1
EXHIBIT 10.7
[Each page initialled PR and SL]
THIS AGREEMENT is made effective as of the 15th day of May, 2000
BETWEEN:
NETSTAFF, INC.
(hereinafter referred to as the "Company")
OF THE FIRST PART
AND:
INTELLECTUAL CAPITAL INC.
(hereinafter referred to as the "Contractor")
OF THE SECOND PART
WHEREAS:
A. The Company desires to retain the Contractor to assist the Company in the
areas of strategic development, acquisitions and corporate finance and the
Contractor has agreed to so assist the Company on the terms and conditions of
this Agreement.
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the
mutual covenants and promises set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged by
each, the parties hereto agree as follows:
ARTICLE 1
APPOINTMENT AND AUTHORITY OF CONTRACTOR
1.1 Appointment of Contractor
The Company hereby appoints the Contractor to perform certain services
for the benefit of the Company as hereinafter set forth, and the Company hereby
authorizes the Contractor to exercise such powers as provided under this
Agreement. The Contractor accepts such appointment on the terms and conditions
herein set forth.
2
1.2 Delivery of Services
The Contractor shall cause the performance of its services hereunder to
be supervised by Xxxxxxx Xxx and in this regard the Contractor shall cause
Xxxxxxx Xxx to devote such time as shall be necessary to adequately supervise
and ensure the performance by the Contractor of its obligations hereunder.
1.3 Authority of Contractor
The Contractor shall have no right or authority, express or implied, to
commit or otherwise obligate the Company in any manner whatsoever.
1.4 Independent Contractor
In performing its services hereunder, the Contractor shall be an
independent contractor and not an employee or agent of the Company. Nothing in
this Agreement shall be deemed to require the Contractor to provide its services
exclusively to the Company and the Contractor hereby acknowledges that the
Company is not required and shall not be required to make any remittances and
payments required of employers by statute on the Contractor's behalf and the
Contractor or any of its agents or employees shall not be entitled to the fringe
benefits provided by the Company to its employees.
ARTICLE 2
CONTRACTOR'S AGREEMENTS
2.1 General
The services to be provided by the contractor to the Company shall
include the following:
(a) assisting the Company in its strategic planning and development;
(b) advising with respect to the launch of marketing and sales campaign
for the Company's MLS in the staffing industry;
(c) providing the Company with advice in connection with the raising of
capital and the Company's affairs generally;
(d) identifying potential acquisition targets for the Company and
assisting the Company in negotiating and consummating acquisitions;
and
(e) providing such other services as the Company may reasonably
request;
and in so assisting the Company, the Contractor shall at all times be subject to
the direction of the Company and shall keep the Company informed as to all
matters concerning the Contractor's activities.
-2-
3
2.2 Expense Statements
The Contractor shall on or before the 15th day of each calendar month
during the term hereof, or if a Saturday, Sunday or holiday the next following
business day, render to the Company an itemized statement and accounting for the
previous calendar month, together with such supporting documents as and when the
Company may reasonably require, of all expenses which the Company is obligated
by this Agreement to reimburse, such monthly expenses in any event not to exceed
US$1,000.
The Contractor may incur expenses in the name of the Company in an
amount per month in excess of the limit of expenses set forth herein only upon
advance agreement in writing by the Company; such expenses to relate solely to
the carrying out of the Contractor's duties hereunder. The Contractor will
immediately forward all invoices for expenses incurred on behalf of and in the
name of the Company and the Company agrees to pay said invoices directly on a
timely basis.
ARTICLE 3
COMPANY'S AGREEMENTS
3.1 Compensation of Contractor
As compensation for the services rendered by the Contractor pursuant to
this Agreement, the Company shall pay to the Contractor monthly in advance, on
or before the fifteenth day of each month or if a Saturday, Sunday or holiday
the next following business day a fee of US$7,000 per month during the term
hereof, commencing January 15, 2000.
As further compensation for the services rendered by the Contractor
herein the Company, subject to approval to its Board of Directors, shall grant
to Contractor, options (the "Options") to acquire common shares in the capital
stock of the Company, said options having the terms and conditions as set out in
Schedule "A" hereto pursuant to the terms of an option plan being formulated at
the Company for its employees and contractors. The Company shall use its best
efforts to ensure that such options are included in any registration statement
filed to register the Plan.
