CONSULTING AGREEMENT
THIS
CONSULTING AGREEMENT (the “Agreement”) is made and entered into as of October 1,
2004 (the “Effective Date”), by and between Endavo Media and Communications,
Inc. (formerly Endavo, Inc.), a Delaware corporation (the “Company”), and
AlphaWest Capital Partners, LLC, a Delaware limited liability company
(“Consultant”).
RECITALS
A. The
Company desires to avail itself of the experience, advice, and assistance of
Consultant.
B. Consultant
is willing, through the services of Xxxx X. Xxxx (“Xxxx”), to make available to
the Company Consultant’s experience, advice, and assistance.
NOW,
THEREFORE, in consideration of the premises and the covenants contained herein,
the Company and Consultant agree as follows:
1. Services.
(a) During
the Term (as defined below), Consultant agrees to cause Xxxx to serve as interim
Chief Executive Officer and President of the Company and to undertake such
duties and responsibilities that are customary for the principal executive
officer of other similar companies in the Company's line of business, subject at
all times to the direction and control of the Board of Directors. In addition,
until such time as the Company retains the services of a Chief Financial
Officer, Consultant shall cause Xxxx to also provide certain of the duties and
responsibilities typically undertaken by the principal financial officer of a
similar company, including the direct management of the Company’s financial
matters and accounting personnel.
(b) Consultant
shall cause Xxxx to provide the services to be performed by him hereunder (the
“Services”) from time to time at mutually agreeable times and places. Consultant
and Xxxx shall be free to provide services to other companies during the term of
this engagement, provided that such services do not conflict with or impair
Consultant’s ability to provide the Services to the Company
(c) The
Company shall cause Xxxx to remain elected to the Company’s Board of Directors
(the "Board") and shall serve on the Board until his successor is duly elected
and qualified or until his earlier resignation.
2. Term
of Agreement; Termination.
(a) The
Company agrees to retain Consultant on the terms and conditions of this
Agreement for a period commencing as of October 1, 2004 and continuing until
December 31, 2004 or such shorter period as may be provided for herein (the
“Initial Term”). The Initial Term of this Agreement may be renewed for such
additional period or periods as the parties may mutually agree (each, a “Renewal
Terms”). The Initial Term, the First Renewal Term and, if this Agreement is
renewed, Renewal Terms are referred to as the “Term.”
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(b) Consultant
may terminate this Agreement at any time, for any reason or no reason, upon 10
days’ prior written notice to the Company. Upon the expiration or termination of
this Agreement for any reason: (i) each party will be released from all
obligations to the other arising after the date of expiration or termination,
except that the obligations under Sections 3 (with respect to any payments due
to Consultant up to and including the termination date), 4, 5 and 10 will
continue after such expiration or termination, and neither party will be
relieved from any liability for breach of this Agreement; and (ii) the election
by Consultant to terminate this Agreement in accordance with its terms will not
be deemed an election of remedies, and all other remedies provided by this
Agreement or available at law or in equity will survive any
termination.
3. Compensation;
Reimbursement of Expenses.
(a) As full
compensation for Consultant for the Services to be rendered to the Company
hereunder, the Company shall pay Consultant a monthly consulting fee (the
“Consulting Fee”) in an amount of cash equaling $15,000. The monthly Consulting
Fee shall be payable on the Company’s regular payroll dates, commencing as of
July 1, 2004, and shall be non-refundable and non-recoupable in the event of
termination of this Agreement prior to the end of any month.
