Exhibit 10.9
CONSULTING AGREEMENT
THIS AGREEMENT (this "Agreement"), made this 20th day of December, 1999,
by and between XXXXX X. XXXXX ("Xxxxx"), a person of the full age of majority
and resident of the State of North Carolina, and AFFINITY INTERNATIONAL TRAVEL
SYSTEMS, INC. (the "Company"), a Nevada corporation.
WHEREAS, Xxxxx has certain expertise in financial and capital investment
matters which will be beneficial to the Company in the conduct of its business;
WHEREAS, the Company desires to retain Xxxxx as a consultant and advisor
to the Company in connection with certain financial and capital investment
matters of the Company and Xxxxx desires to be so retained and to enter into
such an agreement with the Company.
NOW, THEREFORE, in consideration of the covenants and agreements herein
contained and the consideration to be paid hereunder, and for other valuable
consideration, the parties agree as follows:
1. Recitals are True. The above recitals are true and correct and
incorporated herein.
2. Consulting Services. The Company agrees to retain Xxxxx and Xxxxx
agrees to be retained by the company to actively identify and solicit potential
investors for the Company, to help position the Company optimally for an
investment transaction, to assist in closing of any such investment transaction,
and identify, solicit and cultivate synergistic and strategic relationships for
the Company on an as-needed basis from and after the date hereof until
terminated in accordance with the provisions of Section 6 hereinbelow.
3. Devotion of Time to Consulting Services. Xxxxx shall devote such time
to rendering consulting and advising services as is reasonably requested from
time-to time by the Company. The services to be rendered by Xxxxx to the Company
hereunder may be rendered in person or by letter, telephone or other means of
communication as shall be appropriate under the circumstances. Xxxxx shall not
be required to observe any fixed schedule of attendance at the principal place
of business of the Company or any other person or entity for the rendition of
such services; provided, however, that Xxxxx shall commit sufficient time to the
business of the Company to generate gross investments in the Company as follows:
(a) $500,000.00 by January 31, 2000;
(b) an additional $1,000,000.00 by February 29, 2000;
(c) an additional $1,500,000.00 by March 31, 2000;
(d) an additional $1,500,000.00 by April 30, 2000; and
(e) an additional $1,500,000.00 by May 15, 2000.
4. Consideration for Consulting Services. As consideration for Xxxxx
services hereunder during the term of this Agreement, the Company shall pay
Xxxxx and Xxxxx shall accept from the Company the following:
(a) A sum equal to five percent (5%) of the gross investment
proceeds received by the Company (i) from investor(s)
introduced to the Company by Xxxxx or (ii) in a transaction
with respect to which Xxxxx' efforts were instrumental in
negotiating and closing on behalf of the Company. In addition,
at the option of Xxxxx, Xxxxx may give notice to the Company
that it is his good faith belief that the offering price per
share of the common stock can be increased over and above the
initial offering price of $1.00 per share, for each $0.01 per
share increase in the actual selling price of the common
stock, the commission payable to Xxxxx pursuant to this
Section 4(a) shall be increased by one (1) basis point up to a
maximum of 10% (e.g., if the original offering price is $1.00
per share at a selling price of $2.00 per share, the
commission would be increased to 6% of the gross investment
proceeds received by the Company). Such sum shall be due and
payable by the Company within five (5) business days of
confirmation that the proceeds or consideration from such
investment transaction have been received by the Company; and
(b) Subject to the adjustment provisions set forth hereinbelow, up
to 630,343 shares of restricted common stock, prorated
according to the ratio of 315,172 shares of common stock for
each $3,000,000 of gross investment proceeds received by the
Company as a result of Xxxxx' efforts, for a maximum
investment of $6,000,000.00 (e.g., if the Company receives
$1,000,000.00 in gross investment proceeds, the Company will
issue Xxxxx 105,057 shares); and
(c) Subject to the adjustment provisions set forth hereinbelow,
warrants to purchase up to 252, 137 shares of restricted
common stock prorated according to the ratio of a warrant to
purchase 126,067 shares of common stock for each $3,000,000 of
gross investment proceeds received by the Company as a result
of Xxxxx' efforts, for a maximum investment of $6,000,000.00
(e.g., if the Company receives $1,000,000.00 in gross
investment proceeds, the Company will grant to Xxxxx a warrant
to purchase 42,023 shares). The exercise price of such
warrants shall be $2.00 per share, which upon exercise,
payment for the shares of common stock underlying the warrants
may be made through "cashless exercise", as defined
hereinbelow, and the warrants may be exercised at any time
from and after the date of receipt by Xxxxx for up to five (5)
years form such date.
