CONSULTING AGREEMENT
--------------------
THIS AGREEMENT, made as of this 20th day of September, 2000, by and between
FETCHOMATIC GLOBAL INTERNET INC., a corporation duly organized and existing
under the laws of the State of Nevada with its registered agent located at
Pacific Corporate Services Inc., 0000 Xxxxxxx Xxxx, Xxx Xxxxx, Xxxxxx 00000 (the
"Company"), and XXXXXX GROUP LLC, a limited liability company duly organized and
existing under the laws of the State of New York with offices located at 000
Xxxxxxxxxxxxx Xxxxx, Xxxxxxxxxxxxx, Xxx Xxxx 00000 (the "Consultant").
RECITALS
--------
The Company, through its wholly-owned subsidiary xxxxxXxxxxx.xxx Online
Incorporated ("fetchOmatic") is engaged in the business of providing
geographically identifiable business-to-business, business-to-consumer,
marketing, retail access and advertising services on the Internet through the
use of fetchOmatic's web site and proprietary intellectual property (the
"Business"). A material source of the revenues of the Business are derived from
the purchase of banner advertising created by customers of the Business desiring
to advertise their respective products or services on the fetchOmatic web site
(individually and collectively referred to as "Banner Advertising Fees"). In
order to increase revenues derived from the Business, and specifically the
Banner Advertising Fees, the Company wishes to engage the Consultant to perform
marketing services on behalf of the Business, including the establishment of a
direct sales organization responsible for generating Banner Advertising Fees
(the "Marketing Services").
CONSIDERATION
-------------
In consideration of the foregoing and the mutual covenants and agreements
herein contained, the parties hereto agree and contract as follows:
1. Marketing Services. The Consultant hereby agrees to perform such
Marketing Services as the Consultant deems necessary or advisable during the
term of this Agreement in order to achieve the goals described on Exhibit 1
attached to this Agreement and made a part hereof (the "Sales Goals") on or
prior to the first anniversary of the date of this Agreement, and thereafter as
provided in Paragraph 3, below. The scope of such Marketing Services shall
include activities related to: (a) the establishment of a direct sales
organization responsible for marketing the Business to potential customers in
order to increase Banner Advertising Fees; (b) assisting the management of the
Business in designing and implementing marketing strategies and campaigns; and
(c) any other activities or projects mutually agreeable to the Consultant and
the Company.
2. Availability; Noncompetition
-----------------------------
(a) Availability. The Consultant hereby agrees that during the term of this
Agreement the Consultant shall be available to perform the Marketing Services on
a full time basis. The Consultant shall determine the time, manner and means of
providing the Marketing Services, provided, however, upon the Company's
reasonable request the Consultant shall provide such Marketing Services during
the Company's normal business hours and during such other times as are
reasonably necessary for the proper performance of the Consultant's
responsibilities hereunder. Notwithstanding the foregoing, the Consultant shall
be entitled to such vacation, sick days, holidays and other non-working days as
are reasonable and appropriate in the Consultant's discretion.
(b) Noncompetition. The Consultant acknowledges and agrees that the Company
may solicit advertising fees and/or perform marketing functions with its own
employees, agents and/or third parties engaged by the Company. The Consultant
further acknowledges and agrees that during the term of this Agreement, the
Consultant shall not directly or indirectly perform any services to be provided
to the Company hereunder for or on behalf of any other person, firm or entity
that is engaged in a business or enterprise that is in direct competition with
the Business.
3. Term. Subject to the provisions of Paragraph 9 below:
----
(a) Initial Term. The term of this Agreement shall be for a period of
twelve (12) months, commencing on the date first set forth above (the "Initial
Term"); provided, however, on March 30, 2001 the Company and the Consultant
shall review the sales performance of the Consultant for the period commencing
with the date of this Agreement and ending on March 30, 2001 (the "Sales
Determination Period"). If the amount of Banner Advertising Fees received by
the Company from the sources of Banner Advertising Fees described on Exhibit
4(b) attached hereto does not equal or exceed $677,600 by the end of the Sales
Determination Period the Company shall have the right, in the Company's sole
discretion, during the 15 day period following the Sales Determination Period,
to terminate this Agreement upon 10 days' written notice to the Consultant, and
in such event the "Initial Term" shall mean the period commencing on the date
hereof and ending on the effective date of such termination following the end of
the Sales Determination Period as provided in such notice.
