CONSULTING AGREEMENT
This consulting agreement, entered into this 10th day of March, 1999 by and
between Xxxxx Electronics, Inc., ("Xxxxx") and Xxxxxx Xxxxx Associates, Inc.,
a Corporation organized under the laws of the State of New York ("Xxxxxx
Xxxxx").
RECITALS
A. Xxxxxx Xxxxx is engaged in the business of consulting with and promoting
public and private companies, to assist them with mergers, acquisitions,
public and private financings, and business development and public relations
services of all types, including, but not limited to; shareholder relations,
market maker relations, stock price support issues, news releases and press
releases.
X. Xxxxx wishes to engage Xxxxxx Xxxxx as its authorized agent to provide
public relations and other services to Xxxxx. Xxxxxx Xxxxx shall make all
filings and disclosures required by the Securities and Exchange Commission of
public relations firms concerning this agreement and the carrying out of its
duties and obligations hereunder.
NOW, THEREFORE, the parties agree as follows:
1. TERM. Xxxxx hereby agrees to utilize the services of Xxxxxx Xxxxx to
provide public relations services to Xxxxx for a term commencing on the date
hereof and continuing for a period of one year. The term as defined herein
shall be known as the "Initial Term".
2. AUTOMATIC ANNUAL RENEWAL. If this agreement is still in full force and
effect at the end of the Initial Term, it shall be automatically renewed for
successive one year periods thereafter (the "Renewal Term") unless terminated
by Xxxxx or Xxxxxx Xxxxx upon written notice submitted at lease 10 days prior
to the end of the initial Term or Renewal Term then in effect, and unless
terminated pursuant to the Section entitled "Termination" below.
3. DUTIES. Xxxxxx Xxxxx shall provide public relations services and other
services to Xxxxx as deemed appropriate in the sole discretion of Xxxxxx
Xxxxx.
4. COMPENSATION. Xxxxxx Xxxxx shall be compensated by Xxxxx with free trading
common capital shares of Xxxxx and an option to purchase additional common
shares of Xxxxx as follows:
A. Free Trading Shares, Xxxxx shall transfer to Xxxxxx Xxxxx or its designees,
37,500 free trading shares upon execution of this agreement, and 37,500
additional free trading shares thirty days after the execution of this
agreement.
B. Option Agreement. Xxxxx hereby grants to Xxxxxx Xxxxx the option to
purchase 250,000 common capital shares of Xxxxx from Xxxxx at the purchase
price of $0.01 per share one year from the date of execution of this
agreement.
5. BEST EFFORTS. It is understood that all of the efforts of Xxxxxx Xxxxx
will be on a "best efforts" basis only, and Xxxxxx Xxxxx makes no
representations or warranties whatsoever, particularly with respect to that
the share price or trading volume of the Xxxxx shares will reach ant
particular level during the term of this agreement.
6. TERMINATION
A. WITH CAUSE. Xxxxx or Xxxxxx Xxxxx may terminate this agreement for cause at
any time. Cause shall mean (1) a party has committed a crime in the carrying
out of this agreement; (2) a party engages in any act during the term of this
agreement which constitutes fraud or an act of serious moral turpitude; (3) a
party misappropriates a business opportunity, engages in gross negligence or
willful misconduct materially injurious to the other party.
B. WITHOUT CAUSE. Xxxxx or Xxxxxx Xxxxx may terminate this agreement by mutual
consent, or according to the terms of the Section entitled "Automatic Annual
Renewal" above.
7. CONTRACTING AUTHORITY. Xxxxxx Xxxxx shall have no right to enter into any
agreement on behalf of or in the name of Xxxxx without the prior approval of
Xxxxx.
8. NON-CIRCUMVENTION. The parties agree that neither party will make any
contract, contact, or otherwise be involved in any transaction with any entity
introduced by the other party hereto without the permission of the introducing
party.
9. CONFIDENTIALITY. The parties hereto hereby agree to keep confidential all
knowledge, techniques, and information of any related kind and agree not to
reveal any information to anyone concerning knowledge which either party has
delivered from its relationship with the other party.
10. INDEMNIFICATION. Each party agrees to indemnify the other from and against
all liabilities, losses, damages, claims, costs and expenses arising out of or
due to any gross negligence, willful misconduct or breach of this or any other
contract.
11. SURVIVAL. Section 9 of this agreement, entitled Confidentiality, shall
survive the termination of this agreement.
