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CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (the "Agreement") is made this 7th day of
March 2000, by and between A-Z Professional Consultants, Inc., a Utah
corporation ("Advisor") and Nova Pharmaceutical, Inc., a Nevada
Corporation with it offices located in Lake Elsinore, California (the
"Company").
WHEREAS, Advisor and Advisor's Personnel (as defined below) have
experience in evaluating and effecting mergers and acquisitions,
advising corporate management, and in performing general administrative
duties for publicly-held companies and development stage investment
ventures; and
WHEREAS, the Company desires to retain Advisor to advise and assist the
Company in its development on the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged, the Company and Advisor agree as follows:
1. Engagement
The Company hereby retains Advisor, effective as of the
date hereof (the "Effective Date") and continuing until
termination, as provided herein, to assist the Company in
its effecting the purchase of businesses and assets
relative to its business and growth strategy, acquisition
of a publicly reporting shell, acquiring trading status
for its common stock, general business and financial
issues consulting, the introduction of the Company to
public relations firms and consultants and others that may
assist the Company in its plans and future (the
"Services"). The Services are to be provided on a "best
efforts" basis directly and through Advisor's officers or
others employed or retained and under the direction of
Advisor ("Advisor's Personnel"); provided, however, that
the Services shall expressly exclude all legal advice,
accounting services or other services which require
licenses or certification which Advisor may not have.
2. Term
This Agreement shall have an initial term of twelve (12)
months (the "Primary Term"), commencing with the Effective
Date. At the conclusion of the Primary Term, this
Agreement will automatically be extended for the same term
(the "Extension Period") unless Advisor or the Company
shall serve written notice on the other party terminating
the Agreement. Any notice to terminate given hereunder
shall be in writing and shall be delivered at least thirty
(30) days prior to the end of the Primary Term or any
subsequent Extension Period.
3. Time and Effort of Advisor
Advisor shall allocate time and Advisor's Personnel, as it
deems necessary, to provide the Services. The particular
amount of time may vary from day to day or week to week.
Except as otherwise agreed, Advisor's monthly statement
identifying, in general, tasks performed for the Company
shall be conclusive evidence that the Services have been
performed. Additionally, in the absence of willful
misfeasance, bad faith, negligence or reckless disregard
for the obligations or duties hereunder by Advisor,
neither Advisor nor Advisor's Personnel shall be liable to
the Company or any of its shareholders for any act or
omission in the course of or connected with rendering the
Services, including but not limited to losses that may be
sustained in any corporate act in any subsequent Business
Opportunity (as defined herein) undertaken by the Company
as a result of advice provided by Advisor or Advisor's
Personnel.
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4. Compensation
The Company agrees to pay Advisor a fee for the Services
("Advisory Fee") by way of the delivery by the Company of
One Million Two Hundred Seventy Thousand (1,270,000)
shares of the Company's common stock as an initial fee,
Seventy Five Thousand (75,000) of these shares shall bear
no restriction, a total of Four Hundred Twenty Three
Thousand Three Hundred Thirty Three (423,333) shares
(75,000 without restriction and the balance restricted)
shall be delivered within seven (7) days after the
execution hereof, 423,333 shares three months later and
the balance six months after the execution hereof.
5. Other Services
If the Company enters into a merger or exchanges
securities with, or purchases the assets or enters into a
joint venture with, or makes an investment in a company
introduced by Advisor (a "Business Opportunity"), the
Company agrees to pay Advisor a fee equal to ten percent
(10%) of the value of each Business Opportunity introduced
by Advisor and acquired or otherwise participated in by
the Company (collectively referred to herein, in each
instance, as the "Transaction Fee"), which shall be
payable immediately following the closing of each such
transaction in restricted shares of the Company's common
stock or in kind if an acquisition is made at the
Company's option. If paid in cash, the Transaction Fee
shall be reduced to five percent (5%).
6. Registration of Shares
Company agrees that any shares issued to satisfy a
Transaction Fee may be registered by the Company with the
Securities and Exchange Commission under any subsequent
applicable registration statement filed by the Company at
the Company's discretion. Such issuance or reservation of
shares shall be in reliance on representations and
warranties of Advisor set forth herein.
7. Costs and Expenses
All third party and out-of-pocket expenses incurred by
Advisor in the performance of the Services or for the
settlement of debts shall be paid by the Company, or
Advisor shall be reimbursed if paid by Advisor on behalf
of the Company, within ten (10) days of receipt of written
notice by Consultant, provided that the Company must
approve in advance all such expenses in excess of $500 per
month.
8. Place of Services
The Services provided by Advisor or Advisor's Personnel
hereunder will be performed at Advisor's offices except as
otherwise mutually agreed by Advisor and the Company.
