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EXHIBIT 10.31
CONSULTING AGREEMENT
This Consulting and Representation Agreement is made effective the 5th day
of November, 1998 by and between GOLF ONE INDUSTRIES, INC. ("Corporation"), and
XXXXX X. XXXXXXX ("Consultant").
WHEREAS, the Corporation is in need of the special expertise in connection
with general financial matters; and
WHEREAS, Consultant has knowledge concerning such matters and can be
available from time to time to assist the Corporation regarding its general
financial matters; and
WHEREAS, the Corporation desires to have the benefit of Consultant's
knowledge and experience by retaining him as a consultant pursuant to the terms
hereof.
NOW, THEREFORE, the Corporation and Consultant hereby agrees as follows:
1. Consulting Services. Corporation hereby engages Consultant to provide to
Corporation, during the Term (defined below), such consulting services
respecting Corporation's general financial matters as shall be reasonably
requested of him by Corporation. In his capacity as a consultant hereunder,
Consultant shall occasionally consult with and advise Corporation's Officers or
Board of Directors on such matters. Corporation acknowledges that during the
Term hereof while acting as a consultant to Corporation, Consultant may be
engaged in other business or employment activities (including but not limited to
consulting and other activities with other entities which may be competitors of
Corporation or which do business in the same markets) and that his consulting
duties hereunder are not inconsistent with, and shall not unreasonably
interfere with, such other activities. Accordingly, the parties agree that such
consultations with Consultant hereunder shall be arranged in keeping with their
mutual convenience and provided, whenever possible, by written, telephonic or
other telecommunication media at Corporation's expense and shall not exceed ten
(10) hours in any thirty (30) day period. The parties further agree that
Consultant's duties under this Agreement shall be limited to verbal discussions
and Consultant shall not be required to prepare or deliver written reports or
similar items to Corporation.
2. Term. The term of the consulting arrangement described in this Agreement
shall be for one (1) year, commencing on November 6, 1998 and ending on November
5, 1999 (the "Term").
3. Consideration. As consideration hereunder, Corporation agrees to pay to
Consultant the following:
(a) The sum of FIFTEEN THOUSAND ($15,000.00) DOLLARS, payable
immediately upon the execution of this Agreement; and
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(b) A warrant to purchase 215,000 shares of the common stock of
Corporation, such warrant to be in the form of Exhibit A hereto and delivered
to Consultant immediately upon the execution of this Agreement.
The parties also agree that Corporation shall promptly reimburse or
directly pay for the reasonable travel and other out-of-pocket expenses
incurred by Consultant during the performance of his consulting activities
hereunder.
4. Independent Contractor. Corporation and Consultant expressly
acknowledge and agree that Consultant's services shall be as an independent
contractor and nothing contained in this Agreement shall be construed as making
Consultant an employee of Corporation.
5. Confidential Information. Consultant agrees that Consultant shall not
directly or indirectly use or divulge to any third party any of Corporation's
confidential information which is not generally known to the public or industry
in which Corporation is engaged.
6. Miscellaneous. This Agreement shall be construed under and in
accordance with the laws of the State of Ohio and shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs,
successors and assigns. This Agreement contains the entire agreement of the
parties with respect to the subject matter hereof and supersedes and cancels
all prior or contemporaneous understandings, agreements and discussions
between the parties. Accordingly, the parties do hereby fully expect and
anticipate that any court, arbitrator or mediator, in any hearing or proceeding
in which the interpretation or enforcement of this Agreement is sought or
requested, or otherwise at issue, shall apply strictly the so-called "Rule of
Parol Evidence." No modification, amendment or waiver of any provisions of this
Agreement shall in any event be effective unless the same shall be in writing
and duly executed by all of the parties hereto. In case any one or more of the
provisions contained in this Agreement shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not effect any other provision hereof, and this Agreement
shall be construed as if such invalid, illegal or unenforceable provision had
never been contained herein.
All terms and words used in this Agreement, regardless of the number and
gender in which they are used shall be deemed and construed to include any
other number, singular or plural, and any other gender, masculine, feminine or
neuter, as the context or sense of this Agreement may require.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement on the
dates entered below after their respective signatures.
GOLF ONE INDUSTRIES, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx, Xx.