In the event that the contemplated divestiture transaction with Prestige
Travel is not consummated by June 30, 2000, the maximum number of shares
available to be earned by Xxxxx pursuant to Section 4(b) hereinabove shall be
700,344 and the warrants to purchase shares of common stock pursuant to Section
4(c) hereinabove shall be for a maximum of 280,137 shares.
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If the divestiture of Prestige Travel is not consummated prior to June 30, 2000,
any additional shares or warrants to purchase shares owed to Xxxxx shall be
transferred to Xxxxx by the Company on July 1, 2000.
The term "cashless exercise" means in lieu of any cash payment required
hereunder for the exercise of the warrants, Xxxxx shall have the rights to
exercise the warrant in whole or in part by surrendering the warrant in exchange
for the number of shares of the Company's Common stock equal to (x) the number
of shares as to which the warrant is being exercised multiplied by (y) a
fraction, the numerator of which is the Market Price (as defined below) of the
common stock less than the aggregate exercise price of the warrant being
exercised and the denominator of which is the Market Price. The term "Market
Price" means the average of the closing sale price per share of the common stock
on the principal stock exchange or market on which the common stock is then
quoted or traded on each of the ten (10) consecutive trading days preceding the
date on which written notice of election to exercise the warrants has been given
to the company. If xxxxx opts for a cashless exercise of the warrant, no other
consideration shall be paid to the Company, other than surrendering the warrant
itself, nor will there be paid any to the commission or other remuneration to
any other person or entity by Xxxxx.
5. Status as Independent Contractor. The parties agree that Xxxxx'
relationship with the Company will be that of independent contractor, and
nothing in this Agreement shall be deemed to create an employer - employee
relationship between the parties. As such, Xxxxx will not be entitled to any
compensation other than agreed upon herein.
6. Term of Agreement. The effective date of this Agreement shall be the
date hereof, and it shall remain effective and continue in force and effect
until terminated in accordance herewith; this Agreement may be terminated by
either party upon ten (10) business days prior written notice to the other
party. Termination of this Agreement pursuant to this Section 6 shall in no way
terminate the obligation of the Company to pay to Xxxxx any amounts accrued
under Section 4 hereof prior to termination. In the event that Xxxxx shall fail
to meet the specified gross investment goals set forth in Section 3 hereof, this
Agreement shall be immediately terminable at the option of the Company without
advanced notice to Xxxxx.
7. Obligations of the Company. During the term of this Agreement, the
President, Vice President, or another high level executive of the Company
familiar with the business plan of the Company shall be reasonably accessible to
Xxxxx for the purpose of presenting and explaining the business plan and
opportunities of the Company to potential investor contacts of Xxxxx and
providing other reasonably necessary assistance as requested by Xxxxx.
8. Compliance with Laws. Xxxxx shall at all times during this Agreement be
in material compliance with all federal and state laws, including, but not
limited to, all provisions of the Securities Act of 1933, as amended (the
"Securities Act") , the Securities Exchange Act of 1934, as amended, and in the
Investment Advisors Act of 1940 , as amended. Xxxxx specifically agrees not to
make any general solicitations or public advertisements in connection with any
offers to sell or sales of the securities of the Company since the offering is
being made without registration of the common stock under the Securities Act in
reliance on an exemption for transactions by an issuer not involving a public
offering and since the common stock is being sold without any investor being
furnished a prospectus setting forth all of the information that
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would be required to be furnished under the Securities Act and since the
purchasers are required to be "accredited investors" as defined in Rule 501 of
Regulation D under the Securities Act.
