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Exhibit 10.1
CONSULTING AGREEMENT
This Consulting Agreement (the "Agreement"), agreed to and effective as of
April 1, 2000 is entered into by and between XXXXXXXX.xxx, Inc., a Delaware
corporation (herein referred to as the "Company") and THE DEL MAR CONSULTING
GROUP, INC., a California corporation (herein referred to as the "Consultant").
RECITALS
WHEREAS, Company is a public Company with its common stock trading on
the Over The Counter Electronic Bulletin Board in the United States; and
WHEREAS, Consultant has experience in the area of corporate finance,
investor communications and financial and investor public relations; and
WHEREAS, Company desires to engage the services of Consultant to assist
and consult with the Company in matters concerning corporate finance and to
represent the company in investors' communications and public relations with
existing shareholders, brokers, dealers and other investment professionals as to
the Company's current and proposed activities;
NOW THEREFORE, in consideration of the promises and the mutual
covenants and agreements hereinafter set forth, the parties hereto covenant and
agree as follows:
1. TERM OF CONSULTANCY. Company hereby agrees to retain the Consultant to act in
a consulting capacity to the Company, and the Consultant hereby agrees to
provide services to the Company commencing immediately and ending on June 30,
2001.
2. DUTIES OF CONSULTANT. The Consultant agrees that it will generally provide
the following specified consulting services through its officers and employees
during the term specified in Section 1.
(a) Consultant and assist the Company in developing and implementing
appropriate plans and materials for presenting the Company and its business
plant, strategy and personnel to the financial and investment community,
establishing an image for the Company in the financial and investment community,
and creating the foundation for subsequent financial and investment community;
(b) Introduce the Company to the financial and investment community;
(c) With the cooperation of the Company, maintain an awareness in the
financial and investment community during the term of this Agreement of the
Company's plans, strategy and personnel, as they my evolve during such period,
and consult and assist the Company in Communicating appropriate information
regarding such plans, strategy and personnel to the financial and investment
community;
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(d) Consult and advice the Company with respect to its (i) stockholder
and investor relations, (ii) relations with brokers, dealers, analysis and other
investment professionals, and (iii) financial and media public relations
generally;
(e) Perform the functions generally assigned to investor/stockholder
relations and public relations departments in major corporations, including
responding to telephone and written inquiries (which may be referred to the
Consultant by the Company); assisting in the preparation of press releases for
the Company with the Consultant by the Company); assisting in the preparation of
press releases for the Company with the Company's involvement and approval or
reviewing press releases, reports and other communications with or to
shareholders, the investment community and the general public; consulting with
respect to the time, form, distribution and other matters related to such
releases, reports and communications; and consulting with respect to corporate
symbols, logos, names, the presentation of such symbols, logos and names, and
other matters relating to corporate image;
(f) Upon the Company's approval, disseminate information regarding the
Company to shareholders, brokers, dealers, other financial and investment
community professionals and the general investing public;
(g) Upon the Company's approval, conduct meetings, in person or by
telephone, with brokers, dealers, analysts and financial and investment
professionals to advice them of the Company's plans, goals and activities, and
assist the Company in preparing for press conference and other forms involving
the media, investment professionals and the general investment public;
(h) At the Company's request, review business plans, strategics,
mission statements budgets, proposed transactions and other plans for the
purpose of consulting with the Company of the financial and investment community
implications thereof; and,
(i) Otherwise perform as the Company's financial relations and public
relations consultant.
3. ALLOCATION OF TIMES AND ENERGIES. The Consultant hereby promises to perform
and discharge well and faithfully the responsibilities which may be assigned to
the Consultant from time to time by the officers and duly authorized
representatives of the Company in connection with the conduct of its financial
and investor public relations and communications activities, so long as such
activities are in compliance with applicable securities laws and regulations.
Consultant shall diligently and thoroughly provide the consulting services
required hereunder. Although no specific hours-per-day requirement will be
required, Consultant and the Company agree that Consultant will perform the
duties set forth hereinabove in a diligent and professional manner. The parties
acknowledge and agree that a disproportionately large amount of the effect to be
expended and the costs to be incurred by the Consultant and the benefits to be
received by the Company are expected to occur upon and shortly after; and in any
event, within two months
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of the effectiveness of this Agreement. It is explicitly understood that the
price of the Company's common stock, nor the trading volume of the Company's
common stock hereunder will in no way measure Consultant's performance of its
duties.