(b) In
addition to any amounts payable hereunder to Consultant, in the event the
Company completes a “Corporate Transaction” with a third party, the Company will
pay to Consultant in cash at the closing of such Corporate Transaction, an
amount equal to 3% of the cash value of the Corporate Transaction (as determined
by the Company and Consultant in good faith). Deducted from this amount shall be
amounts paid by the Company in consulting fees under this contract in section
3(a) above. The company also agrees to issue to the Consultant such number of
Non-Qualified Sock Options as equals 5% of the amount of shares of the Company’s
common stock issued Company in such Corporate Transaction (or in the event the
Company issues debt or equity securities convertible into common stock, 5% of
the number of shares of the Company’s common stock that may be issued upon
conversion of such securities). Such options shall have a term of ten years and
shall be exercisable at a price of fair market value of the Company’s common
stock on the date of closing of the Corporate Transaction. For purpose of this
Agreement, “Corporate Transaction” means a debt or equity financing by the
Company in the amount of or exceeding $250,000 (any equity or credit line,
“tranched”, or similar multi-closing financings by the same investor or group of
investors shall be considered to be one transaction for the purpose of this
definition), any merger or consolidation of the Company with or into other
company, sale of all of substantially all of the Company’s assets of the
acquisition of the equity capital stock or assets of any other company, other
than in the ordinary course of business.
(c) Stock
Options.
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(i) Upon
execution of this Agreement, the Company shall xxxxx Xxxx a non-qualified
incentive stock option (the "Stock
Option"),
pursuant to the Company’s Employee Stock Option Plan equaling five percent (5%)
of the fully-diluted outstanding shares of common stock of the Company,
including preferred shares, options, warrants, or other similar securities
outstanding, at an exercise price equal to the closing sales price of the
Company’s common stock on the last trading day prior to the Effective Date of
this Agreement. The Stock Options shall vest at the end of the Initial Term of
this agreement and shall be exercisable until June 30, 2014 (the “Expiration
Date”).
(ii) Contract
Renewal Options. Pursuant to the an Initial or Subsequent Renewal Agreement, the
amount of options originally issued shall be adjusted, if necessary, to reflect
a total amount issued that equals five percent (5%) of the fully-diluted
outstanding shares of common stock of the Company, including preferred shares,
options, warrants, or other similar securities outstanding, on the First Renewal
Date. If new options are issued to complete the adjustment, then they shall be
issued with an exercise price equal to the closing sales price of the Company’s
common stock on the last trading day prior to the Renewal Date of this Agreement
and shall vest upon the expiration of the Initial or Subsequent Renewal Term.
(iii) Any part
of the Stock Option that shall have become vested on or prior to the termination
or expiration of this Agreement shall remain exercisable until the Expiration
Date. Upon termination of this Agreement by Consultant prior to the expiration
of the Term, any unvested Stock Options shall expire and cease to be
exercisable.
(iv) The
Company agrees to cause any and all shares of the Company’s common stock
issuable upon exercise of the Stock Option to be registered on registration
statement on Form S-8 as promptly as practicable after the date hereof (and in
any event within 120 days from the date the options become vested).
(d) The
Company shall promptly reimburse Consultant for all out-of-pocket expenses
incurred by it or Xxxx in the performance of its or his obligations hereunder,
including without limitation, all expenses incurred by Xxxx during the period he
is performing services at the Company’s offices in Salt Lake City, Utah, upon
submission of appropriate receipts; provided, however that any single cost or
expense in excess of $1,000 shall be subject to the prior approval of the
Company. In addition, the Company shall reimburse Consultant for its legal costs
in preparing and negotiating this Agreement.
4. Pre-existing
Works. Company
understands and agrees that Consultant utilizes certain pre-existing source and
object codes, flow charts, algorithms, compilers, assemblers, coding sheets,
design concepts, routines and sub-routines, as well as service utilities which
are basic building blocks of Consultant's products. Company further understands
and agrees that these materials and information, as well as derivative works
which contain such materials and information, while used to develop the software
described in the SOW, shall not be considered “works made for hire” as such term
is defined in 17 U.S.C. §101, are excluded from the work defined in this
agreement, and shall remain the property of Consultant. Consultant agrees to
make the Company aware of such pre-existing works by providing written
documentation to support ownership.
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5. Endavo
Property. For any
equipment, software or documentation Company provides to Consultant for work
done under this agreement (“Property”), Consultant shall exercise at least a
reasonable degree of care to protect the Property, and Consultant shall have
risk of loss or damage to the Property. Title to the Property shall remain with
Company or its owner(s). Upon completion or termination of this agreement, the
Property shall be returned to Company in the same condition as when provided by
the Company, except with reasonable wear and tear.
