Consulting Agreement
This Consulting Agreement ("Agreement") is dated for reference this 2nd
day of January 2002 between Network Lifestyle Radio Corp., a Delaware
corporation ("NLR") Interfair Aktiengesellschaft, a Liechenstein corporation
(the "Consultant").
WHEREAS:
NLR and its subsidiary corporations are in the business of selling on a
retail basis, health and wellness products using a direct marketing network of
sales representatives;
The Consultant has the knowledge and experience in retail marketing and
development of direct marketing networks, including establishing distribution
and direct marketing networks; developing regulatory compliance strategies for
direct marketing networks; developing strategies for marketing, packaging
and licensing health and wellness products; developing strategic procurement
and licensing arrangements with manufacturers of health and wellness products;
assisting in developing product rollout and market penetration strategies; and
developing and implementing business strategies for conducting business
outside of North America and in particular, in Europe; and
NLR wishes to retain the Consultant and Consultant desires to provide
consulting services on the terms and conditions of this Agreement.
NOW THEREFORE, in consideration of the mutual covenants and agreements
contained in this Agreement and other good and valuable consideration, the
receipt and sufficiency of which is acknowledged, the parties agree as
follows:
Engagement
Engagement: NLR hereby retains the Consultant and the Consultant accepts
such retainer and agrees to perform services for NLR, for the period and upon
the terms and conditions in this Agreement.
Term of Service: The Consultant shall provide services to NLR for a term
of five (5) years from the date of this Agreement (the "Term of Service").
Services to be Provided: The Consultant shall provide general business
development services, including but not limited to, the following (the
"Consulting Services"):
(a) organizing the recruitment, training and general
development of NLR's direct marketing sales force and network;
(b) assisting in the development of an over-all business
strategy to generate a direct marketing sales force on a worldwide basis in
compliance with domestic and foreign laws and regulatory requirements;
(c) developing a strategic marketing and product rollout
strategy on a worldwide basis;
(d) developing strategic business relationships on a
partnership, joint venture or other basis with health and wellness product
manufacturers and suppliers in North America, Europe and the Pacific Rim;
(e) assist in developing corporate sales policies and
procedures in compliance with domestic and foreign laws and regulatory
requirements;
(f) assist in developing product procurement policies and
administration of a product labeling, packaging and licensing program in
compliance with domestic and foreign laws;
(g) assist in the recruitment of executive management for
worldwide sales network, including establishing regional offices and
distribution centers; and
(h) providing strategic advice as may be reasonably be
requested by NLR's board of directors.
During the Term of Service, Consultant shall provide the Consulting
Services for the exclusive benefit of NLR.
During the Term of Service, Consultant shall meet from time to time to
discuss the planning and progress of the Consulting Services and provide NLR
with a report on the progress of the Consulting Services.
Consultant, throughout the Term of Service, shall make available to the
NLR copies of all data and other information generated by or on behalf of NLR
pursuant to this Agreement including, without limitation, all information
obtained as a result of studies or research conducted in the course of
providing the Consulting Services and copies of all procedures and policies
developed under the Consulting Services in sufficient written detail to permit
the NLR's personnel to employ such procedures in development of its business
and strategies.
All Consulting Services shall be carried out in strict compliance with any
applicable federal, state, or local laws, regulations or guidelines governing
the conduct of such services.
NLR shall have sole and exclusive ownership rights to any work product,
device, process, or method, whether patentable or unpatentable, arising out of
the Consulting Services.
Payment to Consultant
NLR's Realization of Benefit of Consultant's Services: Notwithstanding
the Term of Service of this Agreement, the parties acknowledge to and agree
with each other that the financial benefit to NLR from the Consultant's
services will be realized by NLR over a period of years that exceeds the Term
of Service and as a result, the parties agree hereto to a payment for services
to be rendered by the Consultant to be based on a percentage of NLR's Gross
Profit for ten (10) years from the date of this Agreement (the "Payment
Term").
Payment to Consultant: NLR shall pay to the Consultant, for services
rendered, a fee equal to 2% of NLR's Gross Profit for a period of ten (10)
years from the date of this Agreement.
Calculation of Gross Profit: For the purposes of this Agreement, the
parties hereto agree that "Gross Profit" means the gross profit of the
Company's businesses calculated, on a consolidated basis in United States
dollars and in accordance with generally accepted accounting principles of the
United States, as revenue derived from the sales of NLR's products and
services, including all revenue generated through radio, television and
internet broadcasts, less direct product, procurement and freight costs.
