CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT, executed as of the 1st day of April, 2000, is
hereby made between JD AMERICAN WORKWEAR, INC. a Delaware corporation having
offices at 46 Old Flat River Road, Coventry, Rhode Island 02816 (hereinafter
"JDAW"), and Richard Sullivan having an address at 307 Clinton B. Fiske Avenue,
Staten Island, New York 10314 (hereinafter "Consultant").
WITNESSETH:
WHEREAS, JDAW desires to obtain certain financial consulting services, and
Consultant is willing to provide such services in accordance with the terms and
conditions set forth below,
NOW, THEREFORE, in consideration of the mutual covenants and undertakings
herein contained, the parties hereto agree to establish such client/consultant
relationship in accordance with the following terms and conditions set forth
below:
1. SCOPE OF SERVICES PROVIDED
1.1 Consultant is, in conjunction with the services of other
consultants, to provide certain management consulting services to JDAW in
accordance with the terms and conditions hereof (the "Services"), which shall
include, but not necessarily be limited to, the following:
(i) assist in the development and implementation of a
comprehensive Business Plan for the Company, and to assist in
formulating goals and planning for meeting the Company's
goals; and
(ii) develop a comprehensive Program of Risk Management including
policies and procedures designed to minimize the likelihood
and/or effects of claims and losses and to implement a safety
program to reduce claims and losses
(iii) develop a Merger or Acquisition Plan with the objectives of
broadening product line, increasing customer base and improve
distribution channels, and to evaluate potential acquisitions.
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(iv) assist in the preparation and use of Budgets and Forecasts
with the objective of improving profitability by planning the
use of Company resources such as materials, labor, facilities
and capital.
(v) assist in human resource and operations management, staffing
and technical recruiting, develop a comprehensive policy and
procedures manual and employee handbook.
(vi) assist the Company in exploring new sources of raw materials
and or sources of manufacturing.
1.2 The Consultant shall be obligated to render the Services upon the
request of JDAW, in good faith, but shall not be obligated to expend any
specified amount of time in so doing. Consultant may work according to its own
methods and keep its own hours. JDAW shall not control the manner in which
Consultant works while performing under this Agreement. Notwithstanding the
foregoing, inasmuch as the Board of Directors of JDAW has retained the
Consultant to provide significant services and has a duty to the stockholders of
JDAW to supervise the operations of JDAW; Consultant accordingly agrees to
report to and be promptly responsive to redirection, questions, concerns or
comments raised by the Board regarding the Services.
1.3 Consultant shall be responsible for the payment of all fees and
expenses of any persons Consultant procures to assist it in performance of the
Services. Any such assistants shall be compensated solely by Consultant and are
deemed employees solely of Consultant. Consultant agrees to be solely
responsible for any actions of its assistants, agents or other employees.
Consultant agrees to comply with all applicable Federal, state and local laws,
regulations and ordinances.
1.4 JDAW recognizes and confirms that, in advising JDAW and in
fulfilling its responsibilities under this Agreement, the Consultant will use
and rely on data, material and other information furnished to the Consultant by
JDAW. JDAW acknowledges and agrees that in performing the Services under this
Agreement, the Consultant may rely upon data, material and other information
supplied by JDAW without independently verifying the accuracy, completeness or
veracity of the same. Accordingly, JDAW expressly agrees that all data, material
and other information furnished to the Consultant by JDAW shall not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
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2. PAYMENT FOR SERVICES
2.1 As full compensation for the performance of the Services JDAW
shall:
(i) RTS shall be paid $500 per month commencing on the date first
set forth above plus reimbursement for all out of pocket costs
in accordance with paragraph 2.2
(ii) JDAW will issue to Consultant the option to purchase 100,000
warrants of Open Door Online at a price of $.20 per warrant
for up to two years. Warrants will have piggyback registration
rights.
2.2 REIMBURSEMENT: RTS shall be reimbursed by client for disbursements
(out of pocket expense) of RTS in providing the services set forth in paragraph
1 above, for the benefit of client which include but are not limited to: travel,
hotel costs, copywriting, layout, art and photographic services, mechanicals,
printing, duplication and reproduction costs, advertising costs, messenger and
delivery services, telephone toll charges, fax, postage, newswire, on-line
computer news service and any other necessary incidental expenses and any other
relates expenses. Monthly expenses not to exceed $250 per month unless approved
by client.