(b) Extension Term. If the amount of Banner Advertising Fees received by
the Company from the sources of Banner Advertising Fees described on Exhibit
4(b)attached hereto equals or exceeds $5,120,000 for the Initial Term, this
Agreement may be extended by either party for period of twelve (12) months
commencing immediately after the end of the Initial Term (the "Extension Term")
upon delivery of written notice to the other party during the 15 day period
following the end of the Extension Term. If the amount of Banner Advertising
Fees received by the Company from the sources of Banner Advertising Fees
described on Exhibit 4(b) attached hereto during the Initial Term does not equal
or exceed $5,120,000 the Company shall have the right, in the Company's sole
discretion, during the 15 day period following the end of the Initial Term, to
terminate this Agreement upon 10 days' written notice to the Consultant.
Following the Extension Term this Agreement may be extended by either party for
the twelve (12) month period following the Extension Term upon delivery of
written notice to the other party during the 15 day period following the end of
the Extension Term, and for each
successive twelve (12) month period thereafter upon delivery of written notice
to the other party during the 15 day period following the end of such preceding
twelve (12) month period, if the amount of Banner Advertising Fees received by
the Company from the sources of Banner Advertising Fees described on Exhibit
4(b) attached hereto during the Extension Term, or the immediately preceding the
twelve (12) month period, as the case may be, equals or exceeds $10,400,000. If
the amount of Banner Advertising Fees received by the Company from the sources
of Banner Advertising Fees described on Exhibit 4(b) attached hereto during the
Extension Term, or during any successive twelve (12) month period, as the case
may be, does not equal or exceed $10,400,000, the Company shall have the right,
in the Company's sole discretion, during the 15 day period following the end of
the Extension Term, or such preceding twelve (12) month period, respectively, to
terminate this Agreement upon 10 days' written notice to the Consultant.
4. Compensation and Expenses. In consideration of the Consultant's efforts
in performing the Marketing Services, the complete and satisfactory performance
by Consultant of all the terms and conditions of this Agreement, and for other
good and valuable consideration, the Company hereby agrees to pay the Consultant
as follows:
(a) Execution Payment. Upon the execution of this Agreement, the Company
shall deliver to the Consultant one or more certificates, in the Consultant's
discretion, for TWO HUNDRED THOUSAND (200,000) restricted shares (the
"Restricted Shares") of the Company's validly authorized and issued and fully
paid and non-assessable common stock. In no event shall the Restricted Shares,
or any portion thereof, be forfeitable by the Consultant, refundable to the
Company, or subject to adjustment, set-off or reduction. The Consultant agrees
to hold and possess the Restricted Shares in compliance with all applicable
federal or state laws of the United States governing the issuance, sale or
resale of securities, including restrictions or resale of the Restricted Shares
during any applicable holding period relating thereto. The Restricted Shares
shall bear the following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"). SUCH SHARES MAY NOT BE SOLD, TRANSFERRED OR PLEDGED IN THE ABSENCE OF
SUCH REGISTRATION OR UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL
REASONABLY ACCEPTABLE TO IT STATING THAT SUCH SALE OR TRANSFER IS EXEMPT FROM
THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE ACT.
