EXHIBIT 10.29
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CONSULTING SERVICES AGREEMENT
THIS CONSULTING SERVICES AGREEMENT (the "AGREEMENT") entered into this
24th day of July, 2001, (hereinafter the "EFFECTIVE DATE"), by and between
XXXXXX.XX INC., a Nevada corporation with its principal office at 000 Xxxx
Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx, XX Xxxxxx V6C-2T8 (the "COMPANY"), and
YORKVILLE ADVISORS MANAGEMENT, LLC, a Delaware limited liability company, with
its principal office at 000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000 (the
"CONSULTANT").
Company desires to retain the services of Consultant as an independent
contractor to provide certain consulting and advisory services designated below,
and Consultant desires to accept such engagement by Company, pursuant to the
terms and conditions of this Agreement.
In consideration of the representations, warranties, mutual covenants and
agreements set forth herein, the parties agree as follows:
1. SCOPE OF SERVICES
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a. DUTIES AND PERFORMANCE. From time to time during the term of
this Agreement, Consultant shall provide such advisory services relating to the
Company's financial status and capital structure (the "SERVICES") to Company as
Consultant and Company shall agree. In connection with the Services, Consultant
may develop and communicate to Company certain business opportunities with
entities known to Consultant; the Services may include various types of
arrangements, including direct investment into Company.
b. INDEPENDENT CONTRACTOR STATUS. The parties agree that
Consultant is an independent contractor performing Services hereunder and not an
employee of Company. Consultant may use contractors or other third parties of
Consultant's choice to assist Consultant in rendering such Services. Unless
otherwise agreed by Company in writing, Consultant shall be responsible for
payment of all compensation or expenses payable or reimbursable to such third
parties. Nothing herein or in the performance hereof shall imply either a joint
venture or principal and agent relationship between the parties, nor shall
either such relationship be deemed to have arisen under this Agreement.
2. COMPENSATION AND EXPENSES
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a. FINDER'S FEE; NOT A BROKER. In the event of financing pursuant
to the Equity Line of Credit Agreement dated as of the date hereof by and
between the Company and Cornell Capital Partners, L.P. (the "EQUITY LINE OF
CREDIT AGREEMENT"), the Company shall pay to the Consultant cash compensation
equal to ten percent (10%) of the gross proceeds of any Advance under the terms
of the Equity Line of Credit Agreement to be paid directly out of escrow.
b. AUDIT OF BOOKS AND RECORDS. Company shall maintain all books
and records necessary to account for all transactions involving fees which may
be payable hereunder. Consultant and Consultant's professional advisors may
audit, review or examine such books and records at any time during business
hours upon twenty- four (24) hours' prior notice but not more than once each
calendar quarter. If as a result of such review, Consultant determines that
Company received funds for which Consultant was not properly compensated, then
Company (i) shall be responsible for fully reimbursing Consultant for the cost
of such review, audit or examination and (ii) shall pay any amount determined to
be payable to Consultant within three (3) days of receipt of written notice from
Consultant plus interest at the rate of ten percent (10%) per annum from the
date on which payment should have been made to Consultant.
c. EXPENSE REIMBURSEMENT. While this Agreement is in effect,
Company shall pay for or reimburse Consultant for all reasonable and itemized
business expenses incurred by Consultant directly related to the services to be
performed by Consultant under this Agreement. Consultant shall keep accurate and
detailed records of such expenses and submit expense reports along with relevant
documentation in accordance with the expense reimbursement policy of Company.
Company shall pay or reimburse Consultant for all reasonable out-of-pocket
expenses actually incurred or paid by Consultant in the course of performing
services as required hereunder; PROVIDED, that any individual expense in excess
of five hundred dollars ($500.00) must be approved in advance by Company.
d. NON-CIRCUMVENTION. Company represents and warrants that
Company shall take no action which shall result in Company and any third-party
introduced to Company, directly or indirectly, by Consultant consummating a
relationship or transaction with Company without the participation and
compensation of Consultant. In the event Company consummates any such
transaction, Company shall pay Consultant the fees set forth in Section 2(a)
hereof at the time of closing such transaction or transactions. In the event
Consultant brings an action or seeks counsel to enforce the provisions of this
Section 2(c), Company shall be responsible for all fees and expenses incurred by
Consultant including fees and expenses of any appeal or collection of any
judgment.