9. Severability. The parties hereto intend all provisions of this
Agreement to be enforced to the fullest extent permitted by law. Accordingly,
should a court of competent jurisdiction determine that the scope of any
provision is too broad to be enforced as written the parties intend that the
court should reform the provision to such narrower scope as it determines to be
enforceable. If, however, any provision of this Agreement is held to be illegal,
invalid, or unenforceable under present or future law, such provision shall be
fully severable; this Agreement shall be construed and enforced as if such
illegal, invalid, or unenforceable provision were never a part hereof; and the
remaining provisions of this Agreement shall remain in full force and effect and
shall not be affected by the illegal, invalid or unenforceable provision or by
its severance, except to the extent such remaining provisions constitute
obligations of another party to this Agreement corresponding to the
unenforceable provision.
10. Notices. Any and all notices, demands, requests, designations,
consents, offers, acceptances or any other communications that may be or are
required to be given, served or sent by any party to another party pursuant to
this Agreement shall be in writing and shall be mailed by certified mail, return
receipt requested, or by verifiable overnight delivery postage prepaid, or
transmitted by hand delivery (against a signed receipt) or by facsimile with
confirmation of receipt addressed as follows: (a) if to Xxxxx at 0000 Xxxxxxxx
Xxxxx Xxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000; (b) if to the Company at 000
Xxxxxx Xxxxxx Xxxxx, Xxxxx 0000X, Xx. Xxxxxxxxxx, Xxxxxxx 00000 FAX: (727)
000-0000 with a copy to Xxxx Xxxxxxx, Brown, Rudnick, Freed & Gesmer, Xxx
Xxxxxxxxx Xxxxxx, Xxxxxx, XX 00000 (FAX: (000) 000-0000 or to such other address
which may be designated by either the Company or Xxxxx.
11. Modification. No change or modification of this Agreement shall be
valid unless the same be in writing and signed by the parties hereto, other than
modification by a Court of law in accordance with Section 9 hereof.
12. Applicable Law and Binding Effect. This Agreement shall be construed
and regulated under and by the laws of the State of Nevada and shall inure to
the benefit of and be binding upon the parties hereto and their heirs, personal
representatives, successors and assigns.
13. Equitable Remedies. Each party hereto acknowledges that a refusal
without just cause by such party to consummate the transactions contemplated
hereby will cause irreparable harm to the other party, for which there may be no
adequate remedy at law. A party not in default at the time of such refusal shall
be entitled, in addition to other remedies at law or in equity, to specific
performance of this Agreement by the party that so refused or failed to
consummate the transactions contemplated hereby. In any action to enforce the
terms of this Agreement, the successful party shall be entitled to recover its
reasonable attorneys' fees, all costs and expenses from the party who refused or
failed to perform this Agreement.
14. Waiver, Amendment. Neither this Agreement nor any provisions of this
Agreement shall be modified, changed, discharged or terminated except by an
instrument in writing, signed by the party against whom any waiver, change,
discharge or termination is sought.
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15. Assignability. Neither this Agreement nor any right, remedy,
obligation or liability arising hereunder or by reason of this Agreement shall
be assignable by the Company or Xxxxx without the prior written consent of the
undersigned.
16. Expenses. The Company and Xxxxx shall pay their own respective
expenses incurred in connection with this Agreement and the transactions
contemplated hereby. In any action to enforce the terms of this Agreement, the
successful party shall be entitled to recover its reasonable costs and expenses,
including reasonable attorneys' fees, from the party who refused or failed to
perform this Agreement.
17. Section and Other Headings. The section and other headings contained
in this Agreement are for reference purposes only and shall not affect the
meaning or interpretation of this Agreement.
18. Counterparts. This Agreement may be executed in any number of
counterparts each of which when so executed and delivered shall be deemed to be
an original and all of which together shall be deemed to be one and the same
agreement.
19. Binding Effect. The provisions of this Agreement shall be binding upon
and accrue to the benefit of the parties and their respective successors and
permitted assigns.
20. Survival. All representations contained in this Agreement shall
survive the closing of the issuance and sale of the shares of common stock.
IN WITNESS WHEREOF, the undersigned have hereunto caused this Agreement to
be executed the day and year first above written.
AFFINITY INTERNATIONAL
TRAVEL SYSTEMS, INC.,
a Nevada corporation
By: /s/ X.X. Xxxxxxxx
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XXXXXX X. XXXXXXXX
President
/s/ Xxxxx X. Xxxxx
--------------------------------
XXXXX X. XXXXX
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