EXHIBIT 10.1
CONSULTING AGREEMENT
1. Parties
1.1. This consulting agreement (this "Agreement") is made and entered
into effective as of July 10, 2000 (the "Effective Date") by and between
xxxxxxxxxxxx.xxx, Inc. (the "Company"), an Idaho corporation, with its principal
office located at 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 0, Xxxx Xxxxx, Xxxxxxx 00000,
and Xxxxxxx X. Xxxxxxxx (the "Consultant"), a Turks and Caicos resident, whose
address is PBM ARAWAK House, Front Street, Grand Turk, Turks and Caicos Islands,
British West Indies.
2. Recitals
2.1. The Company is a virtual, B2C vertical roll-up of the New Age and
alternative health communities that seeks to provide the most comprehensive
online source of related products, services, and interactive educational and
informational content available, creating one of the most demographically
targeted network of Web sites on the Internet. The Company is actively seeking
to increase the public's awareness of its presence, products and services
worldwide, to promote its branded identity across the spectrum of products and
services that it offers, and to increase the stickiness of its Website from
users outside of the US. The Company's current marketing efforts have been
directed primarily to the US market, and it now wishes to increase those efforts
worldwide. In addition, the Company seeks to expand its vertical roll-up efforts
by identifying target companies as acquisition candidates worldwide.
2.2. The Consultant has developed meaningful contacts with a
significant number of B2C Internet companies located primarily in western
Europe, and to a lesser extent in eastern Europe and Asia, that offer products
and services that may be synergistically compatible with those the Company
offers and proposes to offer.
2.3. The Company wishes to engage the services of the Consultant as an
independent contractor to advise and consult with it with respect to (i)
increasing the public's awareness of the Company's presence, products and
services worldwide, promoting its branded identity across the spectrum of
products and services that it offers and increasing the stickiness of its
Website, primary through exploring strategic alliances, partnering opportunities
and other cooperative ventures with the Consultant's contacts referred to in
paragraph 2 above, (ii) the Company's expansion into non-US markets, primarily
in western Europe, but also in eastern Europe, Asia and other markets worldwide,
and (iii) to identify and evaluate possible acquisition candidates and marketing
opportunities for the Company in those markets, all on the terms and subject to
the conditions set forth in this Agreement.
2.4. The Consultant is willing to accept this engagement, on the terms
and subject to the conditions set forth in this Agreement.
3. Engagement
3.1. ENGAGEMENT. The Company hereby engages the Consultant to perform
the Services set forth in paragraph 3.4 for the Term set forth in paragraph 3.2,
and the Consultant hereby accepts this engagement, on the terms and subject to
the conditions set forth in this Agreement
3.2. TERM. The term of this engagement shall be for the one year period
beginning on July 10, 2000, and ending on July 10, 2001 (the "Term"), unless
sooner terminated as provided in paragraph 7.1 below.
3.3. RELATIONSHIP. The relationship between the Company and the
Consultant created by this Agreement is that of independent contractors, and the
Consultant is not and shall not be deemed to be an employee of the Company for
any purpose.
3.4. SERVICES. The services that the Consultant shall render to the
Company under this Agreement (the "Services") are and shall be limited to the
following:
(a) The Consultant shall, from time to time as the Company may
request, solely for the Company's benefit and not for the benefit of any third
party, advise and consult with the Company's board of directors (the "Board")
and executive officers with respect to (i) increasing the public's awareness of
the Company's presence, products and services worldwide, promoting its branded
identity across the spectrum of products and services that it offers and
increasing the stickiness of its Website, primary through exploring strategic
alliances, partnering opportunities and other cooperative ventures with the
Consultant's contacts referred to in paragraph 2 above, (ii) the Company's
expansion into non-US markets, primarily in western Europe, but also in eastern
Europe, Asia and other markets worldwide, and (iii) the Company's merger and
acquisition strategies, including the identification and evaluation of targets
in Europe, Asia and other non-US markets.
(b) If requested by the Board, the Consultant will prepare and
deliver to the Board the following documents (collectively, the "Opinions"): (i)
a formal valuation (the "Valuation") of the target and, if requested by the
Board, a valuation of any non-cash consideration being offered for the target;
(ii) an opinion (the "Fairness Opinion") as to the fairness from a financial
point of view of the target to the Company's minority stockholders. If requested
by the Board, the Consultant shall also prepare summaries of the Opinions, which
the Company may include in any circulation regarding its acquisition of the
target.
(c) The Consultant shall prepare the Opinions in accordance
with his professional judgment, and the Opinions shall comply with applicable
securities laws requirements. The Consultant and his legal counsel shall consult
with the Board and its legal counsel at the request of either with respect to
any legal matters related to a proposed Opinion prior to its delivery. Any
advice or opinions (including the Opinions) to be delivered by the Consultant
shall be made subject to and based upon such limitations, qualifications and
reservations as the Consultant, in his judgment, deems necessary or prudent
under the circumstances.