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e. REGISTRATION RIGHTS. Subject to the terms and conditions of
this Agreement, Company shall notify the holder of Registrable Securities (as
defined below) in writing at least ten (10) days prior to the filing of any
registration statement under the 1933 Act for purposes of a public offering of
securities of Company (including, but not limited to, registration statements
relating to secondary offerings of securities of Company, but excluding any
registration statement relating to any employee benefit plan or with respect to
any corporate reorganization or other transaction under Rule 145 of the 0000
Xxx) and will afford each such holder an opportunity to include in such
registration statement all or part of such Registrable Securities held by such
holder. Each holder of Registrable Securities desiring to include in any such
registration statement, all of part of the Registrable Securities held by it
shall, within ten (10) days after the above-described notice from Company, so
notify Company in writing. Such notice shall state the intended method of
disposition of the Registrable Securities held by such holder. If a holder
decides not to include all of its Registrable Securities in the registration
statement thereafter filed by Company, such holder shall nevertheless continue
to have the right to include any Registrable Securities in any subsequent
registration statement or registration statements as may be filed by Company
with respect to offerings of its securities, all upon the terms and conditions
set forth herein. "REGISTRABLE SECURITIES" means the shares of Consultant's
Common Stock issuable to the Consultant pursuant to this Agreement.
3. INDEMNIFICATION
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Exhibit A attached hereto and made a part hereof sets forth the
understanding of the parties with respect to the indemnification and exculpation
of Consultant. The provisions of Exhibit A shall survive, and remain in full
force and effect after, the termination of this Agreement until fully performed.
4. TERM AND TERMINATION
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The initial term of this Agreement shall be for a period commencing on the
Effective Date hereof and ending on the two (2) year anniversary of the date of
this Agreement; thereafter, unless previously terminated, and neither party has
given notice of termination, this Agreement shall be automatically renewed for
successive year periods of one (1) year each. Either party may terminate this
Agreement without cause or without the necessity of specifying cause by giving
written notice of termination to the other party. This Agreement shall terminate
upon its expiration or upon receipt of this notice of termination by the
non-terminating party. Upon termination or expiration of this Agreement, Company
shall pay to Consultant all amounts due through the date of termination within
thirty (30) days of said date. Notwithstanding the termination of this
Agreement, Sections 2, 3 and 5 shall continue in force and effect and shall
survive any such termination. In addition, notwithstanding any termination of
this Agreement, Consultant shall be entitled to the amounts set forth in Section
2(a) with respect to any funds received by Company pursuant to the Equity Line
of Credit Agreement.
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5. MISCELLANEOUS
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a. NOTICE. All notices and other communications hereunder shall
be in writing and delivered by Federal Express or any other generally recognized
overnight delivery service, or by hand, to the appropriate party at the address
stated in the initial paragraph of this Agreement for such party or to such
other address as a party indicates in a notice to the other party delivered in
accordance with this Section.
b. SEVERABILITY. Should one or more provisions of this Agreement
be held unenforceable, for whatever cause, the validity of the remainder of this
Agreement shall remain unaffected. The parties shall, in such event, attempt in
good faith to agree on new provisions which best correspond to the object of
this Agreement.
c. ENTIRE AGREEMENT. The parties have entered into this Agreement
after negotiations and discussions, an examination of its text, and an
opportunity to consult counsel. This Agreement constitutes the entire
understanding between the parties regarding to specific subject matter covered
herein. This Agreement supersedes any and all prior written or oral contracts or
understandings between the parties hereto and neither party shall be bound by
any statements or representations made by either party not embodied in this
Agreement. No provisions herein contained shall be waived, modified or altered,
except by an instrument in writing, duly executed by the parties hereto.
d. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without giving
effect to any choice of law of conflict of law provision or rule whether such
provision or rule is that of New York or any other jurisdiction. Each party
irrevocably consents to the exclusive personal jurisdiction of New York State
courts situated in the county in which Consultant is located in New York, or the
United States District Court, or the Southern District of New York, in
connection with any action, suit or proceeding relating to or arising out of
this Agreement or any of the transactions or relationships contemplated hereby.
Each party, to the maximum extent permitted by law, hereby waives any objection
that such party may now have or hereafter have to the jurisdiction of such
courts on the basis of inconvenient forum or otherwise. Each party waives trial
by jury in any proceeding that may arise with respect to this Agreement.
e. NO IMPLIED WAIVERS. No delay or omission by either party to
exercise its rights and remedies in connection with the breach or default of the
other shall operate as or be construed as a waiver of such rights or remedies as
to any subsequent breach.
f. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, but all counterparts hereof shall together constitute but one
agreement. In proving this Agreement, it shall not be necessary to produce or
account for more than one counterpart signed by both of the parties.
g. BINDING NATURE. This Agreement shall be binding upon and shall
inure to the benefit of the successors and assigns of the respective parties to
this Agreement.
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h. CAPACITY. Company represents to Consultant that each person
signing this Agreement on its behalf has the full right and authority to do so,
and to perform its obligations under this Agreement.
i. ATTORNEYS' FEES. In the event of any litigation or other
proceeding arising out of or in connection with this Agreement, the prevailing
party or parties shall be entitled to recover its or their reasonable attorneys'
fees and court costs from the other party or parties.
j. CAPTIONS. The captions appearing in this Agreement are
inserted only as a matter of convenience and for reference and in no way define,
limit or describe the scope and intent of this Agreement or any of the
provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the Effective Date.