(b) Commissions. The Company shall pay to the Consultant each month an
amount equal to fifty percent (50%) of all Banner Advertising Fees received by
the Company in such month from the sources of Banner Advertising Fees described
on Exhibit 4(b) attached hereto and made a part hereof (the aggregate of the
amount of each monthly payment described above to be referred to as the "Banner
Advertising Commission Payment"). For purposes of determining the amount of the
Banner Advertising Commission Payment for any month all amounts attributable in
such month to checks that are not subject to collection by the Company (whether
returned for insufficient funds or otherwise), credit card payments that are not
subject to collection by the Company (whether for refusal of credit by the card
issuer or otherwise) and cancelled orders shall be excluded; provided, however,
all amounts attributable in such month to orders cancelled due to any action, or
failure to act, by the Company or for other reasons within the Company's control
(e.g., after-sales service or delivery by the Company) shall be included in the
calculation of the Banner Advertising Commission Payment for such month. The
Company shall deliver the monthly Banner Advertising Commission Payment to the
Consultant within ten (10) days of the end of each calendar month in which the
related Banner Advertising Fees were received by the Company. The Company shall
additionally deliver to the Consultant within fifteen (15) days of the end of
each calendar quarter a statement describing the aggregate amount of Banner
Advertising Fees received by the Company in such calendar quarter upon which the
monthly Banner Advertising Commission Payments made to the Consultant in
connection with such calendar quarter were calculated, and the identity of each
customer of the Business from whom such Banner Advertising Fees were received in
such calendar quarter. Upon reasonable notice to the Company, the Consultant,
or its representatives, shall be permitted during normal working hours of the
Company to inspect the books and records of the Company relating to Banner
Advertising Fees and the determination of the Banner Advertising Commission
Payment. Notwithstanding anything to the contrary contained herein, Banner
Advertising Commission Payments shall be payable to the Consultant during the
term of this Agreement, and for all periods thereafter in which the Company
receives Banner Advertising Fees from the sources of Banner Advertising Fees
described on Exhibit 4(b), and the Company hereby acknowledges and agrees that
the obligations (i) to pay Banner Advertising Commission Payments to the
Consultant shall be continuing obligations and shall survive the termination of
this Agreement, and (ii) to provide the statement referred to above to the
Consultant, and to provide the Consultant or its representatives access to the
Company's records pursuant to the terms hereof, shall be continuing obligations
and shall survive the termination of this Agreement for a period ending three
(3) calendar months after the last Banner Advertising Commission Payment is made
to the Consultant pursuant to the terms hereof.
(c) Consulting Fee. Subject to adjustment as described below, the Company
shall pay to the Consultant the sum of SIX THOUSAND DOLLARS ($6,000) each
calendar month falling within the term of this Agreement (the amount of each
such payment to be referred to as the "Consulting Fee"). The Company shall
deliver the Consulting Fee to the Consultant within ten (10) days of the end of
each calendar month for which the Consulting Fee is payable. For periods of
time less than a full calendar month, the amount of the Consulting Fee shall be
prorated based on the number of calendar days of such month for which the
Consulting Fee is payable. The amount of the Consulting Fee payable to the
Consultant with respect to any calendar month shall be reduced based on the
amount of the Banner Advertising Commission Payment (if any) payable to the
Consultant with respect to such calendar month as follows:
Amount of Banner Advertising Amount of
Commission Payment Consulting Fee
------------------- ---------------
$0 - $4,999 $6,000
$5,000 - $5,999 $5,000
$6,000 - $6,999 $4,000
$7,000 - $7,999 $3,000
$8,000 - $8,999 $2,000
$9,000 - $9,999 $1,000
$10,000 - $0
(d) Performance Bonus. If the Consultant achieves the Sales Goals for the
Initial Term on or prior to the end of the Initial Term, the Company shall
deliver to the Consultant one or more certificates, in the Consultant's
discretion for TWO HUNDRED THOUSAND (200,000) restricted shares (the
"Performance Shares") of the Company's validly authorized and issued and fully
paid and non-assessable common stock. In no event shall the Performance Shares,
or any portion thereof, be forfeitable by the Consultant, refundable to the
Company, or subject to adjustment, set-off or reduction. The Consultant agrees
to hold and possess the Performance Shares in compliance with all applicable
federal or state laws of the United States governing the issuance, sale or
resale of securities, including restrictions or resale of the Performance Shares
during any applicable holding period relating thereto. The Performance Shares
shall bear the following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"). SUCH SHARES MAY NOT BE SOLD, TRANSFERRED OR PLEDGED IN THE ABSENCE OF
SUCH REGISTRATION OR UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL
REASONABLY ACCEPTABLE TO IT STATING THAT SUCH SALE OR TRANSFER IS EXEMPT FROM
THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE ACT.