2.3 No fringe benefits or employee benefits shall be paid or given to
Consultant. Consultant shall be solely responsible for the payment of any and
all Federal, state and local income taxes, Social Security taxes and
unemployment taxes that may be generated hereunder. JDAW shall not withhold any
such items and bears no responsibility for any such payments. The Consultant
shall perform the Services hereunder as an independent contractor and not as an
employee of JDAW or an affiliate thereof. It is expressly understood and agreed
to by the parties hereto that the Consultant shall not have authority to act
for, represent or bind JDAW or any affiliate thereof in any manner.
3. TERM
3.1 Consultant shall commence providing the services contemplated
hereunder as of the date hereof and shall continue providing such services until
the earlier of (i) April 1, 2001 or (ii) such time as this Agreement is earlier
terminated pursuant to the provisions of Section 3.2 hereof.
3.2 Either party hereto shall have the option to terminate this
Agreement at any time without cause upon thirty (30) days prior notice to the
other party. The right to terminate this Agreement as provided for in this
Section 3.2 shall be in addition to and not in lieu of any right either party
hereto may have against the other for breach of this Agreement.
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4. REPRESENTATIONS AND WARRANTIES
4.1 JDAW represents and warrants to the Consultant as follows:
(i) ORGANIZATION AND STANDING OF JDAW. JDAW is a corporation duly
organized, validly existing and in good standing under the
laws of the State of Delaware and has all requisite power and
authority to enter into this Agreement.
(ii) AUTHORIZATION. JDAW has all requisite power and authority to
execute, deliver and perform this Agreement and to carry out
and consummate the transactions contemplated hereby, provided
with respect to the issuance of the Plan Shares it obtains all
required approvals from federal and state securities
authorities required to be obtained by it and provided that
the representations and warranties of the Consultant set forth
in this Agreement are true and correct. The execution,
delivery and performance of this Agreement by JDAW has been
duly authorized by all requisite corporate action, and this
Agreement has been duly executed and delivered by JDAW and
constitutes the legal, valid and binding obligation of JDAW,
enforceable against JDAW in accordance with its terms, subject
as to enforcement of remedies to applicable bankruptcy,
insolvency, reorganization or similar laws affecting generally
the enforcement of creditors' rights and the relief of
debtors.
(iii) REPORTING COMPANY STATUS. JDAW has a reporting obligation
pursuant to Section 12(g) or 15(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act") and JDAW is
current in the filing of all periodic reports . under the
Exchange Act.
4.2 The Consultant represents and warrants to JDAW as follows:
(i) ORGANIZATION AND STANDING OF CONSULTANT. Consultant is a
company duly organized, validly existing and in good standing
under the laws of Massachusetts and has all requisite power
and authority to enter into this Agreement.
(ii) AUTHORIZATION. The Consultant has all requisite power and
authority to enter into this Agreement and to comply with the
provisions hereof. The Consultant has all requisite power and
authority to execute, deliver and perform this Agreement and
to consummate the transactions contemplated hereby. The
execution, delivery and performance of this Agreement by the
Consultant has been duly authorized by all necessary corporate
action, and the Agreement has been duly executed and delivered
by the Consultant. This Agreement constitutes the legal, valid
and binding obligation of the Consultant enforceable against
the Consultant in accordance with its terms, subject as to
enforcement of remedies to applicable bankruptcy, insolvency,
reorganization or similar laws affecting generally the
enforcement of creditors' rights and the relief of debtors.
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(iii) NONCONTRAVENTION. The execution, delivery and performance of
this Agreement by the Consultant will not violate any
provision of law, any rule or regulation of any governmental
authority, or any judgment, decree or order of any court
binding on the Consultant, and will not conflict with or
result in any breach of any of the unwaived terms, conditions
or provisions or constitute a default under, or result in the
creation of any lien, security interest, charge or encumbrance
upon any of the Consultant's properties or assets, or any
material indenture, mortgage, lease, agreement or other
instrument to which the Consultant is a party.
