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EXHIBIT 10.12
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (this "Agreement"), is made and entered into
as of the 1st day of October, 1999, by and between WORLD COMMERCE ONLINE, INC.,
a Delaware corporation, with an address at 0000 Xxxxxxxxx Xxxxx, Xxxxxxx,
Xxxxxxx 00000 ("Corporation"), and Xxxxxxx Xxxxx III, with an address at 000
Xxxxxxxxxx Xxxx, Xxxxxx Xxxxx, XX 00000 ("Consultant").
R E C I T A L S:
WHEREAS, Corporation is engaged in the business of developing and
promoting an online, Global Commercial Network (GCN) known as "Floraplex," with
its related trading systems "Tradelink" (Growers/Importers to Wholesalers),
"FloraMall" (Wholesalers to Retailers), and "FloraShops" (Retailers to
Consumers) [hereinafter collectively referred to as "FLORAPLEX"], for
conducting worldwide e-commerce in the floral industry using the World Wide Web
(HEREINAFTER, "BUSINESS");
WHEREAS, Corporation desires to retain the services of Consultant to
promote Floraplex, particularly promoting Floraplex for use by retail florists;
WHEREAS, Consultant is currently engaged in the business of the
distribution of floral products (flowers and hard goods) known as "The Kremp
Network," through a corporation owned and controlled by Consultant (hereinafter
"Business"), but Consultant now desires to promote "Floraplex" to the exclusion
of any other e-commerce or floral distribution solution;
WHEREAS, Consultant executes this Agreement, intending Corporation to
rely on the terms, covenants, and provisions specifically set forth and stated
herein, and expressly to induce Corporation to engage Consultant; and
WHEREAS, Consultant currently has or will have access to Corporation's
Confidential Information (hereinafter defined in Section 8(a); and Corporation,
as an express condition precedent to retaining Consultant, requires that
Consultant execute this Agreement wherein Consultant expressly covenants and
agrees to maintain the confidentiality of the Confidential Information and not
to engage in conduct competitive to the Corporation;
NOW, THEREFORE, for the reasons set forth above, and in consideration
of the mutual promises contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Consultant hereby covenants and agrees as follows:
1. RECITALS. The foregoing recitals are true and correct and form a
part of this Agreement.
2. TERM. Corporation hereby retains Consultant for a three-year
period (the "Term") beginning October 1, 1999 ("Starting Date"), and ending
September 30, 2002.
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3. CONSULTANT'S DUTIES. Consultant shall serve as a general advisor
and consultant to management on matters pertaining to the promotion of
Floraplex, with an emphasis on the rollout and promotion of the "FloraMall" and
"FloraShops" trading systems, and such other matters pertaining to the
Corporation's business as may, from time-to-time, be assigned to Consultant. As
a material inducement of this Agreement, Consultant agrees to immediately cause
The Kremp Network to cease operating, to wind up its business affairs, and to
advise and encourage members using The Kremp Network to transfer their business
to Floraplex. For the Term of this Agreement, Consultant shall so curtail the
business activities of The Kremp Network.
4. CONSIDERATION. The Consultant shall receive the following
consideration for the performance of his duties:
a. STOCK/WARRANT GRANT. Corporation shall issue and deliver,
or cause its transfer agent to so deliver, to Consultant certificate(s)
representing twenty thousand (20,000) shares of common stock, par value of
$.001 per share. Corporation shall also issue Consultant warrants to purchase
two hundred fifty thousand (250,000) shares of common stock at $8.00 per share
pursuant to a Warrant Agreement to be executed herewith in the form attached
hereto as EXHIBIT "A."
b. COMPENSATION. Consultant shall be paid $300,000.00 in total
compensation on the following schedule:
i. $25,000.00 upon execution of this Agreement, and
thereafter $25,000.00 on the first day of each calendar quarter for eleven (11)
successive quarters.
