d. Date of Representations and Warranties. Each of
the representations and warranties of Consultant set
forth in this Agreement is true and correct at and as
of the date of execution of this Agreement.
O. Indemnification. Client and Consultant agree to indemnify, defend
and hold each other harmless from and against all demands, claims, actions,
losses, damages, liabilities, costs and expenses, including without limitation,
interest, penalties and attorney's fees and expenses asserted against or imposed
or incurred by either party of or resulting from a breach of any representation,
warranty, covenant, condition or agreement of the other party to this Agreement.
P. Agreement Does Not Constitute Corrupt Practice - Domestic or
Foreign.
Any and all payments under this Agreement constitute compensation for services
performed and this Agreement and all payments and the use of payments by
Consultant do not and shall not constitute an offer, payment or promise or
authorization of payment of any money or gift to an official or political party
of, or candidate for political office within or outside the United States. These
payments may not be used to influence any act or decision of any official, party
or candidate to use his/her/its influence with a government to assist Client in
obtaining, retaining or directing business to Client, or any office or employee
of a government or any person acting in an official capacity for or on behalf of
any government; the term "government' includes any department, agency or
instrumentality of a government.
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Q. Inside Information - Securities Laws Violations. In the course of
the performance of his duties, Consultant may become aware of information which
may be considered "Inside Information" within the meaning of the Federal
Securities Laws, Rules and Regulations. Consultant acknowledges that its use of
such information to purchase or sell securities of Client, or its affiliates, or
to transmit such information to any other party with a view to buy, sell or
otherwise deal in the securities of Client or its affiliates, is prohibited by
law and would constitute a breach of this Agreement and notwithstanding the
provision of this Agreement, will result in the immediate termination of the
Agreement. Consultant agrees to abide by standards of the corporation pertaining
to Inside Information as provided by Client and stated above.
R. Non-Exclusive Services. Client agrees that the services to be
provided herein are not exclusive. Consultant shall be free to render services
of the same nature or of a similar nature to any other individual or entity
during the term hereof, without the written consent of Client. Consultant
understands and agrees that Client shall not be prevented or barred from
retaining other persons or entities to provide services of the same nature or
similar nature as those provided by Consultant.
S. Specific Performance. Consultant and Client acknowledge that in the
event of a breach of this Agreement by either party, money damages would be
inadequate and the non-breaching party would have no adequate remedy at law.
Accordingly, in the event of any controversy concerning the rights or
obligations under this Agreement, such rights or obligations shall be
enforceable in a court of equity by a decree of specific performance. Such
remedy, however, shall be cumulative as non-exclusive and shall be in addition
to any other remedy to which the parties may be entitled.
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T. Miscellaneous.
a. Subsequent Events. Consultant and Client each
agree to notify the other party if, subsequent to the
date of this Agreement, either party incurs
obligations which could compromise their efforts and
obligations under this Agreement.
b. Amendment. This Agreement may be amended or
modified at any time and in any manner only by an
instrument, in writing, executed by the parties
hereto.
c. Further Actions and Assurances. At any time and
from time to time, each party agrees, at its or their
expense, to take actions and to execute and deliver
documents as may be reasonably necessary to
effectuate the purpose of this Agreement.
d. Waiver. Any failure of any party to this Agreement
to comply with any of its obligations, agreements or
conditions hereunder may be waived in writing by the
party to whom such compliance is owed. The failure of
any party to this Agreement to enforce at any time
any of the provisions of this Agreement shall in no
way be construed to be a waiver of any such provision
or a waiver of the right of such party thereafter to
enforce any such provision. No waiver of any breach
of or non-compliance with this Agreement shall be
held to be a waiver of any other or subsequent breach
or non-compliance.
e. Assignment. Subject to Paragraph 20(o) below,
neither this Agreement nor any right created by it
shall be assignable by either party without the prior
written consent of the other.