12. INDEPENDENT CONTRACTOR. Xxxxxx Xxxxx will act as an independent contractor
in the performance of its obligations under this agreement.
13. DISPUTES. In the event that a dispute arises concerning this agreement,
such dispute shall be submitted to binding arbitration before a one-arbitrator
panel of the American Arbitration Association sitting on Long Island, New
York. The decision of the Arbitrator shall be enforceable in the Courts of the
State of New York, and the several states of the United Stated.
14. GOVERNING LAW. This agreement shall be governed by the laws of the State
of New York. No term or condition of this agreement shall be waived except in
writing signed by the party to be changed with the waiver.
15. NOTICES. Any notice required or permitted to be given under this agreement
shall be effective upon delivery in person or mailing by certified mail,
return receipt requested, to the parties at the addresses below.
To Xxxxxx Xxxxx Associates, Inc.
165 European American Xxxx Xxxxx, Xxxxx Xxxxx
Xxxxxxxxx, Xxx Xxxx, 00000
To Xxxxx Electronics, Inc.
X/x Xxxxxxxx & Xxx
Xxxxx 000
0000 XXX Xxxxxxxxx
Xxxx Xxxxx Xxxxxxx, XX 00000
16. ASSIGNMENT. Nothing in this agreement prohibits Xxxxxx Xxxxx from
assigning any portion of its obligations to Xxxxx to other public relations of
related firms, where appropriate. Nothing in this agreement prohibits Xxxxxx
Xxxxx from assigning the option granted to it in Section 4B above.
17. SEVERABILITY. In the event any one or more of the provisions of this
agreement shall for any reason be held invalid, illegal, or unenforceable, the
remaining provisions of this agreement shall be unimpaired.
18. ENTIRE AGREEMENT. This document contains the entire agreement between the
parties. No oral or other representation or warranty has been given to Xxxxx
by Xxxxxx Xxxxx. This agreement may only be modified in a writing signed by
the party to be charged.
IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties have
each executed and delivered this agreement as of the day and year first above
written.
Xxxxx Electronics, Inc.
Authorized Signature
/s/ Xxxx Xxxxx 3/11/99
by:
President
Xxxxxx Xxxxx Associates, Inc.
Authorized Signature
3/10/99 /s/Xxxx Xxxxxxxx as president of Xxxxxx Xxxxx
by: Xxxx Xxxxxxxx
President
ADDENDUM TO CONSULTING AGREEMENT
This addendum ("Addendum") to the Consulting Agreement dated March 10, 1999
(the "Agreement") between Xxxxxx Xxxxx Associates, Inc ("Xxxxxx Xxxxx") and
Xxxxx Electronics Inc. ("Xxxxx") is made this 16 th day of April 1999 by and
between Xxxxxx Xxxxx and Xxxxx.
Recitals:
WHEREAS, pursuant to the Agreement, Xxxxxx Xxxxx has previously agreed to
provide specified consulting services to Xxxxx:
WHEREAS, at the time the Agreement was entered into, Xxxxxx Xxxxx And Xxxxx
shared certain assumptions regarding the amount of work by Xxxxxx Xxxxx which
would be necessary to accomplish the goals of the Agreement:
WHEREAS, the parties now understand that the original goals of the Agreement
cannot be accomplished without a commitment of work and time by Xxxxxx Xxxxx
which would substantially exceed the original assumptions of the parties:
WHEREAS, in addition to the original goals of the Agreement, Xxxxx now desires
for Xxxxxx Xxxxx to undertake an internet-based marketing and public relations
campaign for Xxxxx and DNA Progeny, Inc., a new task which is beyond the scope
of the original Agreement; and
WHEREAS, the parties desire to amend and supplement the Agreement to set forth
certain binding commitments relating to the foregoing premises;
NOW, THEREFORE, in consideration of the premises and of the mutual
representations, warranties, covenants and agreements set forth in this
Addendum, Xxxxxx Xxxxx and Xxxxx hereby agree as follows:
1. Xxxxxx Xxxxx hereby agrees that, in addition to its other obligations under
the agreement, Xxxxxx Xxxxx shall use its best efforts to provide internet-
based public relations services and other internet-based services to Xxxxx and
DNA Progeny, Inc. as deemed appropriate in the sole discretion of Xxxxxx
Xxxxx. It is understood and agreed by Xxxxxx Xxxxx and Xxxxx that all of the
best efforts of Xxxxxx Xxxxx pursuant to this paragraph 1 will be on a "best
efforts" basis only, that Xxxxxx Xxxxx makes no representations or warranties
that the share price or trading volume of the Xxxxx shares will reach any
particular level during the term of this agreement.