5. DISCLOSURE OF INFORMATION
Upon completion of Consultant's work hereunder, all of its documents,
records, notebooks and other work product containing confidential information
and all copies thereof, will be left with JDAW. Consultant agrees not to
disclose to anyone any confidential information obtained while providing the
Services hereunder, unless Consultant obtains the prior written approval of
JDAW's Board of Directors. Notwithstanding anything herein to the contrary,
regardless of the circumstances under which this Agreement is terminated there
shall be no restrictions on the engagements accepted by Consultant after the
term of this Agreement. Consultant acknowledges and agrees that, because of the
unique and extraordinary nature of the Services, any breach or threatened breach
of any of the provisions of Section 7 hereof will cause irreparable injury and
incalculable harm to JDAW, and JDAW shall, accordingly, be entitled to
injunctive and other equitable relief for such breach or threatened breach and
that resort by JDAW to such injunctive or other equitable relief shall not be
deemed to waive or to limit in any respect any right or remedy which JDAW may
have with respect to such breach or threatened breach. JDAW and Consultant agree
that any such action for injunctive or equitable relief shall be heard in a
state or federal court situate in Rhode Island and each of the parties hereto,
hereby agrees to accept service of process by registered mail and to otherwise
consent to the jurisdiction of such courts.
6. INDEMNIFICATION
6.1 JDAW hereby agrees to indemnify and hold Consultant harmless to
the maximum extent permitted by applicable law and the by-laws of JDAW, against
all losses, claims, liens, damages, liabilities, costs, charges and expenses,
including, without limitation, the costs of investigating, preparing or
defending any action, suit, claim or proceeding or threatened action, suit,
claim or proceeding, whether civil, criminal, administrative or investigative,
including, without limitation, attorneys' fees, incurred or sustained by
Consultant in connection with (i) any misrepresentation of JDAW herein or breach
of any covenant of JDAW; and (ii) any such action, suit, claim or other
proceeding, to which he is, or may be made, a party by reason of its being a
party to and performing under this Agreement; PROVIDED, HOWEVER, that any
action, suit, claim or proceeding shall not be a result of Consultant's finally
adjudicated negligence or willful misconduct.
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6.2 Consultant hereby agrees to indemnify and hold JDAW, its officers,
employees, directors, shareholders and agents (collectively "JDAW Indemnities")
harmless to the maximum extent permitted by applicable law against all losses,
claims, liens, damages, liabilities, costs, charges and expenses, including,
without limitation, the costs of investigating, preparing or defending any
action, suit, claim or proceeding or threatened action, suit, claim or
proceeding, whether civil, criminal, administrative or investigative, including,
without limitation, attorneys' fees, incurred or sustained by any JDAW Indemnity
in connection with (i) any misrepresentation of Consultant herein or breach of
any covenant of Consultant, and (ii) any such action, suit, claim or other
proceeding, to which he is, or may be made, a party by reason of Consultants
gross negligence or willful misconduct in the performance of the Services under
this Agreement.
7. MISCELLANEOUS
7.1 NOTICES. All notices, requests, consents and other communications
required or permitted to be given hereunder, shall be in writing and shall be
deemed to have been duly given if delivered personally or sent by prepaid
telegram, or mailed first-class, postage prepaid, by registered or certified
mail (notices sent by telegram or mailed shall be deemed to have been given on
the date sent), to the parties at their respective address hereinabove set forth
or to such other address as either party shall designate by notice in writing to
the other in accordance herewith.
7.2 GOVERNING LAW. This Agreement shall be governed by and construed
and enforced in accordance with the local laws of the State of Rhode Island
applicable to agreements made and to be performed entirely in Rhode Island. This
Agreement shall be governed in all respects and for all purposes by the laws of
the State of Rhode Island and the Courts of the State of Rhode Island shall have
exclusive jurisdiction to enforce any Order or award obtained in arbitration. If
any provision of this Agreement shall be declared void or against public policy,
such provision shall be deemed severed from this Agreement and the remaining
provisions shall remain in full force and effect and unmodified.