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f. Notices. Any notice or other communication
required or permitted by this Agreement must be in
writing and shall be deemed to be properly given when
delivered in person to an officer of the other party,
when deposited in the United States mail for
transmittal by certified or registered mail, postage
prepaid, or when deposited with a public telegraph
company for transmittal, or when sent by facsimile
transmission charges prepaid, provided that the
communication is addressed:
i. In the case of Consultant:
James R. Pledger
1681 Tyler Green Trail
Smyrna, Georgia 30080
ii In the case of Client:
DAC Technologies Group International, Inc.
3200 North Ocean Boulevard
Suite 1006
Fort Lauderdale, Florida 33308
or to such other person or address designated by
Client or Consultant to receive notice.
g. Headings. The paragraph and subparagraph heading
in this Agreement are inserted for convenience only
and shall not affect in any way the meaning or
interpretation of this Agreement.
h. Governing Law. This Agreement was negotiated and
is being contracted for in the State of Florida and
shall be governed by the laws of the State of
Florida, notwithstanding any conflict of law
provision to the contrary.
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i. Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each of
which shall be deemed an original, but all of which
together shall constitute one and the same
instrument.
j. Binding Effect. This Agreement shall be binding
upon the parties hereto and inure to the benefit of
the parties, their respective heirs, administrators,
executors, successors and assigns.
k. Entire Agreement. This Agreement contains the
entire agreement between the parties hereto and
supersedes any and all prior agreements, arrangements
or understandings between the parties relating to the
subject matter of this Agreement. No oral
understandings, statements, promises or inducements
contrary to the terms of this Agreement exist. No
representations, warranties, covenants or conditions,
express or implied, other than as set forth herein,
have been made by any party.
l. Severability. If any part of this Agreement is
deemed to be unenforceable, the balance of the
Agreement shall remain in full force and effect.
m. Facsimile Counterparts. A facsimile, telecopy, or
other reproduction of this Agreement may be executed
by one or more parties hereto and such executed copy
may be delivered by facsimile or similar
instantaneous electronic transmission device pursuant
to which the signature of or on behalf of such party
can be seen, and such execution and delivery shall be
considered valid, binding and effective for all
purposes. At the request of any party hereto, all
parties agree to execute an original of this
Agreement as well as any facsimile, telecopy or other
reproduction hereof.
n. Termination of Any Prior Agreements. Effective the
date hereof, all prior rights of Consultant relating
to the accrual or payment of any form of compensation
or other benefits from Client based upon any
agreements other than this Agreement, whether written
or oral, entered into prior to the date hereof, are
hereby terminated.
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o. Consolidation or Merger. Subject to the provisions
of Paragraph 12 hereof, in the event of a sale of the
stock, or substantially all of the stock of Client,
or consolidation or merger of Client with or into
another corporation or entity, or the sale of
substantially all of the operating assets of the
Client to another corporation, entity or individual,
Client may assign its rights and obligations under
this Agreement to its successor-in-interest and such
successor-in-interest shall be deemed to have
acquired all rights and assumed all obligations of
Client hereunder; provided, however, that in no event
shall the duties and services of Consultant provided
for in Paragraph 2, hereof, or the responsibilities,
authority or powers commensurate therewith, change in
any material respect as a result of such sale of
stock, consolidation, merger or sale of assets.
p. Time is of the Essence. Time is of the essence of
this Agreement and of each and every provision
hereof.
q. Arbitration. Except for injunctive relief or
specific performance contemplated by Paragraph 19,
any dispute, claim or controversy arising from this
Agreement shall be settled in binding arbitration
before the Commercial Rules of the American
Arbitration Association. Venue for such proceeding
shall be in Fort Lauderdale, Florida.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the
date above written.
CONSULTANT:
James R. Pledger
By:/s/ James R. Pledger
--------------------
James R. Pledger
CLIENT:
DAC Technologies Group International, Inc.
By: /s/ David A. Collins
--------------------
David A. Collins, President
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