CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (this "Agreement") is made this 24th day of November 2003, by and between Online Innovation, Inc., having an office at 0000 Xxxxx Xx., Xxxxx 000, Xxxxxxxxx, XX, Xxxxxx X0X 0X0, hereinafter referred to as "the Client" and Westport Strategic Partners, Inc., having an office at 000 X. Xxxxxxx Xxxx., Xxxxx 0000, Xx. Xxxxxxxxxx, Xxxxxxx 00000, hereinafter referred to as "the Consultant".
WITNESSETH:
WHEREAS, the Client wishes to retain the services of the Consultant for the period provided in this Agreement, and the Consultant is willing to provide its services to the Corporation for the period under the terms and conditions hereinafter provided.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth, the parties hereto agree as follows:
1. Appointment
Client hereby appoints and engages Consultant as its advisor and to provide
the services described in paragraph 2 herein, pursuant to the terms and conditions
of this Agreement. Consultant accepts such engagement and agrees to perform
the services upon the terms and conditions of said Consulting Agreement.
2. Authority and Description of Services
During the term of this Agreement, Consultant shall furnish some or all of the
various services from time to time as requested by the Client and agreed upon
by the parties as described below:
| a. | Provide an independent research report, written
by a qualified CFA, which is distributed to a combination of broker dealers,
institutions, or micro and small-cap funds. Conduct follow-up conversations
with recipients of the research report and introduce them to the Client.
Provide a listing of interested recipients of the research report to the
Client and assist the Client in coordinating appointments with any interested
recipient. |
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| b. | Provide consultation on the shareholder relations
aspects of the Client, which includes assistance in developing an institutional
due diligence book. Assist Client in strategic planning for potential
mergers, acquisitions, and strategic relationships. |
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Consultant shall not be required to perform any investment banking related activities on behalf of Client as a condition of this Agreement. For the purposes of this Agreement investment-banking activities shall be defined as being any of the following:
| i. | The location, negotiation and/or securing of public
or private debt for Client. |
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| ii. | The location, negotiation and/or securing of any
public or private equity for Client. |
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| iii. | The production of any documentation that is to be
utilized for the sole purpose and activity as relating to subheadings
(1) and (2) above. |
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| iv. | Any other activities as may normally be associated
with the practice of investment banking. |
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3. Term of Agreement
This Agreement shall become effective upon execution hereof and shall continue
thereafter and remain in effect for a period of three (3) months. Thereafter,
this Consulting Agreement shall automatically renew for successive one-month
periods unless either party gives at least 10-business days written notice prior
to the expiration of the then current period that it does not wish for this
Consulting Agreement to extend for an additional one-month period. It is expressly
acknowledged and agreed by and between the parties hereto that Consultant shall
not be obligated to provide any services and/or perform any work related to
this Consulting Agreement until such time any agreed and/or specified retainer
(deposit, initial fee, down payment) in U.S. funds, and/or other specified and/or
agreed valuable consideration, has been received by Consultant as outlined on
Addendum "A". Time is of the essence with respect to payment by Client to Consultant.
4. Where Services Shall be Performed
Consultant's services shall be performed at the main office location of Consultant
or other such designated location(s) as Consultant and Client agree are the
most advantageous for the work to be performed.
5. Limitations on Services
The parties hereto recognize that certain responsibilities and obligations are
imposed by Federal and state securities laws and by the applicable rules and
regulations of stock exchanges, the National Association of Securities Dealers,
in-house "due diligence" or "compliance" departments of brokerage houses, etc.
Accordingly, Consultant agrees as follows:
| a. | Consultant shall NOT release any financial or other
information or data about Client without the consent and approval of Client.
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| b. | Consultant shall NOT conduct any meetings with financial
analysts without informing Client in advance of any proposed meeting;
the format or agenda of such meeting and Client may elect to have a representative
of Client attend such meeting. |
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| c. | Consultant shall NOT release any information or
data about Client to any selected or limited person(s), entity, or group
if Consultant is aware that such |
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| information or data has not been generally
released or promulgated and Client requests in writing that said information
or data is not to be so released or promulgated. |
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| 6. Duties of Client | |||
| a. |
Client shall supply Consultant, on a regular
and timely basis with all approved data and information about Client,
its management, its products, and its operations and Client shall be responsible
for advising Consultant of any facts which would affect the accuracy of
any prior data and information previously supplied to Consultant so that
Consultant may take corrective action. |
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| b. |
Consultant reports are not intended to
be used exclusively in the sale or offering of securities. Accordingly,
Client, by the execution hereof agrees to each of the points listed below
and to indemnify and hold Consultant harmless for any breach of these
representations and covenants. |
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| i. |
Client will keep Consultant apprised of the progress
of any offering of securities, including but not limited to S-8 filing
or Regulation S unless prohibited by Federal Securities laws. |
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| ii. |
Client will keep Consultant apprised of any current
or anticipated "Quiet Periods" subject to Federal Securities laws. |
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| iii.