7.3 ARBITRATION. Except with respect to any proceeding brought under
Section 7 hereof, any controversy, claim, or dispute between the parties,
directly or indirectly, concerning this Agreement or the breach hereof, or the
subject matter hereof, including questions concerning the scope and
applicability of this arbitration clause, shall be finally settled by
arbitration in Kent County, Rhode Island pursuant to the rules then applying of
the American Arbitration Association. The arbitrators shall consist of one
representative selected by JDAW, one representative selected by the Consultant
and one representative selected by the first two arbitrators. The parties agree
to expedite the arbitration proceeding in every way, so that the arbitration
proceeding shall be commenced within thirty (30) days after request therefore is
made, and shall continue thereafter, without interruption, and that the decision
of the arbitrators shall be handed down within thirty (30) days after the
hearings in the arbitration proceedings are closed. The arbitrators shall have
the right and authority to assess the cost of the arbitration proceedings and to
determine how their decision or determination as to each issue or matter in
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dispute may be implemented or enforced. The decision in writing of any two of
the arbitrators shall be binding and conclusive on all of the parties to this
Agreement. Should either JDAW or the Consultant fail to appoint an arbitrator as
required by this Section 8.3 within thirty (30) days after receiving written
notice from the other party to do so, the arbitrator appointed by the other
party shall act for all of the parties and its decision in writing shall be
binding and conclusive on all of the parties to this Employment Agreement. Any
decision or award of the arbitrators shall be final and conclusive on the
parties to this Agreement; judgment upon such decision or award may be entered
in any competent Federal or state court located in the United States of America;
and the application may be made to such court for confirmation of such decision
or award for any order of enforcement and for any other legal remedies that may
be necessary to effectuate such decision or award.
7.4 ENTIRE AGREEMENT. This Agreement sets forth the entire agreement
and understanding of the parties relating to the subject matter hereof, and
supersedes all prior agreements, arrangements and understandings, written or
oral, relating to the subject matter hereof. No representation, promise or
inducement has been made by any party that is not embodied in this Agreement,
and not party shall be bound by or liable for any alleged representation,
promise or inducement not so set forth.
7.5 ASSIGNABILITY. This Agreement, and the various parties' rights and
obligations hereunder may not be assigned. Notwithstanding the foregoing, any
party hereto which is a corporation may assign its rights, together with its
obligations, hereunder in connection with any sale, transfer or other
disposition of all or substantially all of its business or assets; and in such
even the rights and obligations of such corporation hereunder shall be binding
on its successors or assigns, whether by merger, consolidation or acquisition of
all or substantially all of the business or assets. This Agreement shall be
binding upon the parties hereto and their respective executors, administrators,
legal representatives, successors and assigns.
7.6 AMENDMENT. This Agreement may be amended, modified, superseded,
canceled, renewed or extended and the terms or covenants hereof may be waived,
only by a written instrument executed by all of the parties hereto who are
thereby affected, or in the case of a waiver, by the party waiving compliance.
No superseding instrument, amendment, modification, cancellation, renewal or
extension hereof shall require the consent or approval of any person other than
the parties hereto. The failure of either party at any time or times to require
performance of any provision hereof shall in no matter affect the right at a
later time to enforce the same. No waiver by either party of the breach of any
term or covenant contained in this Agreement, whether by conduct or otherwise,
in any one or more instances, shall be deemed to be, or construed as, a further
or continuing waiver of any such breach, or a waiver of the breach of any other
term or covenant contained in this Agreement.
7.7 INSURANCE. Consultant must produce and provide JDAW with evidence
of personal hospitalization insurance and business insurance.
7.8 The rights and obligations under Paragraphs 4, 5, and 6 shall
survive and continue after any expiration or termination of this Agreement and
shall bind the parties and their legal representatives, successors, heirs and
assigns.
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IN WITNESS WHEREOF, the parties hereto have set their hands and seals as of
the date first written above.
JD AMERICAN WORKWEAR, INC.
[Seal]
By:
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David N. DeBaene, PRESIDENT
By:
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Richard Sullivan
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