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EXHIBIT 3
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (this "Agreement") is entered into as of June
17, 1999 by and between Virtual Technology Corporation ("VTC"), a Minnesota
corporation and Xxxxxxx Xxxxxxx, of 0000 Xxxx Xxx., Xxxxxxxx, XX 00000
("Consultant").
RECITALS
A. VTC is a public company whose Common Stock, with a par value of
$.001 per share is quoted on the OTC Bulletin Board. VTC is in the business of
selling computers and computer-related equipment on the Internet.
B. Consultant has experience developing traffic for web sites and
portals.
C. VTC wishes to contract for creative advice and banner
impressions (advertising space) on the Internet.
AGREEMENT
NOW, THEREFORE, it is mutually agreed by and between the Parties as
follows:
1. ENGAGEMENT. VTC hereby contracts for a minimum of 1,000,000
banner impressions and a maximum of 10,000,000 impressions per month for a
period of 12 months.
2. CONSULTING SERVICES. The consulting services contemplated by
this Agreement (the "Consulting Services") shall consist of:
a. Reviewing and evaluating VTC's current banner ads and
remaining knowledgeable about the contents thereof;
b. Working with VTC's creative team to develop and prepare a
targeted banner advertising strategy; and
c. Working with VTC's creative team to periodically revise the
VTC banner ad strategy as required during the term of this Agreement.
3. DUTIES EXPRESSLY EXCLUDED. This Agreement expressly excludes the
Consultant from providing any and all capital formation and/or public relations
services to the Company inclusive of, but not limited to (i) direct or indirect
promotion of the Company's securities; (ii) assistance in making of a market in
the Company's securities; and (iii) assistance in obtaining debt and/or equity
financing.
4. CONSIDERATION. In consideration of the performance by Consultant
of the Consulting Services, VTC will issue to Xxxxx Xxxxxxx (the designated
employee of Consultant) 200,000 shares of VTC's Common Stock (the "Shares")
valued at $3.00 per share, based upon the market price on the date of this
Agreement. In the event that Consultant does not completely perform the
Consulting
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Services (for any reason including the death or incapacity of Consultant), then
for each month that Consultant does not perform the Consulting Services, one
sixth (1/6) of the Shares (as adjusted for stock splits, reverse stock splits,
stock dividends or distributions or other reclassifications of VTC's common
stock) shall be returned to VTC and canceled. Consultant agrees to purchase
shares in the open market, if necessary, to fulfill such obligation to return
shares to VTC.
The shares will be issued as soon as practicable following execution of
this Agreement and the filing of a registration statement under the Securities
Act of 1933, as amended, on Form S-8 covering the Shares.
5. EXPENSES. Consultant shall bear his out-of-pocket costs and
expenses incident to performing the Consulting Services, without a right of
reimbursement by VTC.
6. TERM. The term of this Agreement is 12 months, commencing
June 17, 1999 and ending June 17, 2000 (the "Term"). This Agreement may be
terminated prior to the end of the Term upon the mutual written agreement of the
Parties or in the event Consultant is in default (as defined below) in the
performance of the Consulting Services, which default is not cured within a
reasonable time following written notice thereof from VTC. A "default" occurs
when, in VTC's sole and exclusive judgment, Consultant is not satisfactorily
performing the Consulting Services.
7. CONSULTANT'S LIABILITY. In the absence of gross negligence or
willful misconduct on the part of the Consultant or the Consultant's breach of
any term of this Agreement, the Consultant shall not be liable to the Company or
to any officer, director, employee, shareholder or creditor of the Company, for
any act or omission in the course of or in connection with the rendering or
providing of services hereunder. Except in those cases where gross negligence or
willful misconduct of the Consultant or the breach by the Consultant of any
terms of this Agreement is alleged and proven, the Company agrees to defend,
indemnify, and hold the Consultant harmless from and against any and all
reasonable costs, expenses and liability (including reasonable attorney's fees
paid in the defense of the Consultant) which may in any way result from services
rendered by the Consultant pursuant to or in connection with this Agreement.
This indemnification expressly excludes any and all damages as a result of any
actions or statements, on behalf of the Company, made by the Consultant without
the prior approval or authorization of the Company.
8. COMPANY'S LIABILITY. The Consultant agrees to defend, indemnify,
and hold the Company harmless from and against any and all reasonable costs,
expenses and liability (including reasonable attorney's fees paid in defense of
the Company) which may in any way result pursuant to its gross negligence or
willful misconduct or in any connection with any actions taken or statements
made, on behalf of the Company, without the prior approval or authorization of
the Company or which are otherwise in violation of applicable law.