Timing of Payment to Consultant: NLR shall pay the Consultant on a
quarterly basis with payments to be made on the 15th of the month following
the quarter in which NLR generates Gross Profit (the "Quarterly Payment").
Method of Payment to Consultant: The Consultant shall provide to NLR
written wire transfer instructions, which may change from time to time, and
NLR shall wire all Quarterly Payments to the Consultant in accordance with
such wire transfer instructions and in the currency of the United States of
America.
Payment Adjustments
Audit Requirement: NLR shall provide the Consultant with audited
consolidated financial statements on an annual basis to be delivered to the
Consultant on or before 140 days from NLR's fiscal year end (the "Annual
Financial Statements") in addition to financial statements of all affiliated
corporations, partnerships and joint ventures (the "Other Financial
Statements").
Annual Payment Adjustment: Concurrent with the delivery of the Annual
Financial Statements and the Other Financial Statements, NLR shall deliver to
the Consultant a statement, certified by the President and Chief Financial
Officer of NLR as to its accuracy, which reconciles the Annual Financial
Statements' presentation of operating revenue and costs with the calculation
of Gross Profit for the Quarterly payments for the year represented in the
Annual Financial Statements.
Excess Quarterly Payments: If the total Quarterly Payments for the fiscal
year exceed the percentage of Gross Profit that was due to the Consultant from
NLR in that fiscal year, then the Consultant shall within ten (10) business
days of receiving the reconciliation, deliver by wire transfer the amount of
such excess to NLR.
Deficient Quarterly Payments: If the total Quarterly Payments for the
fiscal year are deficient to the percentage of Gross Profit that was due to
the Consultant from NLR in that fiscal year, then NLR shall within two (2)
business days deliver by wire transfer the amount of such deficiency to the
Consultant.
Representations and Covenants of the Consultant:
The Consultant represents and covenants to NLR as follows and acknowledges
that NLR is relying on such representations and covenants in connection with
entering into this agreement:
The Consultant will assign qualified personnel to provide services in
a professional manner and on a timely basis;
The Consultant is or will be authorized and licensed under all
applicable law to conduct all activities contemplated under this Agreement
both now and in the future;
The Consultant has sufficient knowledge, skills and expertise to
insure that the Consulting Services and the policies and procedures created
for NLR will comply with all applicable laws, regulations and standards of any
jurisdiction in which the Consulting Services relate;
The Consultant is a validly existing entity in good standing under
the laws of Leichenstein and has the authority to enter into this Agreement;
and
The execution, delivery and performance by the Consultant of this
Agreement does not and will not contravene or conflict with any provision of
any agreement, law, regulation, judgement, injunction, order or decree binding
upon the Consultant.
General Indemnification
Claim: If any person shall make any claim or demand against NLR which
gives rise or may give rise to any claim by NLR against the Consultant for any
breach of representation, covenant or other agreement or obligation of the
Consultant pursuant to this Agreement (the "Claim"), NLR shall promptly notify
the Consultant, giving the general nature of such Claim along with such
further information known to NLR as may be reasonably required to enable the
Consultant, as the case may be, to decide whether or not to assume the defence
thereof. NLR shall not be under any liability or obligation to the Consultant
for any failure to so notify them or for the sufficiency of the notice unless
and then only to the extent that the rights and remedies of the Consultant
shall have been prejudiced as a result. The Consultant shall be entitled (but
not required) to assume the defence in the name of NLR of any suit brought
against NLR to enforce such claim or demand and to assert any counterclaim of
NLR if, but only if, NLR shall be entitled to make a Claim for the full amount
of the claim or demand, and if the defence shall be through legal counsel
acceptable to NLR, acting reasonably. Consultant shall indemnify and save
harmless NLR of and from all costs and expenses incurred or to be incurred in
connection with such defence. Such right shall be subject to the rights of any
insurer to defend any action. In all cases, NLR shall have the right to retain
at its own expense, additional counsel to act on its behalf. The Consultant
shall not settle or (without giving NLR a reasonable opportunity to take
carriage thereof) abandon any such claim or demand which it has elected to
defend unless they have first unconditionally acknowledged to NLR that they
will pay to NLR the full amount of such claim or demand. The Consultant shall
keep NLR reasonably informed as to the progress thereof. NLR shall at all
times cooperate in all reasonable ways with, make all its relevant files and
records and those of NLR available for inspection and copying by, and make its
employees and those of NLR reasonably available or otherwise render reasonable
assistance to, the Consultant (i) in the defence of any claim or demand for
which indemnity is sought hereunder and (ii) in any action brought by the
Consultant to assert any related claim, counterclaim or right of subrogation
under paragraph 20 hereof. No claim or demand may be settled or compromised
by NLR without the written consent of the Consultant, such consent not to be
unreasonably withheld.