5. INVESTMENT REPRESENTATION. Consultant hereby represents that he
understands that the transaction contemplated by this Agreement is to be
carried out as a transaction exempt from registration under the Securities Act
of 1933, as amended (the "Act"), and accordingly neither the Warrants nor the
shares underlying the Warrants (collectively, the "Shares") will have been
registered under the Act at the time of delivery to Consultant. Consultant
further represents that he is acquiring the Shares for investment purposes only
and not with a view to or for resale in connection with any distribution of the
Shares, nor with any present intention of distribution (within the meaning of
the Act) of the Shares. Consultant understands that because the Shares will not
have been registered under the Act, Consultant will not permit the transfer of
such Shares without registration under the Act, or upon the issuance to the
Corporation of a favorable opinion of its counsel or of the submission to
Corporation of such other evidence as may be satisfactory to counsel for the
Corporation, in either case, to the effect that any such transfer, whether
pursuant to Rule 144 of the Act or otherwise, shall not violate the Act, and
any applicable state securities laws, and that the share certificates
representing such Shares will be issued with a restrictive legend providing
notice of such restriction.
6. ACCESS TO INFORMATION. Consultant hereby represents and warrants
to Corporation that he has had an opportunity to ask questions of, and receive
answers from, appropriate officers and representatives of the Corporation
concerning the terms and conditions of the issuance of the
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Shares and to obtain any additional information concerning the Corporation
which he has requested. In addition, Consultant represents and warrants that
the Corporation has made available for inspection by him various documents
connected with the Corporation's business and has not refused in any way to
permit Consultant to inspect any document requested by him to be inspected.
7. EXPENSE REIMBURSEMENT AND OTHER BENEFITS. Upon the submission of
proper substantiation by Consultant, and subject to Corporation's sole
discretion, including rules and guidelines as Corporation may from time-to-time
adopt, Corporation shall reimburse Consultant for all reasonable expenses
actually paid or incurred by Consultant during the Term in the ordinary course
of Corporation's business. Consultant shall account to Corporation in writing
for all expenses for which reimbursement is sought and shall supply to
Corporation copies of all relevant invoices, receipts or other evidence
reasonably requested by Corporation.
8. TERMINATION. This Agreement may be terminated/canceled by either
party upon the occurrence of any of the following, and the terminating/
canceling party shall have no liability to the other party for the exercise of
such right of termination/cancellation:
a. Either party may terminate this Agreement by written notice
effective at the end of the calendar quarter in which the termination notice is
sent or transmitted by the terminating party;
b. In the event that the other party has breached a covenant,
obligation or warranty under this Agreement, and such breach remains uncured
for a period of thirty (30) days after notice thereof is delivered to such
other party;
c. In the event the other party ceases to conduct business;
d. In the event the other party becomes insolvent, makes a
general assignment for the benefit of creditors, files a voluntary petition of
bankruptcy, suffers or permits the appointment of a receiver for its business
or assets, or becomes subject to any proceeding under any bankruptcy or
insolvency law, whether domestic or foreign, or has wound up or liquidated,
voluntarily or otherwise; or
e. In the event of the mutual agreement of the parties hereto.
9. RESTRICTIVE COVENANTS.
a. CONFIDENTIAL INFORMATION. Consultant hereby acknowledges
and agrees that in the course of his consulting engagement, he will acquire
knowledge and will have access to information, whether in written, typed or
other form, regarding the business operations of Corporation. Specifically, the
following types of information are deemed confidential ("Confidential
Information") and shall not be disclosed or used by Consultant except as
required and authorized in furtherance of Corporation's business: (i) trade
secrets, as defined in Section 688.002(4), Florida Statute's; specific
prospective customers of the Corporation; (ii) specific existing customers of
the Corporation; (iii) other individuals and businesses with whom Corporation
does business; proprietary information; (iv) financial or corporate records; (v)
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operational, sales, promotional, and marketing methods and techniques; (vi)
computer programs, including source codes and object codes; and (vii) any other
proprietary, competition-sensitive, or technical information or secrets
developed with or without the help of Consultant.
b. NONDISCLOSURE. Consultant shall not, during the term of
his consulting engagement, or at any time thereafter, either directly or
indirectly, communicate, publish, disclose, divulge, or use, or authorize
anyone else to communicate, publish, disclose, divulge, or use, for the benefit
of himself or any other person, persons, partnership, association, corporation,
or other entity, any Confidential Information which may be communicated to
Consultant or of which Consultant may be apprised by virtue of his employment
with Corporation. Any and all information, knowledge, know-how, and techniques
which Corporation designates as confidential shall be deemed confidential for
purposes of this Agreement, except information which Consultant can demonstrate
came to his attention prior to disclosure thereof by Corporation; or which, at
or after the time of disclosure by Corporation to Consultant, lawfully had
become a part of the public domain through lawful publication or communication
by others.