6. Indemnification;
Limitation of Liability.
(a) Consultant
shall not have any liability to the Company or any other person in connection
with the services rendered pursuant to this Agreement, except for the liability
for losses, claims, damages or liabilities finally judicially determined to have
resulted from Consultant’s willful misconduct or gross negligence. In no event
shall Consultant be liable to the Company for any loss of its profits or for any
incidental, special, exemplary, or consequential damages.
(b) The
Company shall indemnify Consultant and its affiliates and their respective
directors, officers, employees, agents and controlling persons (each, a
“Consultant Indemnified Party”) from and against any and all losses, claims,
damages, liabilities, costs and expenses (collectively, “Damages”) as the same
are incurred (including, without limitation, any actual, legal or other expenses
reasonably incurred in connection with investigation, preparing to defend or
defending against any action, claim, suit or proceeding commenced or threatened,
or in appearing or preparing for pretrial proceedings) which arise out of or in
connection with this Agreement or the performance of the Services pursuant to
this Agreement; provided that the Company shall not be liable for any Damages to
the extent they arise from the willful misconduct or gross negligence of the
Consultant Indemnified Party, and provided further that such Consultant
Indemnified Party agrees to refund such reimbursed expenses if and to the extent
it in finally judicially determined that such Consultant Indemnified Party is
not entitled to indemnification.
(c) The
Company agrees to maintain in effect its current Directors’ and Officers’
liability insurance with coverage of at least $5,000,000 per incident, to cause
Xxxx to be a covered party thereunder and to give Xxxx at least 30 days prior to
the expiration or termination thereof.
7. Confidential
Information.
Consultant agrees not to reveal or disclose to the public or any third person
any Non-Public Information (as defined below) without the Company’s consent,
unless required by any court or governmental or regulatory authority, board or
agency. Consultant agrees to use the same degree of care in protecting the
Non-Public Information of the Company as it uses in protecting its own
confidential information and agrees not to make use of such Non-Public
Information other than in connection with its performance of this Agreement.
“Non-Public Information” shall mean any information pertaining to the business,
properties or financial status of the Company provided by the Company to
Consultant, provided that Non-Public Information shall not include any
information which (i) is or becomes generally available to the public other
than as a result of a disclosure by Consultant, (ii) was available to
Consultant prior to its disclosure to Consultant by the Company, provided that
such information is not known by Consultant to be subject to another
confidentiality agreement with another party, or (iii) becomes available to
Consultant on a non-confidential basis from a source other than the Company,
provided that, to the knowledge of Consultant, such source is not bound by a
confidential agreement with the Company. Upon termination of this Agreement and
at the written request of the Company, any original documentation provided by
the Company to Consultant will be returned by Consultant. Consultant will
require similar confidentiality agreements from its employees or agents where it
reasonably believes they will come in contact with Non-Public Information of the
Company.
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8. Independent
Contractor.
At all
times during the Term, Consultant is and shall be an independent contractor in
providing the Services hereunder, with the sole right to supervise, manage,
operate, control, and direct the performance incident to the Services. Nothing
contained in this Agreement shall be deemed or construed to create a partnership
or joint venture, to create the relationships of employee/employer or
principal/agent, or otherwise create any liability whatsoever as partner, joint
venturer, employer, employee, principal, or agent for either the Company or
Consultant with respect to the indebtedness, liabilities, or obligations of each
other or of any other person or entity.
