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CONSULTING
AGREEMENT
THIS CONSULTING AGREEMENT
(this “Agreement”), dated
December 31, 2009 (the “Effective Date”), is
entered into by and between EDUCATIONAL INVESTORS, INC., a
Delaware corporation (the “Company”), and JOSEPH MONACO, an individual
(“the Consultant”).
1. Term. The Company
hereby engages the services of the Consultant, and the Consultant hereby agrees
to provide consulting services to the Company, for a term commencing on
Effective Date hereof and, subject to earlier termination as provided in Section 5 hereof,
continuing through December 31, 2010 (the “Initial Term”); which
Initial Term may be extended from year to year thereafter by mutual agreement of
the Company and the Consultant (such Initial Term, as the same may be so
extended, being hereinafter sometimes called the “Term of
Engagement”). The Consultant shall perform the services
specified herein, all upon the terms and conditions hereinafter
stated. This Agreement may be extended only upon the written consent
of the parties hereto.
2. Duties
and Responsibilities.
a. General. The
Consultant provide such general business and consulting services to the Company
as may be assigned to him by the board of directors of the Company (the “Board of
Directors”). Such consulting duties shall include, without
limitation, advising the Company and the Board of Directors with respect to: (i)
relationships with various state educational departments and agencies, and (ii)
analyzing and pursuing potential acquisitions. The Consultant also
agrees to perform, without additional compensation (other than reimbursement of
reasonable travel expenses), such similar consulting services for any subsidiary
of the Company or parent corporation of the Company, including (i) Florham
Consulting Corp (to be renamed Educational Investors Corp.), (ii) Training
Direct LLC, a wholly-owned subsidiary of the Company (“TDI”) and (iii) any
successor-in-interest to the Company (together with the Company, hereinafter
collectively called the “Company Group”), as
the Board of Directors of the Company Group shall from time to time reasonably
specify.
b. Time. The
Consultant shall devote a reasonable portion of his business time, attention and
energy to the Business (as defined herein) of the Company Group as necessary and
appropriate to further the interests of the Company Group; it being understood
that the Consultant is a principal owner of Culinary Training Institute and its
affiliated entities (collectively, the “CTI Group”) and
devotes a significant portion of his business and professional time to the
operation and management of the CTI Group.
3. Consulting
Fee.
During the Term of Engagement, the
Company shall pay to the Consultant a fee (the “Consulting Fee”) at
an annual rate of Seventy-Five Thousand ($75,000) Dollars. Such
Consulting Fee shall be payable on the last business day of each month,
commencing January 31, 2010, at the rate of Six Thousand Two Hundred and Fifty
($6,250) Dollars per month, and shall be pro-rated for any partial
month. Such Consulting Fee may be increased by mutual agreement of
the Consultant and the Board of Directors of the Company.
4. Expenses
and TDI Plans.
a. Expenses. During
the Term of Engagement, the Company shall pay or reimburse the Consultant, upon
submission of appropriate documentation by him, for all out-of-pocket expenses
for entertainment, travel, meals, hotel accommodations, and the like incurred by
him in the interest of the Business. Consultant shall also continue to receive
automobile expenses currently paid for by TDI during the Term of Engagement in
an amount not to exceed $575.00 per month.
b. TDI
Plans. During the Term of Engagement, the Consultant shall be
entitled to continue to participate in any group insurance plan, including
health insurance, term life insurance, and disability insurance policies that
are currently maintained by TDI (collectively, the “TDI
Plans”).
5. Termination.
a. Death. If
the Consultant shall die prior to the expiration of the Term of Engagement, the
Company shall have no further obligation hereunder to the Consultant or his
estate except to pay to the Consultant’s estate the amount of the Consulting
Fees accrued to the date of his death. Such payment shall be made promptly after
the date of death to the Consultant’s estate.
b. Disability. If prior
to the expiration of the Term of Engagement, the Consultant shall be prevented,
during a continuous period of ninety (90) days (the “Disability Period”),
from performing his duties by reason of “disability,” the Company may terminate
this Agreement, in which event the Consultant shall receive his Consulting Fee
accrued to the date upon which any determination of disability shall have been
made as hereinafter provided, which Consulting Fee payment may be reduced by the
amount of any disability income payments the Consultant may receive in
connection with such occurrence of disability during the Disability Period under
any policy or plan carried or maintained by or on behalf of the Company and
under which the Consultant is a beneficiary or participant. Such
payment shall be made to the Consultant within five days of the end of the
Disability Period.
