Exhibit 10.12
CONSULTING AGREEMENT
AGREEMENT, made this 15th day of February, 2006 by and between Lexington
Resources, Inc., having its principal place of business at 0000 Xxxx Xxxx Xxxx
Xxxx, Xxx Xxxxx, Xxxxxx, 00000 (hereinafter the "Company") and EurXchange
Consulting Ltd., having its principal place of business at #000, 00X-0000
Xxxxxxxx Xxx, Xxxx Xxxxxxxxx, X.X., X0X 0X0, Xxxxxx (hereinafter the
"Consultant).
WHEREAS, the Company desires to retain the Consultant for consulting
services in connection with financial and investor public relations and related
matters in the Federal Republic of Germany and the Consultant desires to provide
such services as set forth herein.
NOW, THEREFORE, in consideration of the premises and mutual covenants and
agreements set forth herein and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties, intending to
be legally bound, agree as follows:
A. CONSULTATION
1. Consultant. The Company hereby retains the Consultant to render to the
Company the consulting services as described in Section B hereof, and the
Consultant hereby accepts such assignment upon the terms and conditions
hereinafter set forth.
2. Independent Relationship. The Consultant shall provide the consulting
services required to be rendered by it hereunder solely as an independent
contractor and nothing contained herein shall be construed as giving rise to an
employment or agency relationship, joint venture, partnership or other form of
business relationship.
3. No Authority to Obligate the Company. Without the consent of the board
of directors or appropriate officer of the Company, the Consultant shall have no
authority to take, nor shall it take, any action committing or obligating the
Company in any manner, and it shall not represent itself to others as having
such authority.
4. Term. The term of the Consultant's consultation to the Company hereunder
shall commence as of the date hereof and shall extend for a term of one (1)
year.
B. OBLIGATIONS OF THE CONSULTANT
1. Consulting Services. During the term of this Agreement, Consultant will
render advice and assistance to the Company on public and investor relations
related matters, and in connection therewith the Consultant shall perform and
render the consulting services enumerated in Schedule A hereto.
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ALL OF THE FOREGOING CONSULTANT PREPARED DOCUMENTATION CONCERNING THE COMPANY,
INCLUDING, BUT NOT LIMITED TO, DUE DILIGENCE REPORTS, CORPORATE PROFILE, FACT
SHEETS, AND QUARTERLY NEWSLETTERS, SHALL BE PREPARED BY THE CONSULTANT FROM
MATERIALS SUPPLIED TO IT BY THE COMPANY AND SHALL BE APPROVED BY THE COMPANY IN
WRITING PRIOR TO DISSEMINATION BY THE CONSULTANT.
2. Nonexclusive Engagement; Extent of Services.
a. The parties agree that the consultation contemplated by this
Agreement is a nonexclusive engagement and that the Consultant now renders
and may continue to render consulting services to other companies which may
or may not conduct activities similar to those of the Company.
b. The Consultant will devote such time and effort to the affairs of
the Company as the Consultant deems reasonable and adequate to render the
consulting services contemplated by this Agreement. The Consultant's work
will not include any services that constitute the rendering of any legal
opinions or performance of work that is in the ordinary purview of
certified public accountants.
3. Confidentiality. The Consultant will not, either during its engagement
by the Company pursuant to this Agreement or at any other time thereafter,
disclose, use or make known for its or another's benefit, any confidential
information, knowledge, or data of the Company or any of its affiliates in any
way acquired or used by the Consultant during its engagement by the Company.
Confidential information, knowledge or data of the Company and its affiliates
shall not include any information which is or becomes generally available to the
public other than as a result of a disclosure by the Consultant or its
representatives.
C. OBLIGATIONS OF THE COMPANY.
1. Compensation.
a. Cash Retainer. The Company will pay according to Schedule A the
amount of 293,000 EUR in total. The first installment of 153,000 EUR is due
on the date hereof. The second and third installment of each 70,000 EUR are
payable on the 15th day of April and May 2006.
b. Issuance of Stock. Subject to the provisions of Section b, below,
in consideration of the services to be rendered by the Consultant
hereunder, the Company shall issue to the Consultant or his designees an
aggregate of 400,000 fully paid and non-assessable shares (the "Shares") of
the common stock of the Company, par value $0.01 per share.
b. In connection with, and in consideration of, the issuance of the
Shares to the Consultant, the Consultant hereby agrees with and represents
and warrants to the Company as follows:
i. The Consultant is acquiring the Shares for the undersigned's
own account, for investment purposes only and not with a view toward
their resale or distribution.