2. In consideration of Xxxxxx Xxxxx'x agreement contained in paragraph 1 of
this Addendum, Xxxxx hereby agrees to transfer, or to cause to be transferred,
to Xxxxxx Xxxxx 500,000 shares of common stock of Xxxxx. Xxxxx hereby
represents and warrants to Xxxxxx Xxxxx that these shares shall be free
trading stock, and that the certificates representing these shares shall not
contain any restrictive legends. The term "free trading stock" or "free
trading shares" as used in the Agreement and this Addendum, means duly
authorized, validly issued and fully paid shares of common stock of Xxxxx,
which are freely transferable in the hands of Xxxxx without registration
pursuant to the Securities Act of 1933, as amended (the "1933 Act"), or the
securities laws of any State, and without limitation on the methods, amounts
and timing of such transfers pursuant to Rule 144, Rule 502(d) or Rule 701(c)
promulgated under the 1933 Act, or pursuant to any other law, rule or
regulation. The compensation to be paid to Xxxxxx Xxxxx pursuant to this
paragraph 2 shall be in addition to, and not in lieu of, the compensation to
be paid to Xxxxxx Xxxxx pursuant to the Agreement. Any costs or expenses
incurred by Xxxxxx Xxxxx in the performance of its obligations under this
Addendum shall be the sole responsibility of Xxxxxx Xxxxx, and Xxxxxx Xxxxx
shall not be entitled to any reimbursement by Xxxxx of any such costs or
expenses.
3. The parties acknowledge and agree that Xxxxxx Xxxxx may subcontract or
assign all or any portion of its obligations under this addendum to other
companies, entities, contractors, subcontractors, employees, agents and other
persons (collectively, "third party providers") as deemed appropriate in the
sole discretion of Xxxxxx Xxxxx; provided, however, that Xxxxxx Xxxxx shall be
solely responsible for paying the costs, fees and expenses of these third-
party providers and shall indemnify and hold harmless Xxxxx against any and
all claims of third-party providers for unpaid costs, fees and expenses.
4. The parties acknowledge and agree that Xxxxx is subject to the reporting
requirements of the Securities Exchange Act of 1934, as amended (the "1934
Act"), and that the 1933 Act, the 1934 Act, the rules and regulations
promulgated thereunder and the various securities laws (collectively,
"Securities Laws") impose significant burdens and limitations on the
dissemination of certain information about Xxxxx by Xxxxx and by persons
acting for or on behalf of Xxxxx. Each of the parties agree to comply with all
applicable Securities Laws in carrying out its obligations under the Agreement
and this Addendum, and without limiting the generality of the foregoing. Xxxxx
hereby agrees that (i) all information about Xxxxx provided to Xxxxxx Xxxxx by
or on behalf of Xxxxx which may be disseminated to the public by Xxxxxx Xxxxx
in providing any public relations or other services pursuant to the Agreement
or this Addendum shall not contain any untrue statement of a material fact or
omit to state any material fact necessary to make the statements made, in
light of the circumstances in which they were made, not misleading. (ii) Xxxxx
shall promptly notify Xxxxxx Xxxxx if Xxxxx becomes aware that Xxxxxx Xxxxx
has publicly made any untrue statement of a material fact regarding Xxxxx or
has omitted to state any material fact necessary to make the public statements
made by Xxxxxx Xxxxx about Xxxxx, in light of the circumstances in which they
were made, not misleading, and (iii) Xxxxx shall promptly notify Xxxxxx Xxxxx
of any "quiet period" or "blackout period" or other similar period during
public statements by or on behalf of Xxxxx are restricted by any Securities
Law. Each party (an "indemnifying party") hereby agrees, to the full extent
permitted by applicable law, to indemnify and hold harmless the other party
(the "indemnified party") for any damages caused to the indemnified party by
the indemnifying party's breach or violation of a Securities Law, except to
the extent that the indemnifying party's breach or violation of a Securities
Law is caused by the indemnified party's breach or violation of the Agreement,
this Addendum, or any Securities Law.
5. Except as specifically amended by this Addendum, the Agreement shall remain
in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Addendum on the day and
year first above written.
XXXXX ELECTRONICS, INC.
By: /s/ Xxxxx Xxxxxxx
Chairman
XXXXXX XXXXX ASSOCIATES, INC.
By: Xxxx Xxxxxxxx
President