(e) Expenses. During the Initial Term the Company shall reimburse the
Consultant for reasonable and necessary business expenses incurred in connection
with the performance of the Marketing Services or this Agreement (including, but
not limited to, travel, meals and lodging, long distance telephone, video
equipment, computer and office equipment, software programming expenses, office
rent, personnel expenses including all salaries, wages and compensation of the
Consultant's employees, etc.), all in accordance with the Companies policies and
procedures then in effect (including, but not limited to, those relating to
documentation and receipts) ("Reimbursable Expenses"). Notwithstanding the
foregoing, no cost or expense of the Consultant for wages, salaries,
compensation, commissions or benefits of any consultant or independent
contractor engaged by the Consultant in performing Marketing Services shall be
deemed a Reimbursable Expense hereunder. The Company shall pay the Consultant
for all Reimbursable Expenses incurred by the Consultant in any calendar month
promptly upon the submission of invoices, receipts and other documentation
evidencing such expense, but in no event later than ten (10) days following the
end of the calendar month in which such documentation is submitted to the
Company. Notwithstanding the foregoing (i) in no event shall the Consultant be
reimbursed in for Reimbursable Expenses in excess of TEN THOUSAND DOLLARS
($10,000) in any calendar month without the prior consent of the Company, and
(ii) the Company shall not be obligated to reimburse the Consultant for, and the
Consultant shall be solely responsible for, any Reimbursable Expenses incurred
by the Consultant in any month in which Banner Advertising Fees received by the
Company from the sources of Banner Advertising Fees described on Exhibit 4(b)
exceeds One Million Dollars ($1,000,000).
5. Independent Contractor. The Consultant will at all times be an
independent contractor and not an employee of the Company. The manner in which
the Consultant renders the Marketing Services to the Company will be within the
Consultant's sole control and discretion, although the Consultant agrees to
cooperate with the Company's personnel and use the Consultant's best efforts on
behalf of the Company within the scope of the Consultant's services. The
Consultant recognizes and agrees that neither the Consultant nor any employee of
the Consultant is subject or entitled to any benefits, wages, or other terms and
conditions of employment or otherwise subject to or covered under the policies,
practices and procedures of the Company, its employees, agents and successors in
interest as they may apply to employees of the Company.
6. First Refusal Rights. (a) During the term of this Agreement and, (b)
during the one (1) year period following the termination of this Agreement if
this Agreement is terminated (i) by the Company for any reason other than
pursuant to the provisions of Paragraphs 3(a), 3(b), 9(b) or 9(c), or (ii) by
the Consultant pursuant to the provisions of Paragraphs 9(a), 9(b) or 9(c), the
Company shall be required to offer to the Consultant the opportunity to provide
Marketing Services materially consistent with the terms and provisions hereof in
any country, province, territory, protectorate or other geopolitical body other
than the United States in which the Company establishes its business after the
date hereof ("Foreign Marketing Services"). If the Consultant agrees to provide
such Foreign Marketing Services on behalf of the Company, the Consultant and the
Company shall enter into an agreement containing terms and conditions that
are substantially similar the terms and conditions of this Agreement, relating
to the provision by the Consultant of Foreign Marketing Services.
7. No Third Party Obligation. The Consultant hereby represents to the
Company that neither the Consultant nor any manager, member or employee of the
Consultant has, nor will undertake any express or implied obligation to any
third party which conflicts with any of the Consultant's obligations to the
Company pursuant to the terms of this Agreement.