9. Notices.
All
notices, requests, demands and other communications hereunder shall be in
writing and shall be personally delivered, delivered by facsimile or courier
service, or mailed, certified with first class postage prepaid, to the addresses
set forth below:
|
If
to the Company, to: |
Endavo
Media & Communications, Inc. 00 Xxxx Xxxxxxxx #0000 Xxxx Xxxx Xxxx, XX 00000 Attention: Chairman of the Board Facsimile Number: (000) 000-0000 Phone Number: (000) 000-0000 | |
|
If
to Consultant, to: |
AlphaWest
Capital Partners, LLC
00 Xxxxxxxx Xxxxxxx, Xxxxx 000 Xxxxxxx, XX 00000 Attn:
Xxxx X. Xxxx
Facsimile Number: (000) 000-0000 Phone
Number: (000) 000-0000 | |
Each such
notice shall be deemed to have been given (whether actually received or not) on
the date of actual delivery thereof, if personally delivered or delivered by
facsimile transmission (if receipt is confirmed at the time of such transmission
by telephone or facsimile machine-generated confirmation), or on the third day
following the date of mailing, if mailed in accordance with this Section, or on
the day specified for delivery to the courier service (if such day is one on
which the courier service will give normal assurances that such specified
delivery will be made). Any notice, request, demand, or other communication
given otherwise than in accordance with this Section shall be deemed to have
been given on the date actually received. Any party may change its address for
purposes of this Section by giving written notice of such change to all other
parties in the manner hereinabove provided.
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10. Binding
Effect. This
Agreement shall be binding upon Consultant and the Company and their respective
successors and permitted and assigns.
11. Assignment. Neither
this Agreement nor the rights and obligations hereunder may be assigned by
operation of law or otherwise without the express consent of the other party
(which consent may be granted or withheld in the sole and absolute discretion of
such other party).
12. Governing
Law; Jurisdiction. This
agreement shall be governed by and construed in accordance with the laws of the
state of Delaware without giving effect to any conflicts of law provisions. Any
controversy or claim arising out of, or relating to, this Agreement, to the
making, performance, or interpretation of it, shall be settled by arbitration in
the New York City, New York, unless otherwise mutually agreed upon by the
parties, under the commercial arbitration rules of the American Arbitration
Association then existing, and any judgment on the arbitration award may be
entered in any court having jurisdiction over the subject matter of the
controversy. If any legal action or any arbitration or other proceeding is
brought for the enforcement of this Agreement, or because of an alleged dispute,
breach, default, or misrepresentation in connection with any of the provisions
of this Agreement, the successful or prevailing party or parties shall be
entitled to recover reasonable attorney's fees and other costs incurred in that
action or proceeding, in addition to any other relief to which it or they may be
entitled.
13. Severability. If any
term or other provision of this Agreement is invalid, illegal or incapable of
being enforced under any law or public policy, all other terms and provisions of
this Agreement will nevertheless remain in full force and effect. Upon such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto will negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner.
14. Counterparts. This
Agreement may be executed in a number of identical counterparts, each of which,
for all purposes, is to be deemed an original, and all of which constitute,
collectively, one agreement; but in making proof of this Agreement, it shall not
be necessary to produce or account for more than one such
counterpart.
15. Amendment. This
Agreement may not be changed, modified or discharged, in whole or in part, nor
may any of its provisions be waived, except by a written instrument that
expressly refers to this Agreement and that is executed by the party against
whom enforcement of the change, modification, discharge or waiver is sought. Any
waiver by any party of a breach of any provision of this Agreement shall not
operate as, or be construed to be a waiver of, any other breach of such
provision or of any breach of any other provision of this Agreement. The failure
of either party to assert any of its rights under this Agreement shall not
constitute a waiver of any of such rights.
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16. Entire
Agreement. This
Agreement (including any Exhibits hereto and the documents delivered pursuant
hereto) constitutes the entire agreement of the parties hereto with respect to
the subject matter hereof and supersedes all prior agreements and undertakings,
both written and oral, among the parties hereto with respect to the subject
matter.
17. Headings. The
various titles of the paragraphs, captions, headings, and arrangements herein
are used solely for convenience, shall not be used for interpreting or
construing any word, clause, paragraph, or subparagraph of this Agreement, and
do not in any way affect, limit, amplify, or modify the terms
hereof.
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IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first above written.
| ENDAVO MEDIA AND COMMUNICATIONS, INC. | ||
| |
|
|
| By: | /s/ Xxxx X. Xxxxxx | |
|
Name: | ||
| Title: | ||
| ALPHAWEST CAPITAL PARTNERS, LLC | ||
| |
|
|
| By: | /s/ Xxxx X. Xxxx | |
|
Xxxx X. Xxxx | ||
| Managing Member | ||
8
Exhibit
A
Stock
Option Agreement
9