For
purposes of this Agreement, the Consultant shall be deemed to have become
disabled when the Board of Directors (excluding the Consultant or any of his
affiliates), upon the diagnosis of a reputable, licensed physician of the
Company’s choice, in consultation with the Consultant’s primary physician, shall
have determined that the Consultant shall have become unable to perform his
duties under this Agreement, whether due to physical or mental incapacity or to
infirmity caused by chronic alcoholism or drug use (excluding infrequent and
temporary absences due to ordinary illness); provided that such
incapacity shall have continued uninterrupted for a period of not less than
ninety (90) days.
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c. Termination for
Cause. Notwithstanding any other provision of this
Agreement, if prior to the expiration of the Term of Engagement, the Company
shall have the right to terminate the services of the Consultant the Consultant
“for Cause,” as defined below. In the event of such termination, this
Agreement shall terminate, and the Company shall have no further obligation to
the Consultant or his estate, except that the Company will pay to the
Consultant, within thirty (30) days of such termination, or in the event of his
subsequent death, his estate, an amount equal to the Consultant’s Consulting
Fee, as provided in Section 3 hereof,
accrued to the date of termination. In addition, the Consultant shall
not, after the date of termination pursuant to this Section 5(c), be entitled to
receive benefits, if any, under any TDI Plans.
For the
purposes hereof, the term “Cause” shall mean and
be limited to a discharge resulting from any one of the following:
(i) the
Consultant’s conviction of a felony or any other crime involving moral
turpitude,
(ii) a
final determination by a court of competent jurisdiction that the Consultant has
breached his fiduciary duties to the Company, or
(iii) the
Consultant’s breach of any of his material covenants and obligations under this
Agreement or his willful failure or refusal to follow written lawful polices or
directives established by the Board of Directors; provided that the
Board of Directors shall have first given written notice thereof to the
Consultant on each occasion describing in reasonable detail the alleged material
breach, failure or refusal, and such breach or willful failure or refusal to
follow written lawful policies or directives shall remain uncured for a period
of twenty (20) days following receipt of each such notice.
d. Termination without
Cause.
The
Company may terminate this Agreement prior to the end of the Term of Engagement,
other than as provided in paragraphs (a), (b) and (c) of this Section 5, by
providing three (3) months’ advance written notice to the
Consultant. A termination initiated by the Company pursuant to this
Section 5(d) shall be referred to as a “Termination Without
Cause”.
In the
event of a Termination Without Cause initiated by the Company, the Company shall
additionally pay to the Consultant an additional amount which shall be equal to
the lesser
of (a) the Consulting Fee which would have been paid to the Consultant
for the Term of Engagement remaining uncompleted at the time of such
termination, or (b) one full year’s Consulting Fee. Such amount shall
be paid in $6,250 monthly installments in the same manner as the Consulting Fee
would have been payable pursuant to Section 3 above, until the full amount owed
under this Section 5(d) is paid in full to the Consultant. In the
event of a Termination Without Cause, the Consultant shall continue to have the
right to continue to participate in any TDI Plans until the full amount owed
under this Section 5(d) is paid in full.
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e. Voluntary Termination by
Consultant. In the
event that the Consultant resigns or voluntarily terminates this Agreement prior
to the expiration of the Term of Engagement for no good reason, the Company
shall have no further obligation to the Consultant, except that the Company will
pay to the Consultant, within thirty (30) days of such termination, an amount
equal to the Consultant’s Consulting Fee, as provided in Section 3 hereof,
accrued to the date of termination.
f. Acquisition of CTI
Group. Notwithstanding anything to the contrary, express or
implied, contained in this Agreement, in the event that the Company or any other
member of the Company Group shall consummate the acquisition of the CTI Group
(which acquisition shall include the employment of the Consultant with the
Company Group and/or CTI Group), this Agreement shall automatically terminate
and be of no further force or effect.
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6.
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Confidential
Information.