c. NONCOMPETITION. Provided Corporation is not in breach of
this Agreement, Consultant covenants that, except as otherwise approved in
writing by Corporation, Consultant shall not, during the term of this
Agreement, and for a continuous uninterrupted PERIOD OF TWELVE (12) MONTHS IF
CORPORATION TERMINATES THIS AGREEMENT, OR ALTERNATIVELY TWENTY-FOUR (24) MONTHS
IF CONSULTANT TERMINATES THIS AGREEMENT, commencing upon the termination of
Consultant's consulting relationship with Corporation, regardless of the cause
for termination, individually, or jointly with others, either directly or
indirectly, for himself, or through, on behalf of, or in conjunction with any
person, persons, partnership, association, corporation, or other entity, own,
maintain, operate, engage in, or have any interest in any business enterprise
which is the same as, similar to or competitive with the Business, INCLUDING,
WITHOUT LIMITATION, FTD, AFS, TELEFLORA, 1-800-FLOWERS, OR ANY OTHER WIRE
SERVICE, regardless of the geographical location of such other business
enterprise, shall not directly or indirectly act as an officer, director,
employee, partner, contractor, consultant, advisor, principal, agent, or
proprietor, or in any other capacity for, nor lend any assistance (financial,
managerial, consulting or otherwise) to or cooperate with, any such business
enterprise. SPECIFICALLY, THIS COVENANT SHALL PRECLUDE CONSULTANT FROM ENGAGING
IN ANY BUSINESS ACTIVITIES SIMILAR TO THAT BEING CONDUCTED BY THE KREMP NETWORK
FOR THE DISTRIBUTION OF FLORAL PRODUCTS.
d. NONSOLICITATION. Consultant specifically acknowledges that
he will have access to Confidential Information, including, without limitation,
trade secrets and prospective and existing customers or customer lists of
Corporation. Consultant covenants and agrees that during the term of this
Agreement, and for a continuous uninterrupted period of twenty four (24)
months, commencing upon the expiration or termination of Consultant's
relationship with Corporation, except as otherwise approved in writing by
Corporation, Consultant shall not, either directly or indirectly, for himself,
or through, on behalf of, or in conjunction with any person, persons,
partnership, association, corporation, or entity:
i. Divert or attempt to divert or solicit any prospective or
existing customer of Corporation to any competitor by direct or indirect
inducement or otherwise; or
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ii. Employ or seek to employ any person who is at that time
employed by Corporation, any affiliate of Corporation, or otherwise directly or
indirectly induce or solicit such person to leave his or her employment.
e. REASONABLY NECESSARY. Corporation and Consultant agree that
the Confidential Information set forth in Section 8(a), including, without
limitation, trade secrets: (i) are valuable, special, and a unique asset of
Corporation; (ii) have provided and will hereafter provide Corporation with a
substantial competitive advantage in the operation of its business; and (iii)
are a legitimate business interest of Corporation. Corporation and Consultant
also agree that the existence of these legitimate business interests justifies
the need for the restrictive covenants set forth in this Section 8, and the
restrictive covenants are reasonably necessary to protect Corporation's
legitimate business interests.
f. REASONABLE RESTRICTIONS. Consultant agrees and acknowledges
that the geographical and time limitations contained in this Agreement are
reasonable and properly required for the adequate protection of Corporation. It
is agreed by Consultant that if any portion of the restrictions contained in
this Agreement is held to be unreasonable, arbitrary, or against public policy,
then the restriction shall be considered divisible, both as to the time and to
the geographical area, with each month of the specified period being deemed a
separate period of time, and each country or portion thereof being deemed a
separate geographical area, so that the lesser period of time or geographical
area shall remain effective, so long as the same is not unreasonable,
arbitrary, or against public policy. The parties hereto agree that in the event
any court of competent jurisdiction determines the specified period or the
specified geographical area of the restricted territory to be unreasonable,
arbitrary, or against public policy, a lesser time period or geographical area
which is determined to be reasonable, non-arbitrary, and not against public
policy may be enforced against Consultant.
g. CONTINUITY OF RESTRICTIONS. If Consultant shall violate any
of the terms or covenants contained herein, and if any court action is
instituted by Corporation to prevent or enjoin such violation, then the period
of time during which the terms or covenants of this Agreement shall apply, as
provided in this Agreement, shall be lengthened by a period of time equal to
the period between the date of the initial breach of the terms or covenants
contained in this Agreement, whether or not Corporation had knowledge of the
breach, and the date on which the decree of the court disposing of the issues
upon the merits shall become final and not subject to further appeal.