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Title: President XXXXX X. XXXXXXX
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Date: 11-5-98 Date:
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EXHIBIT A
THE WARRANTS REPRESENTED BY THIS CERTIFICATE ("WARRANTS") AND THE UNDERLYING
WARRANT SHARES ("WARRANT SHARES") HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). THE WARRANTS MAY NOT BE
EXERCISED OFFERED OR SOLD UNLESS, IN EACH CASE, THE WARRANTS AND WARRANT SHARES
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OR AN EXEMPTION FROM SUCH
REGISTRATION IS AVAILABLE, AS EVIDENCED BY AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY.
THE WARRANTS REPRESENTED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED, SOLD,
PLEDGED, HYPOTHECATED AND ENCUMBERED EXCEPT PURSUANT TO THE PROVISIONS CONTAINED
HEREIN.
WARRANTS TO PURCHASE COMMON STOCK
Golf One Industries, Inc., a Delaware corporation (the "Company") hereby
grants to Xxxxx X. Xxxxxxx (the "Holder") Two Hundred Fifteen Thousand (215,000)
transferable warrants (the "Warrants") for the purchase of common stock of the
Company (the "Common Stock"), with each whole Warrant entitling the Holder to
purchase one share of Common Stock (each a "Warrant Share" and collectively the
"Warrant Shares") on the terms and subject to the conditions set forth herein.
1. TERM. The Warrants may be exercised, in whole or in part, at any time
and from time to time from the date hereof until 5:00 Pacific Time on the date
which is three years from the date of the closing of the Company's initial
public offering of Common Stock pursuant to a Registration Statement filed with,
and declared effective by, the Securities and Exchange Commission (the "Exercise
Period").
2. EXERCISE PRICE. The initial exercise price of each whole Warrant shall
be equal to 70% of the Fair Market Value (as defined below) of the Company's
common stock on the date of exercise. "Fair Market Value" means the average
closing sale price for the twenty trading days immediately preceding the
Exercise Date (as defined below) or, if there is no last-sale reporting for the
Common Stock at such time, then the value as determined in good faith by the
Board of Directors of the Company.
3. EXERCISE OF WARRANTS. The Warrants are exercisable on the terms
provided herein at any time during the Exercise Period by the surrender of this
certificate to the Company at its principal office together with the Notice of
Exercise annexed hereto duly completed and executed on behalf of the Holder,
accompanied by payment in full, in immediately available funds, of the amount of
the aggregate Exercise Price of the Warrant Shares being purchased upon such
exercise. The Holder shall be deemed the record owner of such Warrant Shares as
of and from the close of business on the date on which this certificate is
surrendered together with the completed Notice of Exercise and payment in full
as required above (the "Exercise Date"). The Company agrees that the Warrant
Shares so purchased shall be issued as soon as
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practicable thereafter. It shall be a condition to the exercise of the Warrants
that the Holder or any transferee hereof provide an opinion of counsel
reasonably satisfactory to the Company that the Warrants and the Warrant Shares
to be delivered upon exercise thereof have been registered under the Securities
Act or that an exemption from the registration requirements of the Securities
Act is available.
4. FRACTIONAL INTEREST. In lieu of issuing fractional shares of Common
Stock upon exercise of the Warrants, the Company may pay the Holder a cash
amount determined by multiplying the fraction of a share otherwise issuable by
the Fair Market Value of one share of Common Stock.
5. WARRANTS CONFER NO RIGHTS OF STOCKHOLDER. The Holder shall not have
any rights as a stockholder of the Company with regard to the Warrant Shares
prior to the Exercise Date for any actual purchase of Warrant Shares.