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Client will not use Consultant's research reports
exclusively regarding the Client in connection with any offering of securities
without the prior written consent of Consultant. |
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| d. |
In that Consultant shareholders, officers,
employees, and/or members of their families may hold a position in and
engage in transactions with respect to Client securities, and in light
of the fact that Consultant imposes restrictions on such transactions
to guard against trading on the basis of material nonpublic information,
Client shall contemporaneously notify Consultant if any information or
data being supplied to Consultant has not been generally released or promulgated.
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| 7. Representation and Undertakings | |||
| a. |
Client shall be deemed to make a continuing
representation of the accuracy of any and all material facts; material,
information and data which it supplies to Consultant and Client acknowledges
its awareness that Consultant will rely on such continuing representation
in disseminating such information and otherwise performing its functions
hereunder. |
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| b. |
Consultant, in the absence of notice in
writing from Client, will rely on the continuing accuracy of material,
information and data supplied by Client. |
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| c. |
Client hereby authorizes Consultant to
issue, in Consultant's sole discretion, after notice to and approval by
Client, corrective, amendatory, supplemental, or explanatory press releases,
shareholder communications and reports or data supplied to analysts, broker-dealers,
market makers, or other members of the financial community. |
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| d. |
Client shall cooperate fully and timely
with Consultant to enable Consultant to perform its duties and obligations
under this Agreement. |
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| e. | The execution and performance of this Agreement
by Client has been duly authorized by the Management and Officers of Online
Innovation, Inc. in accordance with applicable law, and, to the extent
required, by the requisite number of shareholders of Client. |
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| f. | The performance by Client of this Agreement will
not violate any applicable court decree or order, law or regulation, nor
will it violate any provision of the organizational documents and/or bylaws
of Client or any contractual obligation by which Client may be bound.
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| g. | Client activities pursuant to this Agreement or
as contemplated by this Agreement do not constitute and shall not constitute
acting as a securities broker or dealer under Federal or state securities
laws; any contract between Client and a potential investor in Client shall
be such that Client would be acting merely as a consultant with respect
to such prospective investor obligations under this Agreement. |
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| h. | Client shall act diligently and promptly in reviewing
materials submitted to it by Consultant to enhance timely distribution
of the materials and shall inform Consultant of any inaccuracies contained
therein within a reasonable time prior to the projected or known publication
date. |
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| i. | Consultant shall make the initial draft report available
for review by the Client no later than 30 days after the execution of
this Agreement. |
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| j. | Client acknowledges that the report provided by
the analyst is not a buy/sell recommendation or price target recommendation.
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| k. | Client acknowledges that the analyst has the right
to distribute the report to their respective organizations and associations.
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| l. | Client acknowledges that the Consultant reserves
the right to halt or suspend services if Client becomes 30 days delinquent
on the compensation for services. |
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| 8. Representation and Indemnification of Consultant | ||
| a. | The execution and performance of this Agreement
by Consultant has been duly authorized by the Board of Directors of Consultant
in accordance with applicable law, and, to the extent required, by the
requisite number of shareholders of Consultant. |
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| b. | The performance by Client of this Agreement will
not violate any applicable court decree or order, law or regulation, nor
will it violate any provision of the organizational documents and/or bylaws
of Client or any contractual obligation by which Client may be bound.