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(d) The Company shall not cause, permit or allow any of the
Opinions or other oral or written opinions or advice rendered by the Consultant
under this Agreement to be reproduced or published, or furnished to or used by
any third party, in whole or in part, without the Consultant's prior written
consent (except as may be required by applicable securities laws, and then only
after consultation with the Consultant). Such consent shall extend only to the
disclosure of the specific Opinion in the particular document as described in
the consent, and will not extend to any subsequent disclosure in any other
document. Any document prepared by or on behalf of the Company or the Board that
contains or refers to any Opinion or portion thereof shall be provided to the
Consultant and his legal counsel for review prior to its use, and shall be in
form and substance satisfactory to the Consultant and his legal counsel. The
Consultant shall have no responsibility for any such disclosure or document,
except for his Opinions or summaries thereof prepared by him.
(e) The Consultant shall be entitled at any time to withdraw,
amend or supplement any Opinion in the event that he reasonably concludes that
there has been a material change in the factors upon which that Opinion is based
and, that, as a result thereof, there has been a material change in the
Valuation following the dates thereof and prior to the completion of the
Company's acquisition of the target.
3.5. NO CAPITAL RAISING SERVICES. The Services do not include
consulting with or advising or assisting the Company, in any manner with in
connection with the offer or sale of securities in any capital-raising
transaction, or to directly or indirectly promote or maintain a market for any
of the Company's securities.
3.6. LOCATION. The Company and the Consultant intend that the Services
shall be rendered primarily from the Consultant's offices, in Turks & Cacios,
and in any event outside of the United States, and that the Services may be
rendered by telephone and by encrypted, secure e-mail communication. The
Consultant shall not be required to perform any services in the United States,
or in any manner that would subject the Consultant's Fee define in paragraph
4.1below to US federal or state income taxation. The Consultant shall, if
requested by the Company and at the Company's expense, attend meetings of the
Company's board of directors (the "Board") not more frequently than quarterly,
provided that the Company shall have provided the Consultant with an opinion of
tax counsel satisfactory to the Consultant that doing so will not subject the
Consultant's Fee to US federal income taxation. The Consultant shall be
reasonably available by telephone to consult with the Board at regular and
special meetings thereof.
3.7. TIME; NON-EXCLUSIVE. The Consultant shall devote as much time to
the performance of the Services as is reasonably necessary, but the Consultant
shall not required to devote any fixed number of hours or days to the
performance of the Services. The Company recognizes that the Consultant has and
will continue to have other clients and business, and agrees that this
engagement is non-exclusive.
3.8. SUPPORT STAFF AND FACILITIES. The Consultant shall furnish his own
support staff, office, telephone, and other facilities and equipment necessary
to the performance of the Services, and the Company shall not be required to
provide the Consultant with any such staff, facilities or equipment.
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4. The Consultant's Fee and Expenses.
4.1. THE CONSULTANT'S FEE. The Company shall issue and deliver to the
Consultant, as a fee for his Services under this Agreement (the "Consultant's
Fee"), 500,000 shares of the Company's common stock (the "Shares"). The
Consultant's Fee shall be fully earned and non-refundable in consideration of
his execution of this Agreement. Promptly upon the execution of this Agreement,
the Company shall file a registration statement on Form S-8 (the "Registration
Statement") with the Securities and Exchange Commission (the "SEC"). The Company
shall issue and deliver the Shares to the Consultant promptly after filing the
Registration Statement.
4.2. OFFSET; WITHHOLDING; TAXES. The Company shall pay the Consultant's
Fee to the Consultant without offset, deduction or withholding of any kind or
for any purpose. The Consultant shall pay any federal, state and local taxes
payable by him with respect to the Consultant's Fee, and shall indemnify the
Company against and hold it harmless from any such taxes.
4.5. EXPENSES. Except for expenses incurred in attending meetings of
the Board as set forth in paragraph 3.6 above, the Consultant shall pay all
expenses incurred by him in connection with his performance of the Services
under this Agreement, except for such expenses as the Company shall expressly
agree in writing to pay.
5. Representations, Warranties and Covenants:
5.1. The Company represents and warrants to and covenants with the
Consultant that:
(A) INCORPORATION, GOOD STANDING, AND DUE QUALIFICATION. The
Company is a corporation duly incorporated, validly existing and in good
standing under the laws of the jurisdiction of its incorporation; has the
corporate power and authority to own its assets and to transact the business in
which it is now engaged and proposes to be engaged in; and is duly qualified as
a foreign corporation and in good standing under the laws of each other
jurisdiction in which such qualification is required.
(B) CORPORATE POWER AND AUTHORITY. The execution, delivery and
performance by the Company of this Agreement, including the issuance of the
Shares have been duly authorized by all necessary corporate action and do not
and will not (i) require any consent or approval of the Company's stockholders;
(ii) contravene the Company's charter or bylaws; (iii) violate any provision of
any law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award presently in effect having applicability to the Company;
(iv) result in a breach of or constitute a default under any agreement or other
instrument to which the Company is a party.