8. Confidentiality. The Consultant acknowledges that in the performance of
the Marketing Services hereunder, the Consultant will occupy a position of trust
and confidence. Accordingly, in order to facilitate the performance of this
Agreement and the activities contemplated by its proprietary and/or confidential
information or, during the course of the Consultant's performance of the
Marketing Services hereunder, the Consultant may discover or develop certain
proprietary and/or confidential information of the Company. As used herein, the
term "proprietary and confidential information" of the Company shall include all
information of or relating to the Company (including, but not limited to,
present or prospective market, sales, product, customer and referral source
information, prices and pricing structure, contractual policies and procedures,
arrangements company practices product and process knowledge, cost and supplier
information, personnel data, and any strategy or plans related to any of the
foregoing) which is not generally available or disclosed to the public by the
Company. The Consultant acknowledges that all such information constitutes
confidential and/or proprietary information of the Company and agrees that the
Consultant, and the members, managers, and employees of the Consultant, shall
keep such information confidential;. the Consultant shall use such information
solely for the purpose of performing its obligations hereunder or activities
contemplated by this Agreement; and that neither the Consultant nor any of its
members, managers or employees shall otherwise disclose or make use of such
information during the term of this Agreement or afterwards. All written
information, drawings, documents and materials prepared by the Consultant in the
course of or as a result of its performance of this Agreement shall be the sole
and exclusive property of the Company, and will be delivered to the Company by
the Consultant on demand or promptly after expiration or termination of this
Agreement, together with all written information, drawings, documents and
materials, if any, furnished by the Company in connection with the Consultant's
performance of its obligations hereunder.
9. Termination. In addition to the termination of this Agreement as
described in Paragraph 3, above, this Agreement may be terminated prior to the
end of the Initial Term, the Extension Term (if applicable), or any subsequent
twelve (12) month period as described in Paragraph 3, above (a) by the
Consultant upon ten (10) days notice in the event the Company fails to make any
payment to the Consultant described herein, unless the Company pays the full
amount of such payment to the Consultant within such ten (10) days period, (b)
other than as described in (a) immediately above, by either party hereto (the
"Notifying Party") upon thirty (30) days notice to the other party (the
"Breaching Party") that the Breaching Party has violated or failed to perform
any material provision of this Agreement, unless the Breaching Party cures or
otherwise corrects such breach in such thirty (30)-day period to the reasonable
satisfaction of the Notifying Party, or (c) immediately and without notice by
any party hereto in the event the other party hereto (i) makes an assignment for
the benefit of creditors; (ii) files a voluntary petition in bankruptcy on
behalf of such party; (iii) is adjudicated a bankrupt or insolvent; (iv) files a
petition or answer seeking for itself any reorganization, arrangement,
composition, readjustment,
liquidation, dissolution or similar relief under any statue, law or regulation;
(v) files an answer or other pleading admitting or failing to contest the
material allegations of a petition filed against it in any proceeding set forth
in (iv) above; (vi) seeks, consents to, or acquiesces in the appointment of a
trustee, receiver or liquidator of such party or of all or any substantial part
of his, her or its properties; or (vii) liquidates.
10. Governing Law. The interpretation and performance of this Agreement
shall be governed by the laws of the State of New York, without giving effect to
its conflicts of law provisions. Each party hereby agrees that any claims,
demands, lawsuits, proceedings and controversies arising from or relating to
this Agreement shall be brought and heard in federal or state courts of general
jurisdiction located in the State of New York, and each party hereby consents to
the subject matter and personal jurisdiction of such courts in respect thereof.
11. Notices. All notices, requests, demands, reports, statements or other
communications required to be given hereunder or relating to this Agreement
shall be in writing and shall be deemed to have been duly given (a) on the date
of service if personally served on the party to whom notice is given, (b) five
(5) days after the date of mailing if mailed to the party to whom notice is to
be given, by first class mail, registered or certified, return receipt
requested, postage prepaid, or (c) on the next business day if mailed by
overnight mail, and properly addressed to the other party at the address for
such other party first set forth above. Either party may at any time direct in
writing that all communications or particular communications or particular types
of communications be delivered to specific designees other than those specified
herein by notifying the other party in the manner specified herein.
12. Miscellaneous.
--------------
(a) The terms and conditions of this Agreement constitute the entire
agreement between the parties with respect to the subject matter hereof and
supersede all previous communications or agreements, either oral or written,
between the parties. There are no understandings, representations or warranties
of any kind whatsoever, except as expressly set forth herein.