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OBLIGATIONS OF THE COMPANY - continued
ii. The Consultant understands that the Shares are not freely
transferable and will not be freely transferable for an extended
period of time and that, as a consequence thereof, the undersigned may
have extremely limited opportunities to dispose of the Shares. The
Consultant understands that Rule 144 of the Securities Act of 1933, as
amended (the "Act") permits the transfer of "restricted securities" of
the type herein involved under certain conditions, but the Company may
not in the future meet the conditions to the application of Rule 144,
including, inter alia, the condition that current detailed information
concerning the Company be publicly available.
iii. The Consultant will not transfer any of the Shares either
(a) in the absence of an effective registration under the Act and
state securities laws ("Laws"), or (b) without obtaining an opinion of
an counsel reasonably acceptable to the Company, which opinion shall
be addressed, and satisfactory in form and substance, to the Company
and its counsel, stating that the transaction is exempt from the
registration requirements of the Act and Laws.
iv. Until freely transferable, the Company may refuse to
authorize any transfer by the Consultant of any of the Shares if the
proposed transferee does not make written representations and
agreements to the Company and the undersigned in form and substance
similar to those contained herein, or if any circumstances are present
which reasonably indicate that such transferee's representations are
not accurate.
v. A stop transfer order will be entered on the Company's records
respecting the Shares and a restrictive legend will be affixed to the
certificate evidencing the Shares substantially in the following form:
(A)
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS."
(B) In addition, the Company shall be entitled to imprint the
certificate evidencing the Shares with any State legend, if required.
vi. The Consultant agrees to save, hold harmless, defend and
indemnify the Company from any claims, liabilities, or nonperformance
by the undersigned of any representation, warranty or agreement
contained in this letter.
vii. The Consultant understands and acknowledges that the Company
is under no obligation to prepare a registration statement covering
the public resale of the Shares nor does the undersigned have a right
to include the Shares in any registration statement that the Company
may prepare in the future.
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OBLIGATIONS OF THE COMPANY - continued
2. Reimbursement of Expenses.
a. Out-of-Pocket Expenses. The Company shall reimburse the Consultant for
actual out-of-pocket expenses including, but not limited to, facsimile, postage,
printing, photocopying, and entertainment, incurred by the Consultant without
the prior consent of the Company and in connection with the performance by the
Consultant of its duties hereunder in amounts up to one-thousand dollars
(S1,000) per month. The prior consent of the Company shall be required for
reimbursement of expenses in excess of one-thousand dollars ($1,000) per month.
b. Travel and Related Expenses. The Company shall reimburse the Consultant
for the costs of all travel and related expenses incurred by the Consultant in
connection with the performance of its services hereunder, provided that all
such costs and expenses have been authorized, in advance, by the Company.
c. General. Expenses shall be due and payable when billed and after they
have been incurred.
D. MISCELLANEOUS.
1. Entire Agreement. This Agreement contains the entire agreement between
the parties with respect to the engagement of Consultant by the Company as a
consultant and supersedes and replaces any and all prior understandings,
agreements or correspondence between the parties relating to the subject matter
hereof.
2. Modification and Waiver. No supplement, modification or amendment of
this Agreement shall be binding unless executed in writing by both the parties
hereto. No waiver of any other provisions hereof (whether or not similar) shall
be binding unless executed in writing by both the parties hereto nor shall such
waiver constitute a continuing waiver.
3. Governing Law. This Agreement has been made in and shall be interpreted
according to the laws of the State of Nevada without any reference to the
conflicts of laws rules thereof. The parties hereto submit to the jurisdiction
of the courts of the State of Nevada for the purpose of any actions or
proceedings which may be required to enforce any of the provisions of this
agreement.
4. Successors and Assigns. This Agreement shall inure to the benefit of and
be binding upon the Company and its successors and assigns and upon the
Consultant and the Consultant's successors and assigns.
5. Severability. If any provision or provisions of this agreement shall be
held to be invalid, illegal or unenforceable for any reason whatsoever:
a. the validity, legality and enforceability of the remaining
provisions of this Agreement (including, without limitation, each portion
of any Section of this Agreement containing any such provision held to be
invalid, illegal or unenforceable) shall not in any way be affected or
impaired thereby; and
b. to the fullest extent possible, the provisions of this Agreement
(including, without limitation, each portion of any Section of this
agreement containing any such provision held to be invalid, illegal or
unenforceable) shall be construed so as to give effect to the intent
manifested by the provision held invalid, illegal or unenforceable.