10. REMEDIES.
a. Consultant and Corporation hereby acknowledge and agree
that, in the event of any breach by Consultant, directly or indirectly, of the
foregoing restrictive covenants, it will be difficult to ascertain the precise
amount of damages that may be suffered by Corporation by reason of such breach;
and accordingly, the parties hereby agree that, as liquidated damages (and not
as a penalty) in respect of any such breach, Consultant shall be required to
provide an accounting of any and all benefits received or derived, either
directly or indirectly, by Consultant as a result of such breach, including, but
not limited to, true and correct financial records, or
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other data detailing the financial benefit Consultant received or derived,
directly or indirectly, from any and all violations, and Consultant thereafter
shall be required to pay to Corporation, as liquidated damages, cash amounts
equal to any and all gross revenues received or derived by Consultant, directly
or indirectly, from any and all violations. The parties hereby agree that the
foregoing constitutes a fair and reasonable estimate of the actual damages that
might be suffered by reason of any breach of Section 8 by Consultant, and the
parties hereby agree to such liquidated damages in lieu of any and all other
measures of damages that might be asserted in respect of any subject breach.
b. Consultant agrees that a violation or a breach of the
terms, covenants, or provisions contained in this Agreement would cause
irreparable injury to Corporation, and that the remedy at law for any violation
or breach would be inadequate and would be difficult to ascertain, and
therefore, in the event of the violation or breach, or threatened violation or
breach of any such terms, covenants, or provisions contained in this Agreement,
Corporation shall have the independent right to enjoin Consultant from any
threatened or actual activities in violation thereof. Consultant hereby
consents and agrees that temporary and permanent injunctive relief may be
granted in any proceedings which might be brought to enforce any such terms,
covenants, or provisions without the necessity of proof of actual damages or
the posting of a bond. In the event Corporation does apply for such an
injunction, Consultant shall not raise as a defense thereto that Corporation
has an adequate remedy at law.
11. OWNERSHIP OF DEVELOPMENTS. All copyrights, patents, trade
secrets, or other intellectual property rights associated with any ideas,
concepts, techniques, inventions, processes, or works of authorship developed
or created by Consultant during the course of performing work for Corporation
or its clients (collectively, the "Work Product") shall belong exclusively to
Corporation and shall, to the extent possible, be considered a work made by
Consultant for hire for Corporation within the meaning of Title 17 of the
United States Code. To the extent the Work Product may not be considered work
made by Consultant for hire for Corporation, Consultant agrees to assign, and
automatically does assign at the time of creation of the Work Product, without
any requirement of further consideration, any right, title, or interest
Consultant may have in such Work Product. Upon the request of Corporation,
Consultant shall take such further actions, including execution and delivery of
instruments of conveyance, as may be appropriate to give full and proper effect
to such assignment.
12. RETURN OF RECORDS AND PROPERTY. Upon the request of Corporation,
or absent such request, upon the termination of Consultant's relationship
contemplated in this Agreement with Corporation for any reason, Consultant
shall immediately return to Corporation all of Corporation's property and any
and all copies thereof in Consultant's possession (the "Property"). The
Property shall include, but shall not be limited to, all notes, data, reference
material, sketches, drawings, memoranda, files, documents, specifications and
any records or any other property, tangible or intangible, in any way relating
to any of the Confidential Information or to Corporation's business, whether
prepared by Consultant or otherwise coming into Consultant's possession. The
Property shall remain the exclusive property of Corporation and shall not be
removed from the premises of Corporation under any circumstances whatsoever
without the prior written consent of Corporation.
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13. NATURE OF RELATIONSHIP. Consultant herein is an independent
contractor and will not act as Corporation's agent, nor shall be deemed an
employee of Corporation for any purpose and shall not be entitled to any
employee fringe benefits. Consultant shall not enter into any agreement or
incur any obligations on Corporation's behalf, or commit Corporation in any
manner without Corporation's prior written consent. As an independent
contractor, Consultant understands and agrees that Consultant is solely
responsible for the control and supervision of the means by which Consultant's
services are performed.
14. WAIVER. No waiver by Corporation of any default or
nonperformance hereunder shall be deemed a waiver of any subsequent default or
nonperformance. No waiver shall be effective unless in writing, and signed by
the party or parties to which the performance of duty is owed. No delay in the
serving of any right or remedy shall constitute a waiver of any right or
remedy.