Subrogation: The Consultant shall be subrogated to the claims and rights
of NLR as against other persons, and shall be entitled to contribution from
any such person, with respect to any Claim paid by the Consultant under this
paragraph 20, but only after NLR shall have received payment in full of its
Claim with interest.
Insurance: The Consultant shall not be liable to NLR with respect to any
liability of NLR if and to the extent that:
(a) NLR would have been insured against such liability under
the insurance coverage maintained by NLR, as the case may be, prior to the
Closing; and
(b) NLR are not insured against such liability at the time the
liability arises.
NLR shall take all steps necessary to make claims under NLR
insurance policies with respect to any liability of NLR which could be the
subject of any Claim and the Consultant shall not be liable to NLR with
respect to any Claim to the extent that they have been prejudiced by a failure
to make such claim. Nothing in this paragraph 18 shall effect any rights of
subrogation. No Liability: The Consultant will have no liability (for
indemnification or otherwise) with respect to any representation or warranty,
or covenant or obligation to be performed and complied with unless on
or before the seventh anniversary from the date hereof, NLR notifies the
Consultant of a Claim pursuant to paragraph 16 above.
Independent Consultant
Independent Consultant: Nothing in this Agreement shall be construed to
place the Consultants and NLR or any of its subsidiaries or affiliates in the
relationship of partners, joint ventures or employment. Neither the
Consultant nor NLR shall represent itself as the agent or legal representative
of the other for any purpose whatsoever, no shall either have the power to
obligate or bind the other in any manner whatsoever. The Consultant shall at
all times be an independent contractor to NLR.
Taxes and Applicable Fees: The Consultant shall be solely responsible for
the payment of any state, provincial, federal or other taxes on payment by NLR
of the Quarterly Payments and shall indemnify and save harmless NLR of any and
all such claims made by a taxing authority in connection with the payment of
Quarterly Payments. For certainty, however, the Consultant is not responsible
and will not indemnify NLR or its subsidiaries or affiliates if such claim by
a taxing authority is in connection with the Quarterly Payments as it may
affect NLR's or any of its subsidiaries' or affiliates' income tax or value
added tax as it may apply to the Quarterly Payment.
Confidentiality
General Confidentiality: During the Payment Term and for a period of two
(2) years thereafter (the "Restricted Period"), the Consultant shall keep
secret and retain in strictest confidence, and shall no use for its benefit or
the benefit of others, except in connection with the business and affairs of
NLR, all confidential matters relating to NLR and it business learned be the
Consultant heretofore or hereafter directly or indirectly from NLR, including
without limitation, any information concerning the business, affairs,
customers, clients, sources of supply and customer lists of NLR (the
"Confidential Information"). During the Restricted Period, the Consultant
shall not disclose any Confidential Information to anyone except with NLR's
written consent. For the purposes of this Agreement, the term "Confidential
Information" shall not include information that Is at the time of receipt
publicly know, or thereafter becomes publicly know, through no wrongful act of
the Consultant or is receive from a third party not under an obligation to
keep such information confidential and without breach of this Agreement.
Additional Restrictions During the Restricted Period, the Consultant shall
not, without NLR's written consent, directly or indirectly, knowingly solicit
or encourage to leave the employment of NLR, any employee of NLR or hire any
employee who has left the employment of NLR within one (1) year of the
termination of such employee's employment with NLR.
General Provisions
Termination of Agreement: This Agreement will terminate at the earlier of
the following events:
The appointment of a trustee in bankruptcy to either party to this
Agreement;
On the first day that is twenty four (24) months from the date that
the last sale of health and wellness products and services were sold by NLR,
its subsidiaries, or affiliates;
Sixty days after a written notice of a material breach of this
Agreement to the breaching party, which the breach is uncured, or, The day
that is ten (10) years from the date first written above.