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| c. | Consultant's activities pursuant to this Agreement
or as contemplated by this Consulting Agreement do not constitute and
shall not constitute acting as a securities broker or dealer under Federal
or state securities laws. |
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| d. | Consultant shall be diligent in the performance
of its duties under this Agreement and further represents and warrants
that it shall always perform such duties in a timely manner. |
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9. Mutual Indemnifications
Each of the Client and the Consultant agree that they will indemnify and hold
harmless each other, their respective affiliates, control persons, officers,
directors, employees and agents and each person who controls each of them within
the meaning of Section 15 of the Securities Act of 1933 or Section 20 of the
Securities Exchange Act of 1934 (the Consultant or the Client, as the case may
be, and each such entity and person being hereinafter called an "Indemnified
Party") from and against any and all losses, claims, damages, liabilities, costs
or expenses (including reasonable attorneys' and accountants' fees) as incurred,
to which such Indemnified Party may become subject which are (a) related to
or arise out of actions taken or omitted to be taken (including any untrue statements
made or any statements omitted to be made) by an Indemnified Party with the
Client's or the Consultant's consent or in conformity with the instructions
of, or actions taken or omitted to be taken by the Client or the Consultant
or (b) otherwise related to or arising out of each party's action pursuant to
this Agreement. The Client and the Consultant, as the case may be, also agree
to reimburse each Indemnified Party within thirty (30) days of submission of
an invoice with respect thereto for all expenses incurred (including fees and
disbursements of counsel) in connection with the investigation of or the preparation
for or defense of any pending or threatened formal or informal claim, action,
investigation or other proceeding caused by or arising out of or in connection
with the Consultant's or the Client's actions pursuant to this Agreement, whether
or not the Consultant or the Client, as the case may be, is named party thereto
and whether or not any liability results therefrom. The Client or the Consultant,
as the case may be, will not be responsible, however, for any loss, claim, damage
or liability for which indemnification is sought solely pursuant to the first
sentence of this paragraph which a court of competent jurisdiction shall have
determined by a final judgment to have resulted primarily from willful misconduct
or gross negligence on the part of the Indemnified Party seeking indemnification
hereunder.
Promptly after receipt by any Indemnified Party of notice of any complaint or the commencement of any action or proceeding in connection with any matter related to a party's activities pursuant to the letter agreement, such party will notify the Client or the Consultant, as the case may be, in writing, of such complaint or of the commencement of such action or proceeding and if the Client or the Consultant so elects or is requested by the other party, the Client or the Consultant, as the case may be, will assume the defense of such action or proceeding, including the employment of counsel reasonably satisfactory to the other party and the payment of the fees and disbursements of such counsel, in which event the Client or the Consultant, as the case may be, shall not be obligated to pay the fees and disbursements of separate counsel for the other party in such action. However, failure by the other party to so notify the Client or the Consultant, as the case may be, of such claim or such commencement shall not relieve the Client or the Consultant, as the case may be, from any obligation hereunder except to the extent that such failure shall result in prejudice to the Client or the Consultant, as the case may be. In the event, however, that the other party's legal counsel shall determine that defenses may be available to an Indemnified Party that are different from or in addition to those available to the Client or the Consultant, as the case may be, or that there is or could reasonably be expected to be a conflict of interest by reason of the Client or Consultant,
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as the case may be, and an Indemnified Party having common counsel in any action or proceeding, or if the Client or the Consultant, as the case may be, has not assumed the defense of any action or proceeding, or if the Client has not assumed the defense of any action or proceeding, then the other party may employ separate counsel to represent or defend it or any Indemnified Party in any such action or proceeding in which it or such Indemnified Party may become involved or is named as defendant and the Client or the Consultant, as the case may be, shall pay the fees and disbursements, as incurred by such separate counsel; provided that the Client shall not be obligated to pay the fees and disbursements of more than one such separate counsel for any one such action or proceeding in any one jurisdiction.
The reimbursement, indemnity and contribution obligations of the Client or the Consultant, as the case may be, under this paragraph shall be in addition to any liability which the Client or the Consultant, as the case may be, may otherwise have and shall be binding upon and inure to the benefit of any successors, assigns, heirs and personal representatives of the Client, the Consultant and any such person. The provisions of this Section 9 shall survive the termination and expiration of this Agreement.
10. Agreement not to Hire
Client acknowledges that Consultant has expended considerable time, effort and
expense in training the respective employees of Consultant in the methods of
operation, and that the employees of Consultant will acquire confidential knowledge
and information as to accounts, customers and business patrons, as well as confidential
knowledge and information concerning the methods, forms, contracts and negotiations
of Consultant. Client agrees not to employ any employee of Consultant for a
period of twelve months from the expiration or termination of this Contract,
without the written consent of Consultant.
| 11. Compensation | ||
| a. | Compensation payable to Consultant for all general
investor relations services and other services hereunder, including but
not limited to acquisition and merger services, shall be paid by Client
to Consultant by the means and in the manner or manners as described in
"Addendum A", a copy of which is attached hereto and incorporated herein
by this reference. |
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| b. | All moneys payable hereunder shall be in U.S. funds.