-3-
4
3.2 Indemnity by Company
The Company hereby agrees to indemnify, defend and hold harmless the
Contractor and Xxxxxxx Xxx, from and against any and all claims, demands,
losses, actions, lawsuits and other proceedings, judgments and awards, and costs
and expenses (including reasonable legal fees), arising directly or indirectly,
in whole or in part, out of any matter related to any action taken by the
Contractor within the scope of its duties or authority hereunder, excluding only
such of the foregoing as arise from the fraudulent, negligent, reckless or
wilful act or omission of the Contractor, its officers, directors, agents or
employees or as arise in respect of the Contractor's office overhead or the
Contractor's general administrative expenses, and the provisions of this Section
3.2 shall survive termination of this Agreement.
ARTICLE 4
DURATION, TERMINATION AND DEFAULT
4.1 Effective Date
This Agreement shall become effective as of the 15th day of January,
2000, and shall continue on subject to termination as provided for herein.
4.2 Termination
This Agreement may be terminated by either party by giving the other 30
days written notice of such termination provided that in circumstances where the
Contractor would otherwise have been entitled to receive a payment pursuant to
Section 3.1 herein within 30 days following termination of this Agreement the
Company shall make such payment to the Contractor as if the Agreement had not
been terminated.
4.3 Duties Upon Termination
Upon termination of this Agreement for any reason, the Contractor shall
promptly deliver the following to the CEO of the Company:
(a) a final accounting, reflecting the balance of expenses incurred on
behalf of the Company as of the date of termination; and
(b) all documents, copies of documents, notes based thereon, and any
other materials, in whatever media, including, but not limited to,
paper, electronic, disk-based, pertaining to the Company or this
Agreement, including but not limited to, all books of account,
correspondence and contracts, and Contractor shall not retain any
copies thereof.
(c) within ten (10) business days of any termination of this Agreement,
a certificate of compliance with the foregoing.
4.4 Compensation of Contractor on Termination
Upon termination of this Agreement, the Contractor shall be entitled to
receive as its full and sole compensation in discharge of obligations of the
Company to the Contractor under this Agreement all sums due and payable under
this Agreement to the date of termination
-4-
5
and the Contractor shall have no right to receive any further payments;
provided, however, that the Company shall have the right to offset against any
payment owing to the Contractor under this Agreement any damages, liabilities,
costs or expenses suffered by the Company by reason of the fraud, negligence or
wilful act of the Contractor, to the extent such right has not been waived by
the Company.
ARTICLE 5
CONFIDENTIALITY
5.1 Confidentiality
The Contractor shall not, except as authorized or required by its
duties, reveal or divulge to any person or companies any of the trade secrets,
secret or confidential operations, processes or dealings or any information
concerning the organization, business, finances, transactions or other affairs
of the Company, which may come to its knowledge during the term of this
Agreement and shall keep in complete secrecy all confidential information
entrusted to it and shall not use or attempt to use any such information in any
manner which may injure or cause loss, either directly or indirectly, to the
Company's business or may be likely so to do. This restriction shall continue to
apply after the termination of this Agreement without limit in point of time but
shall cease to apply to information or knowledge which may come into the public
domain.
The Contractor shall comply, and shall cause its agents and employees to
comply, with such directions as the Company shall make to ensure the
safeguarding or confidentiality of all such information.
5.2 Devotion to Contract
During the term of this Agreement, the Contractor shall devote
sufficient time, attention, and ability to the business of the Company, and to
any associated company, as is reasonably necessary for the proper performance of
its services pursuant to this Agreement. Nothing contained herein shall be
deemed to require the Contractor to devote its exclusive time, attention and
ability to the business of the Company. During the term of this Agreement, the
Contractor shall, and shall cause each of its agents or employees assigned to
performance of the services on behalf of the Contractor to,:
(a) at all times perform its services faithfully, diligently, to the
best of its abilities and in the best interests of the Company;
(b) devote such of its time, labour and attention to the business of
the Company as is necessary for the proper performance of the
Contractor's services hereunder; and
(c) refrain from acting in any manner contrary to the best interests of
the Company or contrary to the duties of the Contractor as
contemplated herein.
-5-
6
5.3 Other Activities
The Contractor shall not be precluded from acting in a function similar
to that contemplated under this Agreement for any other person, firm or company.