(C) LEGALLY ENFORCEABLE AGREEMENT. This Agreement is, and the
Option, when delivered under this Agreement will be, legal, valid and binding
obligations of the Company, enforceable against it in accordance with their
respective terms, except to the extent that such enforcement may be limited by
applicable bankruptcy, insolvency and other similar laws affecting creditors'
rights generally.
(D) THE SHARES. The Shares are duly and validly authorized,
and when issued will be fully paid and nonassessable.
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5.2. The Consultant represents and warrants to and covenants with
the Company that:
(a) The Consultant is an accredited investor as defined in SEC
Rule 501(a).
(b) The Consultant has such knowledge and experience in
financial and business matters that he is capable of evaluating the merits and
risks of his election to receive the Consultant's Fee in the form of the Shares,
rather than in cash.
6. Conditions Precedent.
6.1. The Consultant's obligation to perform this Agreement is subject
to the conditions precedent that the Company shall have filed the Registration
Statement and issued and delivered the Shares to the Consultant pursuant
thereto.
7. Termination.
7.1. This Agreement may be terminated prior to the expiration of the
Term:
(a) By the Company at any time by giving the Consultant
written notice of its election to do so; or
(b) By the Consultant by giving the Company written notice of
its election to do so, if any representation or warranty of the Company
contained in this Agreement is materially inaccurate as of the Effective Date,
or if the Company (i) has breached any warranty, covenant or other provision of
this Agreement in any material respect; or (ii) has committed an unlawful act or
gross negligence or willful misconduct in the performance of this Agreement.
8. General Provisions.
8.1. ENTIRE AGREEMENT; MODIFICATION; WAIVERS. This Agreement contains
the entire agreement of the parties, and supersedes any prior agreements with
respect to its subject matter. There are no agreements, understandings or
arrangements of the parties with respect to the subject matter of this Agreement
that are not contained herein. This Agreement shall not be modified except by an
instrument in writing signed by the parties. No waiver of any provision of this
Agreement shall be effective unless made in writing and signed by the party
making the waiver. The waiver of any provision of this Agreement shall not be
deemed to be a waiver of any other provision or any future waiver of the same
provision.
8.2. NOTICES. All notices given under this Agreement shall be in
writing, addressed to the parties as set forth below, and shall be effective on
the earliest of (i) the date received, or (ii) on the second business day after
delivery to a major international air delivery or air courier service (such as
Federal Express or Network Couriers):
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IF TO THE COMPANY: IF TO THE CONSULTANT:
xxxxxxxxxxxx.xxx, Inc. Xx. Xxxxxxx X. Xxxxxxxx
Suite 7 PBM ARAWAK House
0000 Xxxxx Xxxxxx Xxxxxx Front Street, Grand Turk
Xxxx Xxxxx, Xxxxxxx 00000 Turks and Caicos Islands
Attention: Xx. Xxx Xxxxxx, Xx., CEO British West Indies
8.3. DISPUTE RESOLUTION. Any controversy or claim arising out of or
relating to this Agreement (whether in contract or tort, or both) shall be
determined by binding arbitration at Grand Turk, Turks and Caicos Islands, in
accordance with the Commercial Arbitration Rules of the International Chamber of
Commerce, by a panel of three arbitrators, one chosen by each of the parties and
the third by the two so chosen. If the two arbitrators cannot agree on a third,
then the third shall be appointed in accordance with such rules. The prevailing
party in any arbitration proceeding shall be awarded reasonable attorneys fees
and costs of the proceeding. The arbitration award shall be final, and may be
entered in and enforced by any court having jurisdiction.
8.4. LAW GOVERNING. This Agreement shall be construed and enforced in
accordance with the laws of the Turks & Caicos Islands; provided, however, if
any provision of this Agreement is unenforceable under the laws of the Turks and
Caicos Islands but is enforceable under the laws of the State of Florida, then
the laws of the State of Florida shall govern the construction and enforcement
of that provision.
8.5. BINDING EFFECT. This Agreement shall be binding on, and shall
inure to the benefit of the parties and their respective successors in interest.
8.6. CONSTRUCTION, COUNTERPARTS. This Agreement shall be construed
as a whole and in favor of the validity and enforceability of
each of its provisions, so as to carry out the intent of the
parties as expressed herein. Heading are for the convenience
of reference, and the meaning and interpretation of the text
of any provision shall take precedence over its heading. This
Agreement may be signed in one or more counterparts, each of
which shall constitute an original, but all of which, taken
together shall constitute one agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date set forth after their respective signatures, effective as of the Effective
Date
THE COMPANY: THE CONSULTANT:
xxxxxxxxxxxx.xxx, Inc. Xxxxxxx X. Xxxxxxxx
BY: /S/ XXXXXX XXXXXX, XX. /S/ XXXXXXX X. XXXXXXXX
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Xxxxxx Xxxxxx Xx., CEO
DATE SIGNED JULY 10, 2000 DATE SIGNED JULY 10,2000
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