(b) The failure of any party to enforce at any time any of the provisions of
this Agreement shall not be construed to be a waiver of any such provisions, nor
in any way affect the validity of this Agreement or any part hereof or the right
of any party thereafter to enforce any such provisions. No waiver of any breach
of this Agreement shall be deemed a waiver of any other or subsequent breach,
whether of the same provision or otherwise.
(c) This Agreement is personal in nature. Neither party may assign this
Agreement or any of its rights hereunder nor delegate or otherwise transfer any
of its obligations in connection herewith without the prior written consent of
the other party hereto; provided, however, that the Company shall have the right
at any time, and from time to time, to assign this Agreement to its parent or
any affiliate or subsidiary or any successor to its business. This Agreement
shall inure to the benefit of and be binding on the parties hereto and their
respective successors, legal representatives, heirs and permitted assigns. In
the event the Company sells,
assigns, transfers or otherwise hypothecates all or any material portion of its
Business for which the Consultant is providing Marketing Services pursuant to
the terms hereof, the Company shall cause the terms and provisions of this
Agreement to apply to such successor in interest or business transferred to such
successor in interest.
(d) It is the intention of the parties that this Agreement be fully
enforceable in accordance with its terms, and that the provisions hereof be
interpreted so as to be enforceable to the maximum extent permitted by
applicable law. If any provision of this Agreement is held to be invalid or
unenforceable by a court of competent jurisdiction, the remainder of the
Agreement, to the extent not so held, shall nevertheless remain in full force
and effect and shall be construed, to the extent possible, in such a way that
the purpose of this Agreement, as intended by the parties, can be achieved in a
lawful manner.
(e) The existence of any claim or cause of action of Consultant against the
Company whether predicated upon or arising under this Agreement or otherwise
shall not constitute a defense to the enforcement by the Company of the terms
and conditions hereof.
(f) No amendment or modification of this Agreement or waiver of the terms or
conditions thereof shall be binding upon any party unless approved in writing by
an authorized representative of such party.
(g) It is the explicit intention of the parties hereto that no person or
entity other than the parties hereto is or shall be entitled to bring any action
to enforce any provision of this Agreement against either of the parties hereto,
and that the covenants, undertakings and agreements set forth in this Agreement
shall be solely for the benefit of, and shall be enforceable only by, the
parties hereto or their respective successors and assigns as permitted
hereunder.
(h) All references in this Agreements to dollars or other denomination
amounts shall refer to U.S. funds.
(i) In this Agreement, where applicable, reference to the singular shall
include the plural and references to the plural shall include the singular.
(j) Neither course of performance nor course dealing nor usage of trade
shall be used to interpret, construe, qualify, explain or supplement any of the
terms of the Agreement.
(k) All captions or titles used in this Agreement are for convenience or
reference only and shall not affect its construction or interpretation.
(l) The provisions of Paragraphs 4(b), 4(e), 6 and 8 hereof shall survive
and continue after the expiration or termination of the Agreement.
(m) This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original, but all of which shall constitute one and the
same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the day and year first above written.
FETCHOMATIC GLOBAL INTERNET INC. XXXXXX GROUP LLC
By: /s/ Xxxxx Xxxxxx By: /s/ signed
Its: President Its: Managing Member
EXHIBIT 1
SALES GOALS
Initial Term: $6,400,000
Extension Term and each consecutive 12-month period thereafter: $13,000,000
EXHIBIT 4(B)
SOURCES OF BANNER ADVERTISING FEES
All revenue from:
- Sales of advertising in connection with the promotional program or
programs (including, but not limited to, advertising sales packages) developed
by the Consultant, whether generated by the Consultant, the Consultant's sales
force, a direct sales organization established by the Consultant, the Company or
its employees; and
- Sales of advertising other than in connection with the promotional program
or programs developed by the Consultant (i.e., "a la carte" advertising sales),
whether generated by the Consultant, the Consultant's sales force or a direct
sales organization established by the Consultant;
whether derived from the initial sale, follow-on sales or any continuation,
extension, or replacement of any of the foregoing.