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| c. | For all special services, not within the scope of
this Consulting Agreement, Client shall pay to Consultant such fee(s)
as, and when, the parties shall determine in advance of performance of
said special services, provided Client has agreed to said special services.
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12. Amendment
Client will not, by Amendment to its Articles of Incorporation or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue
or sale of securities or any other voluntary action, avoid or seek to avoid
the observance of any term of this Agreement.
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13. Consultant as an Independent Contractor
Consultant shall provide said services as an independent contractor, and not
as an employee or of any Client affiliated with Client. Consultant has no authority
to bind Client or any affiliate of Client to any legal action, contract, agreement,
or purchase, and such action cannot be construed to be made in good faith or
with the acceptance of Client; thereby becoming the sole responsibility of Consultant.
Consultant is not entitled to any medical coverage, life insurance, savings
plans, health insurance, or any and all other benefits afforded Client employees.
Consultant shall be solely responsible for any Federal, State or local taxes,
and should Client for any reason by required to pay taxes at a later date, Consultant
shall reassure such payment is made by Consultant and not by Client. Consultant
shall be responsible for all workers compensation payments and herein holds
Client harmless for any and all such payments and responsibilities related hereto.
14. Consultant May Engage in Conflicting Activities
Client hereby acknowledges notification by Consultant and understands that Consultant
does, and shall, represent and service other and multiple clients in the same
manner as it does Client, and that Client is not an exclusive client of Consultant.
The Consultant will immediately notify in writing to the Client if the Consultant
is representing other clients that are in direct competition or offering similar
services as the Client that this agreement is by and between.
15. Amendments
This Agreement may be modified or amended, provided such modifications or amendments
are mutually agreed upon by and between the parties hereto and that said modifications
or amendments are made in writing and signed by both parties.
16. Severability
If any provision of this Agreement shall be held to be contrary to law, invalid
or unenforceable for any reason, the remaining provisions shall continue to
be valid and enforceable. If a court finds that any provision of this Agreement
is contrary to law, invalid or unenforceable, and that by limiting such provision
it would become valid and enforceable, then such provision shall be deemed to
be written, construed, and enforced as so limited.
17. Termination of Agreement
This Agreement may not be terminated by either party prior to the expiration
of the term provided in paragraph 3 above except as follows:
| a. | Upon the bankruptcy or liquidation of the other
party; whether voluntary or involuntary; |
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| b. | Upon the other party taking the benefit of any insolvency
law; |
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| c. | Upon the other party having or applying for a receiver
appointed for either party; |
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| d. | Upon the three month anniversary date of this Consulting
Agreement provided that the Client provides Consultant at least 10-business
days written notice |
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| that the Client does not want to extend contract
on a month-to-month basis; and/or |
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| e. | As provided for in paragraph 20 below. |
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| f. | As provided for in section 7 (i) |
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18. Arbitration
The parties agree to submit any controversy or claim arising out of, or relating
to any provision(s) of the Agreement, or breach thereof, to binding Commercial
Arbitration Rules of the American Arbitration Association of the state of incorporation
of the client. Judgment upon the award rendered by the arbitrator(s) shall be
final and binding on the parties and may be entered by either party in any court
or forum, state or federal, having jurisdiction. If legal action is taken to
enforce this Agreement, the prevailing party shall be entitled to recover reasonable
attorney fees, interest, if applicable, plus arbitration cost for the expense
of collection or defense of the action.
19. Non-waiver
The failure of either party, at any time, to require any such performance by
any other party shall not be construed as a waiver of such right to require
such performance, and shall in no way affect such party's right to require such
performance and shall in no way affect such party's right subsequently to require
full performance hereunder.
20. Early Termination
In the event Client fails or refuses to fulfill its duties as required in Section
6 and 7 hereof or fails or refuses to make timely payment of the compensation
set forth above, Consultant shall have the right to terminate any further performance
under this Agreement. In the event Consultant fails or refuses to fulfill its
duties as required in Section 7 (i) hereof, the Client shall have the right
to terminate any further performance under this Agreement. The Consultant understands
that any compensation due under this Agreement for months 2 and 3 will be forfeited
and the Consultant will have no rights or claims against the Client for these
amounts. In such event, the Client fails or refuses to fulfill its duties as
required in Section 6 and 7 hereof and upon notification thereof, all compensation
shall become immediately due and payable and/or deliverable, and Consultant
shall be entitled to receive and retain the same as liquidated damages and not
as a penalty, in lieu of all other remedies the parties hereby acknowledge and
agree that it would be too difficult currently to determine the exact extent
of Consultant's damages, but that the receipt and retention of such compensation
is a reasonable present estimate of such damage. Furthermore, Client acknowledges
that if Consultant must retain legal representation or a collection agency to
collect the compensation, Client will undertake the associated costs of collection.