6. INVESTMENT REPRESENTATION. Neither the Warrants nor the Warrant
Shares issuable upon the exercise of the Warrants have been registered under
the Securities Act or any state securities laws. The Holder acknowledges by
signing this certificate that, as of the date of this Warrant and at the time
of exercise that: (a) the Holder has acquired the Warrant or the Warrant
Shares, as the case may be, for the Holder's own account; (b) the Holder has
acquired the Warrants or the Warrant Shares, as the case may be, for investment
and not with a view to distribution; and (c) either the Holder has a
pre-existing personal or business relationship with the Company or its
executive officers, or by reason of the Holder's business or financial
experience the Holder has the capacity to protect the Holder's own interests in
connection with the transaction. The Holder agrees, by acceptance of this
certificate, that any Warrant Shares purchased upon exercise of the Warrants
may have to be held indefinitely or until an exemption from registration is
available, as evidenced by an opinion of counsel reasonably satisfactory to the
Company. The Holder, by acceptance of this certificate, consents to the
placement of a restrictive legend (the "Legend")on the certificates
representing any Warrant Shares that are purchased upon exercise of the
Warrants during the applicable restricted period under Rule 144 or any other
applicable restricted period under the Securities Act. The Legend shall be in
substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, SUCH SHARES HAVE BEEN
ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR
SUCH SHARES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, UNLESS IN THE
WRITTEN LEGAL OPINION (APPROVED BY THE COMPANY) OF COUNSEL SATISFACTORY
TO THE COMPANY, SUCH REGISTRATION IS NOT REQUIRED.
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7. RESERVATION OF SHARES. The Company agrees that, at all times during
the Exercise Period, the Company will have authorized and reserved, for the
exclusive purpose of issuance and delivery upon exercise of the Warrants, a
sufficient number of shares of its Common Stock to provide for the issuance of
the Warrant Shares.
8. ADJUSTMENT FOR CHANGES IN CAPITAL STOCK. If the Company at any time
during the Exercise Period shall, by subdivision, combination or
reclassification of securities, change any of the securities into which the
Warrants are exercisable into the same or a different number of securities of
any class or classes, the Warrants shall thereafter entitle the Holder to
acquire such number and kind of securities as would have been issuable as a
result of such change with respect to the Warrant Shares if the Warrant Shares
had been outstanding immediately prior to such subdivision, combination, or
reclassification.
9. LOSS, THEFT, DESTRUCTION OR MUTILATION OF CERTIFICATE. Upon receipt
by the Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of any certificate representing the Warrants or the
Warrant Shares (referred to herein as the "original certificate"), and in case
of loss, theft or destruction, of indemnity or security reasonably
satisfactory to the Company, and upon reimbursement to the Company of all
reasonable expenses incidental thereto, and upon surrender and cancellation of
the original certificate if mutilated, the Company will make and deliver a new
certificate of like tenor in lieu of the original certificate.
10. ASSIGNMENT. The Warrants may be transferred subject to the provisions
of Section 6.
11. GENERAL. This certificate shall be governed by and construed in
accordance with the laws of the State of Delaware applicable to contracts
between Delaware residents entered into and to be performed entirely within the
State of Delaware. The headings herein are for purposes of convenience and
reference only and shall not be used to construe or interpret the terms of this
certificate. The terms of this certificate may be amended, waived, discharged
or terminated only by a written instrument signed by both the Company and the
Holder. All notices and other communications from the Company to the Holder
shall be mailed by first-class registered or certified mail, postage pre-paid,
to the address furnished to the Company in writing by the last Holder who shall
have furnished an address to the Company in writing.
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NOTICE OF EXERCISE
To: Golf One Industries, Inc. (the "Company")
1. The undersigned hereby elects to exercise a total of ---------
Warrants for the purchase of a like number of Warrant Shares, and tenders
herewith payment of the Exercise Price for such shares in full.
2. In exercising the Warrants, the undersigned hereby confirms and
acknowledges that: (a) the Warrant Shares are being acquired solely for the
account of the undersigned for investment and not with a view to or for sale in
connection with any distribution; (b) the undersigned has a pre-existing
personal or business relationship with the Company or its executive officers, or
by reason of the undersigned's business or financial experience the undersigned
has the capacity to protect the undersigned's own interests in connection with
the exercise of the Warrants; and (c) the undersigned will not offer, sell or
otherwise dispose of any of the Warrant Shares unless the Warrant Shares have
been registered under the Securities Act or an exemption from such registration
is available, as evidenced by an opinion of counsel reasonably satisfactory to
the Company.
3. Please issue a certificate representing the Warrant Shares in the
name of the Holder and deliver the certificate to the address set forth below.
4. Please issue a new certificate representing the unexercised portion
(if any) of the Warrants in the name of the Holder and deliver the certificate
to the address set forth below.
Dated:
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(Name)
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(Authorized Signature)
Address for Delivery:
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