9. CONSULTANT'S REPRESENTATIONS. The Consultant makes the following
representations:
(a) Consultant has no prior or existing legally binding
obligations that are in conflict with its entering into this Agreement;
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(b) Consultant shall not offer or make payment of any
consideration to brokers, dealers, or others for purposes of inducing the
purchase, making of a market or recommendation for the purchase of the Company's
securities;
(c) Consultant is not currently the subject of an investigation
or inquiry by the Securities and Exchange Commission, the NASD, or any state
securities commission;
(d) Consultant's activities and operations fully comply with
now and will comply with in the future all applicable state and federal
securities laws and regulations;
(e) Consultant is either properly registered as, or exempt from
registration, as a broker-dealer or an investment advisor;
(f) Consultant understands that, as a result of its services,
it may come to possess material non-public information about the Company, and
that it has implemented internal control procedures designed to reasonably
insure that none of its employees, agents, consultants or affiliates, trade in
the securities of client companies while in possession of material non-public
information;
(g) During the Term of this Agreement and for a period of two
years thereafter, the Consultant shall treat as the Company's confidential trade
secrets all data, information, ideas, knowledge and papers pertaining to the
affairs of the Company. Without limiting the generality of the foregoing such
trade secrets shall include: the identity of the Company's customers, suppliers
and prospective customers and suppliers; the identity of the Company's creditors
and other sources of financing, the Company's estimating and costing procedure
and the cost and gross prices charged by the Company for its products; the
prices or other consideration charged to or required of the Company by any of
the suppliers or potential suppliers; the Company's sales and promotional
policies; and all information relating to entertainment programs or properties
being produced or otherwise developed by the Company. The Consultant shall not
reveal said trade secrets to others except in the proper exercise of its duties
for the Company, or use their knowledge thereof in any way that would be
detrimental to the interest of the Company unless compelled to disclose such
information by judicial or administrative process; provided, however, that the
divulging of information shall not be a breach of this Agreement to the extent
that such information was (i) previously known by the party to which it is
divulged, (ii) already in the public domain, all through no fault of the
Consultant, or (iii) required to be disclosed by Consultant pursuant to judicial
or governmental order. The Consultant shall also treat all information
pertaining to the affairs of the Company's suppliers and customers and
prospective customers and suppliers as confidential trade secrets of such
customers and suppliers and prospective customers and suppliers; and
(h) Consultant agrees to notify the Company immediately if, at
any time, any of the representations and warranties made by the Consultant
herein are no longer true and correct or if a breach of any of the
representations and warranties made by the Consultant herein occurs.
10. COMPANY REPRESENTATIONS. The Company makes the following
representations:
(a) The Company is in good standing in the state of
incorporation, Minnesota.
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(b) The Company and its senior management are not aware of any
materially adverse events not previously disclosed in the Company's annual and
quarterly reports with the Securities and Exchange Commission.
11. ENTIRETY OF AGREEMENT. This Agreement sets forth the entire
understanding of the Parties with respect to the matters contemplated hereby.
Any and all previous agreements and understandings between or among the Parties
regarding the subject matter hereof, whether written or oral, are superseded by
this Agreement. This Agreement shall not be amended or modified except by
written instrument duly executed by each of the Parties.
12. ASSIGNMENT AND BINDING EFFECT. This Agreement may not be assigned
without the prior written consent of the other Party.
13. WAIVER. Any term or provision of this Agreement may be waived at
any time by the Party entitled to the benefit thereof by a written instrument
duly executed by such Party.
14. NOTICES. Any notice, request, demand, waiver, consent, approval
or other communication which is required or permitted hereunder shall be in
writing and shall be deemed given only if delivered personally or sent by
facsimile, or by registered or certified mail, postage prepaid, as follows:
If to VTC to:
Virtual Technology Corporation
0000 Xxxx Xxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
If to Consultant, to:
Attn: Xx. Xxxxxxx Xxxxxxx
0000 Xxxx Xxx
Xxxxxxxx, XX 00000
or to such other address as the addressee may have specified in a notice duly
given to the sender as provided herein. Such notice, request, demand, waiver,
consent, approval or other communications will be deemed to have been given as
of the date so delivered, telephoned or mailed.
15. GOVERNING LAW. This Agreement shall be governed by and
interpreted and enforced in accordance with the laws of the State of Minnesota.
16. NO BENEFIT TO OTHERS. The representations, warranties, covenants
and agreements contained in this Agreement are for the sole benefit of the
Parties hereto.
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17. SEVERABILITY. Any provision of this Agreement that is invalid or
unenforceable in any jurisdiction shall be ineffective to the extent of such
invalidity or unenforceability in such jurisdiction without invalidating or
rendering unenforceable the remaining provisions hereof, and any such invalidity
or unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
18. HEADINGS. The headings of this Agreement are inserted solely for
the convenience of reference and are not part of, and are not intended to
govern, limit or aid in the construction of any term or provision hereof.
19. FURTHER ACTS. Each party agrees to perform any further acts and
execute and deliver any further documents that may be reasonably necessary to
carry out the provisions and intent of this Agreement.
20. ACKNOWLEDGMENT CONCERNING COUNSEL. Each party acknowledges that
it had the opportunity to employ separate and independent counsel of its own
choosing in connection with this Agreement.
21. INDEPENDENT CONTRACTOR STATUS. There is no relationship,
partnership, agency, employment, franchise OR joint venture between the parties.
The parties have no authority to bind the other or incur any obligations on
their behalf.
22. COUNTERPARTS. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
on the date first above written.
VIRTUAL TECHNOLOGY CORPORATION
A Minnesota corporation
By: /s/ Xxxxxxx Israel
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Name: Xxxxxxx Israel, Chairman
Xxxxxxx Xxxxxxx, Consultant
By: /s/ Xxxxxxx Xxxxxxx
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Name: Xxxxxxx Xxxxxxx
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