15. CUMULATIVE REMEDIES. Notwithstanding the foregoing, all remedies
of Corporation hereunder are cumulative, in addition to any other remedies
provided for by law, and may, to the extent permitted by law, be exercised
concurrently or separately. The exercise of any one remedy shall not be deemed
to be an election of such remedy, or to preclude the exercise of any other
remedy.
16. INDEPENDENT COVENANTS. The parties agree that each of the
covenants and provisions contained in this Agreement shall be deemed severable
and construed as independent of any other covenant or provision. If all or any
portion of a covenant or provision in this Agreement is held invalid,
unreasonable or unenforceable by a court or agency having valid jurisdiction in
an unappealed final decision to which Corporation is a party, the remaining
covenants and provisions shall remain valid and enforceable. Consultant
expressly agrees to be bound by any lesser covenant or provision subsumed
within the terms of such covenant or provision that imposes the maximum duty
permitted by law, as if the resulting covenant or provision were separately
stated in, and made a part of this Agreement.
17. ENTIRE AGREEMENT. This Agreement contains and represents the
entire and complete understanding and agreement concerning and in reference to
the employment arrangement between the parties hereto. The parties hereto agree
that no prior statements, representations, promises, agreements, instructions,
or understandings, written or oral, pertaining to this Agreement, other than
those specifically set forth and stated herein, shall be of any force or
effect.
18. MODIFICATIONS AND AMENDMENTS. This Agreement may not be, and
shall not be construed to have been, modified, amended, rescinded, canceled, or
waived, in whole or in part, except if done so in writing and executed by the
parties hereto.
19. ATTORNEYS' FEES. In the event of a dispute regarding, arising
out of, or in connection with the breach, enforcement, or interpretation of
this Agreement, including, without limitation, any action seeking declaratory
relief, equitable relief, injunctive relief, or damages, or any litigation or
cause of action, including, without limitation, any appeals, federal bankruptcy
proceedings, receivership or insolvency proceedings, reorganization, or other
proceedings, the
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prevailing party shall recover all costs and actual attorney's fees incurred in
connection therewith, including any costs of collection (including paralegals'
fees).
20. PERSONAL JURISDICTION; VENUE. EACH PARTY HERETO AGREES TO SUBMIT
TO THE PERSONAL JURISDICTION AND VENUE OF THE STATE AND FEDERAL COURTS LOCATED
IN ORANGE COUNTY, FLORIDA, FOR RESOLUTION OF ALL DISPUTES ARISING OUT OF, IN
CONNECTION WITH, OR BY REASON OF THE INTERPRETATION, CONSTRUCTION, AND
ENFORCEMENT OF THIS AGREEMENT, AND HEREBY WAIVES THE CLAIM OR DEFENSE THEREIN
THAT SUCH COURTS CONSTITUTE AN INCONVENIENT FORUM.
21. WAIVER OF JURY TRIAL. AS A MATERIAL INDUCEMENT FOR THIS
AGREEMENT, CONSULTANT SPECIFICALLY WAIVES THE RIGHT TO TRIAL BY JURY OF ANY
ISSUES SO TRIABLE.
22. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Florida, and to the exclusion of
the law of any other forum, without regard to the jurisdiction in which any
action or special proceeding may be instituted.
23. CONSTRUCTION. Each party to this Agreement had the opportunity
to consult with counsel of their choice and make comments concerning the
Agreement. No legal or other presumption against the party drafting this
Agreement concerning its construction, interpretation or otherwise accrue to
the benefit of any party to this Agreement and each party expressly waives the
right to assert such a presumption in any proceedings or disputes connected
with, arising out of, or involving this Agreement.
24. SECTION HEADINGS. The titles to the numbered paragraphs in this
Agreement are solely for the convenience of the parties and shall not be used
to explain, modify, simplify, or aid in the interpretation of said covenants or
provisions set forth therein.
IN WITNESS WHEREOF, the parties hereto have executed this Consulting
Agreement as of the date first set forth above.
WORLD COMMERCE ONLINE, INC., a
Delaware corporation
By: /s/ Xxxxxx X. Xxxx
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Xxxxxx X. Xxxx, CEO/President
/s/ Xxxxxxx Xxxxx III
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Xxxxxxx Xxxxx III
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