CONSULTING AGREEMENT
THIS
AGREEMENT
made and
dated for reference the ___
day of
April 2005.
BETWEEN: TRADE
SHOW MARKETING COMPANY LTD
00000
-
000xx
Xxxxxx
Xxxxxx,
X.X.
Xxxxxx
X0X 0X0
(the
"Company")
OF
THE
FIRST PART
AND: FRANCHISE
101 INCORPORATED
000
Xxxxxxxxxxxx Xxxxx,
Xxxx
Xxxxxxxxx,
Xxxxxxx
Xxxxxxxx
Xxxxxx
X0X 0X0
(the
"Consultant")
OF
THE
SECOND PART
| A. |
The
Company wishes to develop a franchise model for the operation of
retail
stores providing to the general public products that have been advertised
on television as well as other ancillary and related products and
services
(the “Business”);
|
| B. |
The
Consultant is in the business of providing franchise consulting services,
and
|
| C. |
The
Company is
desirous of retaining the Consultant to provide consulting services
in
connection with the Business of the Company in
accordance with the terms and conditions of this agreement (the
“Agreement”).
|
NOW
THEREFORE THIS AGREEMENT WITNESSES
that in
consideration of the premises and mutual covenants herein contained, the parties
hereto agree as follows:
ARTICLE
ONE -- CONSULTING SERVICES
1.1 Retainer.
The
Company hereby agrees to retain the Consultant to provide the Company with
consulting services consisting of the following and such other consulting
services as the Company and the Consultant may from time to time agree upon,
(the "Services") and the Consultant hereby agrees to provide such Services
to
the Company:
| (a) |
Advise
the Company as to the best way of structuring the franchise corporate
entity in terms of regulatory acceptance, limitation of liability,
financial disclosure requirements, trademark usage, future spin-off
possibilities, and Provincial and State regulatory
requirements;
|
| (b) |
Assist
the Company with the applications for its trademarks in Canada and
the
US;
|
| (c) |
Advise
the Company on the structure and level of initial license fees, ongoing
fees, renewal fees and assignment fees, site selection criteria,
and
territorial considerations;
|
| (d) |
Provide
the Company with recommendations regarding the organizational structure
of
the franchisor;
|
| (e) |
Develop
a franchise agreement and area representative agreement which reflect
the
recommended business model and provides the strong enforceable controls
necessary to achieve a successful franchise
program;
|
| (f) |
Provide
ancillary documentation as required such as: offer to purchase/deposit
agreement, franchise application report, confidentiality/non-disclosure
agreement, sub-lease, and conditional assignment of
lease;
|
| (g) |
Draft
a disclosure document that complies with the provisions of the Alberta
Franchise Act;
|
| (h) |
Draft
a disclosure document that complies with the provisions of the Xxxxxx
Xxxxxxxx Act (Ontario);
|
| (i) |
Draft
a Uniform Offering Circular (“UFOC”) that complies with the provisions of
the Federal Trade Commission’s requirements for franchise
offerings;
|
| (j) |
Develop
a pre-opening manual and operations/ policy and procedures
manual;
|
| (k) |
Develop
a franchisee Proforma template and business plan template for potential
franchisees;
|
| (l) |
Identify
possible additional future revenue
streams;
|
| (m) |
Advise
the Company on the structure of an initial training program for new
franchisees;
|
| (n) |
Design
management information systems to evaluate the performance of the
franchisee’s particular business in relationship to other similar
franchises in the system;
|
| (o) |
Develop
materials to explain the franchise model and sell the Company’s franchise
opportunity to qualified prospects;
|
| (p) |
Prepare
the copy for a franchise opportunity section on the Company’s website, and
|
| (q) | Serve on the Company’s Advisory Board. |
1.2 Term
of Agreement.
This
Agreement shall remain in full force and effect commencing on the date first
above written subject to earlier termination as hereinafter provided.
1.3Provision
of Services.
It is
agreed and acknowledged that the Consultant may from time to time provide
services to other persons, firms and companies, provided that the Consultant
shall at no time while this Agreement remains in force provide ongoing
consultancy services to any competitor of the Company that is not an affiliate
of the Company.
1.4Board
Policy and Instructions.
The
Consultant covenants with the Company that it will act in accordance with any
policy of and carry out all reasonable instructions of the board of directors
of
the Company. The Consultant acknowledges that such policies and instructions
may
limit, restrict or remove any power or discretion, which might otherwise have
been exercised by the Consultant.
1.5Compensation.