9. Independent Contractor
Advisor and Advisor's Personnel will act as an independent
contractor in the performance of its duties under this
Agreement. Accordingly, Advisor will be responsible for
payment of all federal, state, and local taxes on
compensation paid under this Agreement, including income
and social security taxes, unemployment insurance, and any
other taxes due relative to Advisor's Personnel, and any
and all business license fees as may be required. This
Agreement neither expressly nor impliedly creates a
relationship of principal and agent, or employee and
employer, between Advisor's Personnel and the Company.
Neither Advisor nor Advisor's Personnel is authorized to
enter into any agreements on behalf of the Company. The
Company expressly retains the right to approve, in its
sole discretion, each Asset Opportunity or Business
Opportunity introduced by Advisor, and to make all final
decisions with respect to effecting a transaction on any
Business Opportunity.
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10. Rejected Asset Opportunity or Business Opportunity
If, during the Primary Term of this Agreement or any
Extension Period, the Company elects not to proceed to
acquire, participate or invest in any Business opportunity
identified and/or selected by Advisor, notwithstanding the
time and expense the Company may have incurred reviewing
such transaction, such Business Opportunity shall revert
back to and become proprietary to Advisor, and Advisor
shall be entitled to acquire or broker the sale or
investment in such rejected Business Opportunity for its
own account, or submit such assets or Business Opportunity
elsewhere. In such event, Advisor shall be entitled to
any and all profits or fees resulting from Advisor's
purchase, referral or placement of any such rejected
Business opportunity, or the Company's subsequent purchase
or financing with such Business Opportunity in
circumvention of Advisor.
11. No Agency Express or Implied
This Agreement neither expressly nor impliedly creates a
relationship of principal and agent between the Company
and Advisor, or employee and employer as between Advisor's
Personnel and the Company.
12. Termination
The Company and Advisor may terminate this Agreement prior
to the expiration of the Primary Term upon thirty (30)
days written notice with mutual written consent. Failing
to have mutual consent, without prejudice to any other
remedy to which the terminating party may be entitled, if
any, either party may terminate this Agreement with thirty
(30) day written notice under the following conditions:
A. By the Company
(i) If during the Primary Term of this
Agreement or any Extension Period, Advisor is
unable to provide the Services as set forth
herein for thirty (30) consecutive business days
because of illness, accident, or other
incapacity of Advisor's Personnel; or,
(ii) If Advisor willfully breaches or neglects
the duties required to be performed hereunder;
or,
(iii) At Company's option without cause upon
30-days written notice to Advisor; or
B. By Advisor
(i)If the Company breaches this Agreement or
fails to make any payments or provide
information required hereunder; or,
(ii)If the Company ceases business or, other
than in an Initial Merger, sells a controlling
interest to a third party, or agrees to a
consolidation or merger of itself with or into
another corporation, or enters into such a
transaction outside of the scope of this
Agreement, or sells substantially all of its
assets to another corporation, entity or
individual outside of the scope of this
Agreement; or
(iii) If the Company subsequent to the
execution hereof has a receiver appointed for
its business or assets, or otherwise becomes
insolvent or unable to timely satisfy its
obligations in the ordinary course of, including
but not limited to the obligation to pay the
Initial Fee, the Transaction Fee, or the
Advisory Fee; or,
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(iv) If the company subsequent to the
execution hereof institutes, makes a general
assignment for the benefit of creditors, has
instituted against it any bankruptcy proceeding
for reorganization for rearrangement of its
financial affairs, files a petition in a court
of bankruptcy, or is adjudicated a bankrupt; or,
(v) If any of the disclosures made herein or
subsequent hereto by the Company to Consultant
are deemed materially false or misleading.
In the event Advisor elects to terminate without cause or
this Agreement is terminated prior to the expiration of
the Primary Term or any Extension Period by mutual written
agreement, or by the Company for the reasons set forth in
A(i) and (ii) above, the Company shall only be responsible
to pay Advisor for unreimbursed expenses, Advisory Fee and
Transaction Fee accrued up to and including the effective
date of termination. If this Agreement is terminated by
the Company for any other reason, or by Advisor for
reasons set forth in B(i) through (v) above, Advisor shall
be entitled to any outstanding unpaid portion of
reimbursable expenses, Transaction Fee, if any, and for
the remainder of the unexpired portion of the applicable
term (Primary Term or Extension Period) of the Agreement.
13. Indemnification
Subject to the provisions herein, the Company and Advisor
agree to indemnify, defend and hold each other harmless
from and against all demands, claims, actions, losses,
damages, liabilities, costs and expenses, including
without limitation, interest, penalties and attorneys'
fees and expenses asserted against or imposed or incurred
by either party be reason of or resulting from any action
or a breach of any representation, warranty, covenant,
condition, or agreement of the other party to this
Agreement.