YORKVILLE ADVISORS XXXXXX.XX INC.
MANAGEMENT, LLC
By: By:
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Name: Xxxx X. Xxxxxx Name: Xxxxx X. Xxxxxx
Title: President Title: President/Chief Executive
Officer
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EXHIBIT A
The Company will indemnify and hold harmless the Consultant and its
affiliates and their respective directors, members, officers, agents and
employees and each other person controlling the Consultant or any of its
affiliates for any losses related to or arising out of (A) oral or written
information provided by the Company to the Consultant, the Consultant's
employees or other agents or (B) any other action or failure to act by the
Consultant, its members, officers, agents or employees or by the Consultant or
any other indemnified party at the Company's request or with the Company's
consent, or otherwise related to or arising out of the consulting services
provided or to be provided by the Consultant under this Agreement (the
"ENGAGEMENT") or any transaction or conduct in connection therewith, except that
this clause (shall not apply with respect to any losses that are finally
judicially determined to have resulted from the gross negligence or willful
misconduct of such indemnified party.
If the foregoing indemnity is unavailable to any indemnified party for any
reason, the Company will contribute to any losses related to or arising out of
the Engagement or any transaction or conduct in connection therewith as follows.
With respect to such losses referred to in the preceding paragraph, each of the
Company and the Consultant shall contribute in such proportion as is appropriate
to reflect the relative benefits received (or anticipated to be received) by the
Consultant on the one hand, and by the Company and its security holders, on the
other hand, from the actual or proposed transaction arising in connection with
the Engagement. With respect to any other losses, and for losses referred to in
the preceding paragraph if the allocation provided by the immediately preceding
sentence is unavailable for any reason, each of the Company and the Consultant
shall contribute in such proportion as is appropriate to reflect not only the
relative benefits as set forth above, but also the relative fault of each the
Company and the Consultant in connection with the actions, omissions or other
conduct that resulted in such losses, as well as any other relevant equitable
considerations. Benefits received (or anticipated to be received) by the Company
and its security holders shall be deemed to be equal to the aggregate cash
consideration and value of securities or any other property payable, issuable,
exchangeable or transferable in such transaction or proposed transaction, and
benefits received by the Consultant shall be deemed to be equal to the
compensation paid by the Company to the Consultant in connection with the
Engagement (exclusive of amounts paid for reimbursement of expenses or paid
under this Agreement). Relative fault shall be determined by reference to, among
other things, whether any alleged untrue statement of omission or any other
alleged conduct relates to information provided by the Company or other conduct
by the Company (or the Company's employees or other agents), on the one hand, or
by the Consultant, on the other hand. The parties agree that it would not be
just and equitable if contribution were determined by pro rata allocation or by
any other method of allocation that does not take account of the equitable
considerations referred to above. Notwithstanding anything to the contrary
above, in no event shall the Consultant be responsible for any amounts in excess
of the amount of the compensation actually paid by the Company to the Consultant
in connection with the Engagement (exclusive of amounts paid for reimbursement
of expenses or paid under this Agreement).
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The Company agrees that it will not, without prior written consent of the
Consultant, settle any pending or threatened claim or proceeding related to or
arising out of the Engagement or any actual or proposed transactions or other
conduct in connection therewith (whether or not the Consultant or any
indemnified party is a party to such claim or proceeding) unless such settlement
includes a provision unconditionally releasing the Consultant and each other
indemnified party from, and holding all such persons harmless against, all
liability in respect of claims by any releasing party related to or arising out
of the Engagement or any transactions or conduct in connection therewith. The
Company will also promptly reimburse each indemnified party for all expenses
(including counsel fees and expenses) as they are incurred by such indemnified
party in connection with investigating, preparing for, defending, or providing
evidence in, any pending or threatened claim or proceeding related to or arising
out of the engagement or any actual or proposed transaction or other conduct in
connection therewith or otherwise in respect of which indemnification or
contribution may be sought hereunder (whether or not the Consultant or any other
indemnified party is a party to such claim or proceeding) or in enforcing this
Agreement.
The Company further agrees that the Consultant shall not have any
liability (whether direct or indirect, in contract or tort or otherwise) to the
Company or any of the Company's affiliates, creditors or security holders for or
in connection with the Engagement or any actual or proposed transactions or
other conduct in connection therewith except for losses incurred by the Company
that are finally judicially determined to have resulted from the gross
negligence or willful misconduct of the Consultant.
The provisions set forth above shall remain in full force and effect and
shall survive the completion or termination of the Engagement.
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