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a. The
Consultant acknowledges that in the course of his engagement with the Company as
a Consultant he may receive certain information, knowledge and data concerning
the Business of the Company Group and its affiliates or pertaining to any
individual, firm, corporation, partnership, joint venture, business,
organization, entity or other person which the Company Group may do business
with during the Term of Engagement, which is not in the public domain, including
but not limited to trade secrets, employee records, names and lists of suppliers
and customers, programs, statistics, processes, techniques, pricing, marketing,
software and designs, or any other matters, and all other confidential
information of the Company Group and its and affiliates acquired in connection
with your engagement (hereinafter referred to collectively as "Confidential
Information”), which the Company Group and its affiliates desire to
protect. The
Consultant understands that such Confidential Information is confidential, and
he agrees not to reveal or disclose or otherwise make accessible such
Confidential Information to anyone outside of the Company or any affiliate and
their respective officers, employees, directors, consultants or agents, so long
as the confidential or secret nature of such Confidential Information shall
continue, whether or not he is employed by the Company.
b. The
Consultant further agrees that during the Term of Engagement and thereafter, he
will not use such information in competing with the Company Group or any
affiliate or for any other personal gain. At such time as the
Consultant shall cease to be employed by the Company for whatever reason or at
any other time the Company may reasonably request, he shall promptly deliver and
surrender to the Company all papers, memoranda, notes, records, reports,
sketches, specifications, designs and other documents, writings (and all copies
thereof), and other property produced by him or coming into his possession by or
through his engagement hereunder and relating to the Confidential Information
referred to in this Section 6 or
otherwise to the Business, and the Consultant agrees that all such materials
will at all times remain the property of the Company.
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7. Agreement
Not to Compete and Not to Solicit.
a. Agreement Not to
Compete. During the Term of Engagement and for a period of two
(2) years after any Termination of this Agreement for any reason (the “Non-Competition
Period”), the Consultant shall not be engaged, directly or indirectly,
whether as an officer, employee, director, stockholder, partner, joint venturer
or other participant, in any other business activity which would be competitive
with the Business or any other business conducted by the Company Group during
the Term of Engagement; provided that the
Consultant shall be permitted to:
(i) continue to
own a significant equity interest in and operate the CTI Group; provided,
however that the express written consent of the independent members of the Board
of Directors of the Company shall be required before the CTI Group acquires a
business, or enters into a line of business located in the State of Connecticut
or other state in which the Company is then conducting business, that is in
competition with the Business of the Company; and
(ii) own
or acquire up to five percent (5%) of the outstanding capital stock or equity of
any publicly traded corporation or other Person that engages in a business in
competition with the Business of the Company.
b. As
used in this Agreement, the term “Business” shall mean and include the
collective reference to the ownership and operation of businesses that provide
instruction and academic, financial or vocational educational services to
consumers similar to the type offered by the Company during the Non-Competition
Period, whether through lectures, on-line Internet courses or classroom
streaming, textbooks, or any combination thereof; provided,
however, that the term “Business” shall not mean
or include providing classroom and education and online educational content with
respect to cooking and related culinary skills of the nature currently provided
by the CTI Group (the “CTI Group
Business”).
c. It
is expressly agreed that if any restrictions set forth in Section 7(a) are
found by any court having jurisdiction to be unreasonable because they are too
broad in any respect, then and in each such case, the remaining restrictions
herein contained shall, nevertheless, remain effective, and this Agreement, or
any portion thereof, shall be considered to be amended so as to be considered
reasonable and enforceable by such court, and the court shall specifically have
the right to restrict the business or geographical scope of such restrictions to
any portion of the business or geographic areas described above to the extent
the court deems such restriction to be necessary to cause the covenants to be
enforceable, and in such event, the covenants shall be enforced to the extent so
permitted.
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d. Agreement Not to
Solicit. During the Term of Engagement and for a period of two
(2) years after any Termination of this Agreement for any reason, (the “Non-Solicitation
Period”) the Consultant agrees that he will not, either directly or
indirectly, through any person, firm, association, corporation, partnership,
agency or other business entity or person with which he is now or may hereafter
become associated, (i) cause or induce any present or future employee of the
Company Group to leave the employ of the Company or any member of the Company
Group to accept employment with the Consultant or with such person, firm,
association or corporation, agency or other business entity or (ii) solicit any
person or entity which is a customer of the Company Group for the purpose of
directly or indirectly furnishing services competitive with the Company Group;
provided however that this section 7(d) shall not apply to any person who, as of
the date of this Agreement, also works for or with the CTI Group such that if
Consultant was so restricted by this section 7(d), it would materially adversely
affect the current business and operations of the CTI Group.
e. It is
expressly agreed that the covenants and agreements set forth in this Section 7
not apply to the CTI Group or the CTI Group Business, and in the event that the
Company does not acquire the CTI Group for any reason, the Consultant shall be
entitled to continue to own, operate and be employed by the CTI Group and engage
in the CTI Group Business.