14. Remedies
Advisor and the Company acknowledge that in the event of a
breach of this Agreement by either party, money damages
would be inadequate and the non-breaching party would have
no adequate remedy at law. Accordingly, in the event of
any controversy concerning the rights or obligations under
this Agreement, such rights or obligations shall be
enforceable in a court of equity by a decree of specific
performance. Such remedy, however, shall be cumulative
and nonexclusive and shall be in addition to any other
remedy to which the parties may be entitled.
15. Miscellaneous
A. Subsequent Events: Advisor and the Company each
agree to notify the other party if, subsequent to the date
of this Agreement, either party incurs obligations, which
could compromise its efforts and obligations under this
Agreement.
B. Amendment: This Agreement may be amended or modified
at any time and in any manner only be an instrument in
writing executed by the parties hereto.
C. Further Actions and Assurances: At any time and from
time to time, each party agrees, at its or their expense,
to take actions and to execute and deliver documents as
may be reasonably necessary to effectuate the purpose of
this Agreement.
D. Waiver: Any failure of any party to this Agreement
to comply with any of its obligations, agreements, or
conditions hereunder may be waived in writing by the party
to whom such compliance is owed. The failure of any party
to this Agreement to enforce at any time any of the
provisions of this Agreement shall in no way be construed
to be a waiver of any such provision or a waiver of the
right of such party thereafter to enforce each and every
such provision. No waiver of any breach of or
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noncompliance with this Agreement shall be held to be a
waiver of any other or subsequent breach or noncompliance.
E. Assignment: Neither this Agreement nor any right
created by it shall be assignable by either party without
the prior written consent of the other.
F. Notices: Any notice or other communication required
or permitted by this Agreement must be in writing and
shall be deemed to be properly given when delivered in
person to an officer of the other party, when deposited in
the United States mails for transmittal by certified or
registered mail, postage prepaid, or when deposited with a
public telegraph company for transmittal, or when sent by
facsimile transmission charges prepared, provided that the
communication is addressed:
(i) In the case of the Company:
Nova Pharmaceutical, Inc.
00000 Xxxxxx Xxxxx, Xxx. 0-X
Xxxx Xxxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Telefax: (000) 000-0000
Attention: Xxx Xxxxxxxx, CFO
(ii) In the case of
Advisor:A-Z Professional Consultants, Inc.
000 Xxxx 000 Xxxxx, Xxx. 000
Xxxx Xxxx Xxxx, Xxxx 00000
Telephone: (000) 000-0000
Telefax: (000) 000-0000
Attention: XxxxxxXxxx X. Xxxxxxxx, President
or to such other person or address designated in writing
by the company or Advisor to receive notice.
A. Headings: The section and subsection headings in
this Agreement are inserted for convenience only and shall
not affect in any way the meaning or interpretation of
this Agreement
B. Governing Law: This Agreement was negotiated and is
being contracted for and in Utah, and shall be governed by
the laws of the State of Utah, and the United States of
America, notwithstanding any conflict-of-law provision to
the contrary.
C. Binding Effect: This Agreement shall be binding upon
the parties hereto and inure to the benefit of the
parties, their respective heirs, administrators,
executors, successors, and assigns.
D. Entire Agreement: This Agreement contains the entire
agreement between the parties hereto and supersedes any
and all prior agreements, arrangements, or understandings
between the parties relating to the subject matter of this
Agreement. No oral understandings, statements, promises,
or inducements contrary to the terms of this Agreement
exist. No representations, warranties, covenants, or
conditions, express or implied, other than as set forth
herein, have been made by any party.
E. Severability: If any part of this Agreement is
deemed unenforceable, the balance of the Agreement shall
remain in full force and effect.
F. Counterparts: A facsimile, telecopy, or other
reproduction of this Agreement may be executed
simultaneously in two or more counterparts, each of which
shall be deemed an original, but all of which together
shall constitute one and the same instrument, by one or
more parties hereto and such executed copy may be
delivered by facsimile or similar instantaneous electronic
transmission device pursuant to which the signature of or
on behalf of such party can be seen. In this event, such
execution and delivery shall be considered valid, binding
and effective for all purposes. At the request of any
party hereto, all parties agree to execute an original of
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this Agreement as well as any facsimile, telecopy or other
reproduction hereof.
G. Time is of the Essence: Time is of the essence of
this Agreement and of each and every provision hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date above written
The "Company" "Advisor"
Nova Pharmaceutical, Inc. A-Z Professional Consultants, Inc.
A Nevada Corporation A Utah Corporation
By: By:
Xxxxx Xxxx XxxxxxXxxx X. Xxxxxxxx
President President