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MISCELLANEOUS - continued
6. Further Assurances. From and after the execution and delivery of this
Agreement, upon request of either party, the other shall do, execute,
acknowledge and deliver all such further acts, assurances and other instruments
and papers as may be required to carry out the transactions contemplated by this
agreement.
7. Headings. The headings of the paragraphs of this agreement are inserted
for convenience only and shall not be deemed to constitute part of this
agreement or to affect the construction hereof.
8. Notices. Any notice to be given hereunder shall be given in writing. All
notices under this Agreement shall be either hand delivered receipt
acknowledged, or sent by registered or certified mail, return receipt requested
as follows:
(a) If to the Company, to:Lexington Resources Inc.
0000 Xxxx Xxxx Xxxx Xx. Xxx
Xxxxx, Xxxxxx, 00000
Attn.: Xx. Xxxxx Xxxxxx
Facsimile No.: (000) 000-0000
(b) If to the Consultant, to: EurXchange Consulting Ltd.
#000, 00X-0000 Xxxxxxxx Xxx
Xxxx Xxxxxxxxx, X.X, X0X
0X0
Facsimile No.: (000) 000-0000
Attn: Xx. Xxx Xxxxxx
All such notices shall be deemed given when delivered, if personally delivered
as aforesaid, or within five business days after mailing, as aforesaid.
9. Execution. This Agreement may be executed in two or more counterparts,
all of which when taken together shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and
delivered to the other party, it being understood that both parties need not
sign the same counterpart. In the event that any signature is delivered by
facsimile transmission, such signature shall create a valid and binding
obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
page were an original thereof.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first written above.
LEXINGTON RESOURCES, INC.:
By:
-----------------------------------------
Xxxxx Xxxxxx, President
EURXCHANGE CONSULTING, LTD.
By:
-----------------------------------------
Xxx Xxxxxx, Director
SCHEDULE "A"
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Investor Awareness Program for Lexington Resources
The Consultant is responsible for the program coordination within the six month
term. The Consultant will arrange in addition to the suggested program elements
Face-to-Face-Meetings with European specialists and strategic investors,
arranged to generate a substantial interest for the Client's stock in major
European equity markets. Maximizing results will be achieved by handpicking the
audience for each meeting, thus ensuring the best possible fit between the
investor attendees and the Client. (Focus on GERMANY and SWITZERLAND)
Corporate finance consulting in connection with a debt or equity financing in
order to raise funds for the Client including introduction to the Consultant's
investors' network and their investment advisors plus various potential private
investors capable of financing public companies.
Information on loans, credit lines, debts and other forms of financing or
funding against equity as an asset which could function as a bridge financing in
connection with the aforementioned fund raising services.
Introduction to various journalist of the leading press in Germany such as Focus
Money, Financial Times Germany, Euro am Xxxxxxx and reporters from CNBC,
Bloomberg TV and N-TV, wholly owned subsidiary of CNN.
It shall be expressly understood that the Consultant shall have no power to bind
Client to any contract or obligation or to transact any business in Client's
name or on behalf of Client in any manner.
Translations of Webpage, Business Plan and News Releases 15,000 EUR
All of Client's materials made available to the public will be translated into
German. Primarily there is the website (powered by EquityStory AG and available
on over 25 financial portals), the business plan and various brochures which
should be combined in a professional investors package (see below).The text
would be not just translated but also be transformed in an easy-to-understand
German to introduce Client to potential German investors. Corporate news will be
sent out in German using the state-of-the-art services of DGAP (now a subsidiary
of EquityStory AG)
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Phone & Location Service 20,000 EUR
In order to establish communication during central European business hours,
Client would have a German business address and active phone & fax lines. German
investors have therefore an opportunity to speak in German with someone
representing the Client, without any time difference. Therefore, Consultant
offers the following services for a six month term:
o answering of phone calls, faxes and mailings on Client's behalf
o e-mail response center;
o building a data-base of all persons and institutions inquiring
regarding the company;
o sending out information brochures/mailings/investor packages upon
request (costs w/o packing & postage);
o preparing & updating an investors package based on the existing
investors package (max. 2,000 pieces)
Chat line Coordination 5,000 EUR The Consultant offers the service of two
professional "chat line hackers" specialized in coordinating and streamlining
the chat lines. We suggest a one month term boosting the corporate story.