8. Specific Performance. The Consultant
acknowledges that a remedy at law for any breach or attempted breach of Section 6 or Section 7 of this
Agreement may be inadequate, agrees that the Company shall be entitled to seek
specific performance and injunctive and other equitable relief in case of any
such breach or attempted breach, and further agrees to waive any requirement for
the securing or posting of any bond in connection with the obtaining of any such
injunctive or any other equitable relief.
9. Severability. In case of any
term, phrase, clause, paragraph, section, restriction, covenant, or agreement
contained in this Agreement shall be held to be invalid or unenforceable, the
same shall be deemed, and it is hereby agreed that the same are meant to be
several, and shall not defeat or impair the remaining provisions
hereof.
10. Waiver. The waiver by the
Company of a breach of any provision of this Agreement by the Consultant shall
not operate or be construed as a waiver of any subsequent or continuing breach
of this Agreement by the Consultant.
11. Assignment; Binding Affect.
This Agreement may not be assigned under any circumstances by either
party. Neither the Consultant nor his estate shall have any right to
commute, encumber or dispose any rights to receive payments hereunder, it being
agreed that such payment and the right thereto are nonassignable and
nontransferable. Subject to the provisions of this Section 11, this
Agreement shall be binding upon and inure to the benefit of the parties hereto,
the Consultant’s heirs and personal representatives, and the successors and
assigns of the Company.
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12. Amendments. This Agreement may
not be changed, amended, terminated or superseded orally, but only by an
agreement in writing, nor may any of the provisions hereof be waived orally, but
only by an instrument in writing, in any such case signed by the party against
whom enforcement of any change, amendment, termination, waiver, modification,
extension or discharge is sought.
13. Entire Agreement;
Amendment; Governing Law. This Agreement embodies the entire agreement
and understanding between the parties hereto with respect to the matters covered
hereby. Only an instrument in writing executed by the parties hereto
may amend this Agreement.
14. Governing Law; Jurisdiction.
This Agreement shall be governed by and construed in accordance with the laws of
the State of New York. All actions and proceedings arising out of or
relating to this Agreement shall be brought by the parties and heard and
determined only in a Federal or state court located in the Borough of Manhattan
in the City and State of New York and the parties hereto consent to jurisdiction
before and waive any objections to the venue of such Federal and New York
courts. The parties hereto agree to accept service of process in
connection with any such action or proceeding in any manner permitted for a
notice hereunder.
15. Attorneys’ Fees. In
the event that any suit or other legal proceeding is brought for the enforcement
of any of the provisions of this Agreement, the parties hereto agree that the
prevailing party or parties shall be entitled to recover from the other party or
parties upon final judgment on the merits reasonable attorneys’ fees, including
attorneys’ fees for any appeal and costs incurred in bringing such suit or
proceeding.
16. Headings. All
descriptive headings of the several Sections or paragraphs of this Agreement are
inserted for convenience only and do not constitute a part of this
Agreement.
17.
Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and same instrument.
18. Facsimile and Electronic
Signatures. Facsimile and pdf signatures hereto shall have the
same validity as original signatures hereto.
19. Representations and
Warranties. (a) Consultant represents and warrants to Company that (i)
Consultant is under no contractual or other restriction or obligation which is
inconsistent with his execution of this Agreement or performance of his duties
hereunder, (ii) Consultant has no physical or mental disability that would
hinder his performance of his duties under this Agreement, and (iii) he has had
the opportunity to consult with an attorney of his choosing in connection with
the negotiation of this Agreement.
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20. Notices. Any
notice required or permitted to be given under this Agreement shall be in
writing and shall be sent by certified mail, by personal delivery or by
overnight courier to the Consultant at his residence (as set forth in Company’s
corporate records) or to the Company at its principal office and shall be
effective upon receipt, if by personal delivery, three (3) business days after
mailing, if sent by certified mail or one (1) business day after deposit with an
overnight courier.
[SIGNATURE
PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto
have executed this agreement as of the date and year first above
written.
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EDUCATIONAL
INVESTORS, INC.
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By:
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/s/ Joseph
Bianco
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Name: Joseph
Bianco
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Title: Chairman
and CEO
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| CONSULTANT: | |
| /s/ Joseph Monaco | |
| JOSEPH MONACO | |
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