In
consideration for the services rendered by the Consultant in 1.1 (a) to (p)
above, the Company shall pay to the Consultant consulting fees in the sum of
thirty four thousand ($34,000.00) dollars, which shall be paid as
follows:
| (a) Upon execution of this Agreement | - |
$2,000.00
|
|
April
30, 2005
|
- |
$2,250.00
|
|
May
31, 2005
|
- |
$4,250.00
|
|
June
30, 2005
|
- |
$4,250.00
|
|
July
31, 2005
|
- |
$4,250.00
|
|
(b)
|
On
April 30, 2005, the balance of seventeen thousand ($17,000.00) dollars
shall be paid by the Company issuing to the Consultant the equivalent
value in the Company’s common stock, which trades on the NASD OTC BB
exchange, based on the closing trade value of such shares on April
30,
2005.
|
|
(c)
|
In
consideration for the services rendered by the Consultant in 1.1
(q)
above, the Company shall irrevocably grant to the Consultant a
non-assignable, non-transferable option to purchase fifty thousand
(50,000) shares in the capital stock of the Company at a price of
US$0.50
per share.
|
Note:
Compensation does not include any costs associated with graphic design, website
development, printing of manuals, trademark applications or trademark
registrations.
ARTICLE
TWO - CONFIDENTIALITY AND NON-COMPETITION
2.1 Confidential
Information.
The
Consultant covenants and agrees that it shall not disclose to anyone any
confidential information with respect to the business or affairs of the Company
except as may be necessary or desirable to further the business interests of
the
Company. This obligation shall survive the expiry or termination of this
Agreement.
2.2 Return
of Property.
Upon
expiry or termination of this Agreement the Consultant shall return to the
Company any property, documentation, or confidential information which is the
property of the Company.
2.3 Promotion
of Company's Interests.
The
Consultant agrees to perform the services contemplated by this Agreement to
the
best of the Consultant’s abilities.
ARTICLE
THREE - TERMINATION
3.1 Termination
of Agreement.
This
Agreement will, subject to the provisions of this Agreement, be deemed to be
terminated immediately for cause.
3.2 Definition
of Cause.
For the
purposes of this Agreement, “cause” means: (i) the Consultant breaches its
obligations under article 3 of this Agreement; or (ii) the existence of cause
for termination of this Agreement at common law resulting from any recognized
ground of termination for cause, including but not limited to fraud, dishonesty,
illegality, breach of statute or regulation, conflict of interest, or gross
incompetence; or (iii) if the Consultant breaches any other obligation under
this Agreement and fails to rectify such breach upon provision of written notice
to do so by the Company.
3.3 Compensation
for Cause.
In the
event of a termination for cause, the Consultant will receive payment of any
consulting fees earned to the date of termination.
ARTICLE
FOUR - CAPACITY
4.1 Capacity
of Consultant. It
is
acknowledged by the parties hereto that the Consultant is being retained by
the
Company in the capacity of independent contractor and not as an employee of
the
Company. The Consultant and the Company acknowledge and agree that this
Agreement does not create a partnership or joint venture between
them.
ARTICLE
FIVE - GENERAL CONTRACT PROVISIONS
5.1 Severability.
If any
provision herein is determined to be invalid or unenforceable by a court of
competent jurisdiction from which no further appeal lies or is taken, that
provision shall be deemed to be severed herefrom, and the remaining provisions
herein shall not be affected thereby and shall remain valid and
enforceable.
5.2 Further
Assurances.
The
parties shall deliver to each other such further documentation and shall perform
such further acts as and when the same may be required to carry out and give
effect to the terms and intent of this Agreement.
5.3 Time
of the Essence.
Time
shall be of the essence of this Agreement and of every part hereof and no
extension or variation of this Agreement shall operate as a waiver of this
provision.
5.4 Prompt
Review of Information.
The
principals of the Company will be available and will perform a prompt review
of
any information that is pertinent to the timely completion of this Agreement.
5.5 Entire
Agreement.
This
Agreement contains the entire agreement among the parties pertaining to the
subject matter hereof, and supersedes and replaces all previous written and
oral
agreements among the parties with respect to the subject matter
hereof.
5.6 Enurement.
This
Agreement shall enure to the benefit of and be binding upon the parties and
their respective legal personal representatives, heirs, executors,
administrators or successors.
5.7 Assignment.
This
Agreement is not assignable by either party without the prior written consent
of
the other party.
5.8 Currency.
Unless
otherwise provided for herein, all monetary amounts referred to herein shall
refer to the lawful money of Canada.
5.9 Headings
for Convenience Only.
The
division of this Agreement into articles and sections is for convenience of
reference only and shall not affect the interpretation or construction of this
Agreement.
5.10 Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
Province of British Columbia and the federal laws of Canada applicable therein
and each of the parties hereto agrees irrevocably to conform to the
non-exclusive jurisdiction of the Courts of such Province.
IN
WITNESS WHEREOF
the
parties have duly executed this Consulting Agreement as of the date set out
on
the first page of this Agreement.
TRADE
SHOW MARKETING COMPANY
_________________________________________
Authorized
Signatory
FRANCHISE
101 INCORPORATED
_________________________________________
Authorized
Signatory