Telephone Hotline 50,000 EUR
We are affiliated with Germany's most successful "Stock Hotline". The Stock
Hotline will produce a five minute spot which will be posted in the 1-900
Call-In-Center which advertises regularly on German TV and German press. The
program lasts for four months upon signing with regular updates in case of
important Corporate news.
Web Portal Presence through Wallstreet Online 40,000 EUR
The Client will receive the marketing support of Germany's most powerful web
portal for stock related information, xxxxxxxxxx-xxxxxx.xx. They have some
500,000 registered users who can sign up for areas of special interest. With
five of their newsletters we will have a tremendous reach into the German
financial community. Wallstreet Online guarantees a 3 month coverage of client's
story in their various stock letters, banners, stock-tickers and recommendation
features. Furthermore the client will be posted as stock of the month, including
the cover story. The average coverage will be twice a week. We suggest Mondays
and Thursdays.
MIDAS Research Report 20,000 EUR
This service will include production and distribution of:
o 1 basic research report (minimum 12 pages) (German/English)
o 1 update (minimum 5 pages)
o up to 4 research flashes (1-2 pages) covering news releases and
filings during the following 6 months o 1 analyst interview featuring
the Client using the "Analyst Corner" format on Cortal Consors (the
leading German Online Broker)
o 1 CEO interview
o All research (except CEO interview) will be published on the website
of Cortal Consors and will be sent out via email to our own database
of 600 institutions and private asset managers in Germany and
Switzerland. This will be published in German and available as PDF or
HTML file.
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Xxxxx Stock Report 50,000 EUR
This service will include production and distribution of:
o 1 basic research report 4 pages)
o 3 update (2 pages)
o 6 HTML research flashes (1-2 pages) covering news releases and filings
during the following 6 months.
All research will be published on Xxxxx Stock Report's website and disseminated
via email to over 400,000 opt-in email addresses for each report, including
updates and research flashes.
Additional News Letter Presence 30,000 EUR
The Consultant offers a wide range of very efficient News Letters throughout the
whole German-speaking area (Germany, Austria and Switzerland). We recommend Der
Goldreport, Oberbayerischer Boersenbrief, Frankfurt Finance and Money Radar. All
of these news letters come with their own proprietary data base.
The 12 weeks package contains:
o one recommendation in one of the next issues of the above
stock-letters
o one retrospect two weeks after the first recommendation
Roadshow Budapest / Vienna 33,000 EUR
The Consultant offers access to high net worth individuals coverd by Xxxxxxxx
Xxxxxxx. Matthias is involved in various real estate projects in Croatia. His
clients are the financial backers of his projects. Matthias claims minimum
investments of $250,000 USD per person. The formula of his success is based on
the unique composition of the attendances. Matthias picks beforehand his lead
investor and the lead investor does the convincing. Usually we meet in small
rounds, consisting out of 4 to 5 prospective investors. The cost of the road
show does not include expenses.
Hard Copy Mailer by EURAMS 30,000 EUR
EURAMS (EURO AM XXXXXXX) is a weekly financial newspaper issued each Sunday.
EURAMS has 160,000 subscribers and is Germany's leading stock magazine for
venture capital. The Consultant suggests the creation of a company flyer, which
will be added to the magazine when the trading volume peaks during the program.
Summary of Expenditures:
Roadshow Budapast/Vienna 33,000 EUR
Translations / Web Site / News releases 15,000 EUR
Phone & Location Service 20,000 EUR
Chat-Line Coordination 5,000 EUR
Telephone Hotline 50,000 EUR
w:o Web Portal Presence 40,000 EUR
MIDAS Research Report 20,000 EUR
Xxxxx Stock Report 50,000 EUR
Additional News Letters 30,000 EUR
EURAMS (Newspaper sublement) 30,000 EUR
Total costs 293,000 EUR
=======================
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Conclusion
From our experience, for each EUR spent on IR (specifically with this type of
program) for such a great story as Lexington Resources., up to 50 EUR of buying
should be created.
Since most of the indicated costs are up-front costs for us, we have to ask to
be paid in several installments up-front as part of our contract following the
attached timeline. Once the money is in the bank for each program segment we can
commence immediately.
Timeline for installment payments
---------------------------------
Now 153,000 EUR
April 15, 2006 70,000 EUR
May 15, 2006 70,000 EUR
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