ARTICLE 6
MISCELLANEOUS
6.1 Waiver; Consents
No consent, approval or waiver, express or implied, by either party
hereto, to or of any breach of default by the other party in the performance by
the other party of its obligations hereunder shall be deemed or construed to be
a consent or waiver to or of any other breach or default in the performance by
such other party of the same or any other obligations of such other party or to
declare the other party in default, irrespective of how long such failure
continues, shall not constitute a general waiver by such party of its rights
under this Agreement, and the granting of any consent or approval in any one
instance by or on behalf of the Company shall not be construed to waiver or
limit the need for such consent in any other or subsequent instance.
6.2 Governing Law
This Agreement and all matters arising thereunder shall be governed by
the laws of the State of California.
6.3 Successors, etc.
This Agreement shall enure to the benefit of and be binding upon each of
the parties hereto and their respective heirs, successors and permitted assigns.
6.4 Assignment
This Agreement may not be assigned by any party except with the written
consent of the other party hereto.
6.5 Entire Agreement and Modification
This Agreement constitutes the entire agreement between the parties
hereto and supersedes all prior agreements and undertakings, whether oral or
written, relative to the subject matter hereof. To be effective any modification
of this Agreement must be in writing and signed by the party to be charged
thereby.
6.6 Headings
The headings of the Sections and Articles of this Agreement are inserted
for convenience of reference only and shall not in any manner affect the
construction or meaning of anything herein contained or govern the rights or
liabilities of the parties hereto.
-6-
7
6.7 Notices
All notices, requests and communications required or permitted hereunder
shall be in writing and shall be sufficiently given and deemed to have been
received upon personal delivery or, if mailed, upon the first to occur of actual
receipt or forty-eight (48) hours after being placed in the mail, postage
prepaid, registered or certified mail, return receipt requested, respectively
addressed to the Company or the Contractor as follows:
The Company:
Netstaff, Inc.
000 Xxxxx Xxxx
Xxx Xxxxxxxxx, XX
XXX
00000
Attention: Xxxxxxx Xxxxx
The Contractor:
Intellectual Capital Inc.
Suite 1555 - 0000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, X.X.
X0X 0X0
Xxxxxx
Attention: Xxxxxxx Xxx
or such other address as may be specified in writing to the other party, but
notice of a change of address shall be effective only upon the actual receipt.
6.8 Further Assurances
The parties hereto agree from time to time after the execution hereof to
make, do, execute or cause or permit to be made, done or executed all such
further and other lawful acts, deeds, things, devices and assurances in law
whatsoever as may be required to carry out the true intention and to give full
force and effect to this Agreement.
6.9 Counterparts
This Agreement may be executed in several counter-parts, each of which
will be deemed to be an original and all of which will together constitute one
and the same instrument.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the day and year first above written.
-7-
8
NETSTAFF, INC.
Per: /s/ XXXXXXX XXXXX
---------------------------
Authorized Signatory
INTELLECTUAL CAPITAL INC.
Per: /s/ XXXXXXX XXX
---------------------------
Authorized Signatory
-8-
9
SCHEDULE "A"
The Options to be granted pursuant to Section 3.1 of this Consulting Agreement
to Contractor or nominee shall be subject to the approval of the Company's Board
of Directors and have the following terms and conditions:
(a) The exercise price of the Options shall be $2.00 per share;
(b) The Options shall have a term of Ten (10) years;
(c) The Options shall be granted as follows:
(i) 300,000 options as of the date the Company completes one or
more business acquisitions, strategic alliances or mergers
having a combined acquisition cost or value in the range of
$3 - $5 million;
(ii) a further 200,000 options as of the date the Company
completes one or more business acquisitions, strategic
alliances or mergers having a combined acquisition cost or
value in the range of $6 - $10 million;
(iii) a further 200,000 options as of the date the Company
completes one or more business acquisitions, strategic
alliances or mergers having a combined acquisition cost or
value in the range of $11 - $15 million;
(iv) a further 200,000 options as of the date the Company
completes one or more business acquisitions, strategic
alliances or mergers having a combined acquisition cost or
value in the range of $16 - $20 million or in excess
thereof.
The options immediately vest in full upon such grant. The options are granted
pursuant to the schedule above upon occurrence of the triggering events set
forth and may aggregate and be effective upon completion of more than one of
such triggering events.
If during the term of this Agreement, a business acquisition, strategic alliance
or merger is closed without the direct assistance of Contractor, then such
transaction shall not be counted as a "triggering event" such as set forth
above.
Upon termination of the Agreement, any ungranted Options shall terminate.
/s/ XXXXXXX XXXXX 02/24/00
-----------------------------------
/s/ XXXXXXX XXX 02/24/00
-----------------------------------
-9-