Notices: Any notice or other communication required or permitted to be
given hereunder shall be in writing and delivered or sent by overnight mail,
overnight delivery or telefax and, if telefaxed, shall be deemed to have been
received on the next Business Day following transmittal and acknowledgment
of receipt by the recipient's telefax machine or if delivered by hand shall be
deemed to have been received at the time it is delivered. Notices addressed to
an individual shall be validly given if left on the premises indicated below.
Notice of change of address shall also be governed by this paragraph 28.
Notices shall be delivered or addressed as follows:
(a) If to NLR:
Network Lifestyle Radio Corp.
0000-0000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX X0X 0X0
Fax: 000-000-0000
With a copy to:
Xxxxxx & Xxxxxxx LLP
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxxxx 00000
Fax: 000-000-0000
Attention: Mr. Xxxxxxx Xxx, Esq.
(b) If to the Consultant:
Interfair Aktiengessellschaft
Poststrausse 233
9491 Ruggell
Liechtenstein
Fax: 000-000-0000
Attention: Xx. Xxxxxxxxx Xxxxxxxxx Xx.
Any party may give written notice of change of address in the same
manner, in which event such notice shall thereafter be given to it as above
provided at such changed address.
Successors and Assigns: This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors, assigns,
receivers, trustees and administrators as the case may be.
Governing Law and Arbitration This Agreement shall be governed by and
construed in accordance with the laws of Germany. Any dispute arising out of
or in connection with this Agreement, including any question regarding its
existence, validity or termination, shall be referred to and finally resolved
by arbitration under the rules of the International Arbitration in Paris,
France which rules are deemed to be incorporated by reference into this
clause. The number of arbitrators shall be one. The place of arbitration shall
be Geneva, Switzerland. The language of arbitration shall be English. The
parties expressly waive and forego any right to punitive, exemplary or other
similar damages unless an applicable statute requires the award of such
damages or that compensatory damages be increased in a specified manner. This
provision is not intended to apply to any award of arbitration costs to a
party to compensate for dilatory or bad faith conduct in the arbitration
pursuant to this paragraph. The prevailing parties shall also be entitled to
an award of reasonable attorney's fees. Entire Agreement: Except as may be
otherwise expressly agreed between the parties in writing, this Agreement and
the Schedules hereto constitute the entire agreement between the parties
pertaining to the subject matter and there are no oral statements, warranties,
representations or other agreements between the parties in connection with the
subject matter except as specifically set forth or referred to herein. No
amendment, waiver or termination of this Agreement shall be binding unless
executed in writing by the party or parties to be bound thereby. No waiver of
any provision of this Agreement shall be deemed or shall constitute a waiver
of any other provision nor shall any such waiver constitute a continuing
waiver unless otherwise expressly provided.
Assignment: Neither party shall assign their interests in this Agreement
without prior written consent of the other party.
Expenses: All costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby, including the Consulting
Services, shall be paid by the party incurring such expense. The Consultant
shall not bear any legal, accounting or other costs incurred by NLR.
Time of the Essence: Time shall be of the essence of this Agreement.
Severability: If any covenant, obligation or agreement of this Agreement,
or the application thereof to any person or circumstance shall, to any extent,
be invalid or unenforceable, the remainder of this Agreement or the
application of such covenant, obligation or agreement to persons or
circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby and each covenant, obligation and
agreement of this Agreement shall be separately valid and enforceable to the
fullest extent permitted by the law.
Counterparts: This Agreement may be executed in any number of
counterparts, each of which when delivered shall be deemed to be an original
and all of which together shall constitute one and the same document. A
signed facsimile or telecopied copy of this Agreement shall be effectual and
valid proof of execution and delivery.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of
the date first hereinabove written.
NETWORK LIFESTYLE RADIO CORP.
Per: /s/ Xxxxxxx X. Xxxxxxx
----------------------
Xxxxxxx X. Xxxxxxx, President and Director
INTERFAIR AKTIENGESSELLSCHAFT
Per: /s/ Xxxxxxxxx Xxxxxxxxx, Xx.
----------------------------
Xxxxxxxxx Xxxxxxxxx, Xx., Director