21. Limitation of Consultant Liability
In the event Consultant fails to perform its work or services hereunder (which
does not include a breach of Section 5 above), its entire liability to Client
shall not exceed the amount of cash, stock and other compensation Consultant
has received from Client under Addendum A. Except in the case of a breach of
Section 5 above or any unauthorized alteration of information provided by Client
to Consultant, Consultant shall not be liable
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to Client for any indirect, special or consequential damages, nor for any claim against Client by any person or entity arising from or in any way related to this Consulting Agreement.
22. Ownership of Materials
All right, titles and interest in and to materials to be produced by Consultant
in connection with this Consulting Agreement and other services to be rendered
under said Consulting Agreement shall be the sole and exclusive property of
Client; provided, however, that Client shall use Consultant's
research reports produced by Consultant pursuant hereto only as fully produced
and presented to Client and it shall not reproduce such reports except for reproductions
that are done in full.
23. Miscellaneous
| a. | Effective date of representations shall be no later
than the date of execution by the parties of this Agreement. |
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| b. | Currency: In all instances, references to dollars
shall be United States Dollars. |
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| c. | This Agreement shall be governed by the laws of
the State of Florida, without giving effect to any conflicts of laws principles.
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24. Notices
All notices hereunder shall be in writing and addressed to the party at the
address herein set forth, or at such other address which notice pursuant to
this section may be given, and shall be given by either personal delivery, certified
mail, express mail or other national or three (3) business days after being
mailed or delivered to such courier service. Any notices to be given hereunder
shall be effective if executed by and sent by the attorneys for the parties
giving such notice, and in connection therewith the parties and their respective
counsel agree that in giving such notice such counsel may communicate directly
in writing with such parties to the extent necessary to give such notice. Any
notice required or permitted by this Consulting Agreement to be given shall
be given to the respective parties at the address first written above, on page
one (1) of this Consulting Agreement.
25. Parent and Subsidiary Companies or Entities
This Agreement applies to all parent, subsidiary or affiliate companies of Client.
26. Exclusion with Respect to Partnership
The parties agree that, in no way, shall this Agreement be construed as being
an act of partnership between the parties hereto and that no party hereto shall
have, as a result of the execution of this Agreement, any liability for the
commitments of any other party of any type, kind or sort.
27. Inurement
This Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective heirs, executors, administrators, personal representatives,
successors, and assigns.
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28. Entire Agreement
This Agreement and the Addendums attached hereto contain the entire agreement
of the parties and may be modified or amended only by agreement in writing,
signed by the party against whom enforcement of any waiver, change, amendment,
modification, extension or discharge is sought. It is declared by both parties
that there are no oral or other agreements or understanding between them affecting
this Agreement, or relating to the business of Consultant. This Agreement supersedes
all previous agreements between Consultant and Client.
29. Disclaimer
Consultant is not being retained to perform accounting or legal services on
behalf of Client. Consultant is not licensed as a stock or securities broker
and is not in the business of selling such stocks or securities or advising
as to the investment viability or worth of such stocks or securities. It is
the responsibility of Client to obtain advice of counsel and approve all materials
published by Consultant to ensure compliance with Federal and state securities
laws applicable to the activities of Client.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have executed this Agreement.
| Online Innovation, Inc. | Westport Strategic Partners, Inc. | |||
| By | /s/ Xxxx X. Xxx | By | /s/ Xxxxxxx Poricelli | |
| Xxxx Xxx | Xxxxxxx Poricelli | |||
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ADDENDUM A
Compensation
Three-thousand Dollars ($3,000) a month, payable in advance, on the 25th day
of each month commencing on November 25, 2003. The monthly compensation shall
be sent via overnight mail to:
Westport Strategic Partners, Inc.
ATTN: Xxxxx Xxxxxx
000 X. Xxxxxxx Xxxx., Xxxxx 0000
Xx. Xxxxxxxxxx, XX 00000
(000) 000-0000
or wired to:
Northern Trust Bank of Florida
0000 X. Xxx Xxxx Xxxx.
Xx. Xxxxxxxxxx, XX 00000
Routing No.: 000000000
Account No.: 1410019039
Account Name: Westport Strategic Partners, Inc.
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