4. REMUNERATION. As full and complete compensation for services described in
this Agreement, the Company shall compensate Consultant as follows:
For services rendered by Consultant to the Company from April 1, 2000 to June
20, 2000, for Consultant's identification during such period of time of a large
global financial strategic partner for the company as well as the identification
of other potential strategic partners and opportunities and for other good and
valuable consideration, the Company agrees to issue and deliver to the
Consultant a fee ("Stock Fee") in the form of Three Hundred Thirty Three
Thousand Three Hundred Thirty Three (333,333) shares of the Company's Common
Stock ("Common Stock"). Company shall confirm Consultant's performance of such
services to be rendered from April to June 20, 2000 and Company's obligation to
pay such Stock Fee by executing Exhibit A to this Agreement. This Stock Fee
shall be issued to the Consultant no later than June 30, 2000 and shall, when
issued and delivered to Consultant, be fully paid and non-assessable. The
Company also agrees to pay Consultant the sum of Three Thousand Dollars
($3,000.00) cash per month beginning July 1, 2000, the first installment of
which is due upon the full execution of this Agreement and subsequent
installments due and payable on the last day of each month for the duration of
this Agreement, and shall, when paid to Consultant, be fully paid and
non-assessable. The Company understands and agrees that Consultant has foregone
significant opportunities to accept this engagement and that the Company derives
substantial benefit from the execution of this Agreement and the ability to
announce its relationship with Consultant. The Common Stock issued as a Stock
Fee, shall constitute payment for Consultant's services rendered to the Company
for the period of time from April 1, 2000 to June 20, 2000 and is a
nonrefundable, non-apportionable, and non-ratable; such Shares are not a
prepayment for future services. If the Company decides to terminate this
Agreement prior to June 30, 2001 for any reason whatsoever, it is agreed and
understood that Consultant will not be requested or demanded by the Company to
return any of the cash or Common Stock paid to it hereunder. Further, if and in
the event the Company is required in whole or in part, during the term of this
Agreement, it is agreed and understood Consultant will not be requested or
demanded by the Company to return any of the 333,333 shares of Common Stock paid
to it hereunder. It is further agreed that if at any time during the term of
this Agreement, the Company or substantially all of the Company's assets are
merged with or acquired by another entity, or some other change occurs in the
legal entity that constitutes the Company, the Consultant shall retain and will
not be requested by the Company to return any of the 333,333 shares of Common
Stock paid to it hereunder. The Common Stock issued pursuant to this Agreement
shall be issued in the name of The Del Mar Consulting Group, Inc. Further, the
Company agrees that it will include, in the next Registration Statement filed by
the Company with the SBC on Forms XX-0, XX-0, XX-0 or other appropriate form
relating to the resale of restricted shares, the Common Stock issued to
Consultant pursuant to this Agreement, excluding the current SB-2 Registration
Statement which has been filed with the SEC on or about May 15, 2000. The
company agrees to file such a registration statement no later than March 31,
2000. The Del Mar Consulting Group, Inc. agrees
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that it will not publicly or privately sell or transfer prior to the termination
of this Agreement any of the Common Stock issued to it hereunder.
4.2 Consultant acknowledges that the shares of Common Stock to be issued
pursuant to this Agreement (collectively, the "Shares") have not been
registered under the Securities Act of 1933, and accordingly are
"restricted securities" within the meaning of Rule 144 of the Act. As
such, the Shares may not be resold or transferred unless the Company
has received an opinion of counsel reasonably satisfactory to the
Company that such resale or transfer is exempt from the registration
requirements of that Act.
4.3 In connection with the acquisition of Shares hereunder, the Consultant
represents and warrants to the Company as follows:
(a) Consultant acknowledges that the Consultant has been afforded the
opportunity to ask questions of and receive answers from duly
authorized officers or other representatives of the Company concerning
an Investment in the Shares, and any additional information which the
Consultants have requested
(b) Consultant's investment in restricted securities is reasonable in
relations to the Consultant's net worth, which is in excess of ten
(10) times the Consultant's cost basis in the Shares. Consultant has
had experience in investments in restricted and publicly traded
securities, and Consultant has had experience in investments in
speculative securities and other investments that involve the risk of
loss of investment. Consultant acknowledges that an investment in the
Shares is speculative and involves the risk of loss. Consultant
acknowledges that an investment in the Shares is speculative and
involves the risk of loss. Consultant has the requisite knowledge to
assess the relative merits and risks of this investment without the
necessity of relying upon other advisors, and Consultant can afford the
risk of loss of his entire investment in the Shares. Consultant is (i)
an accredited investor, as that term is defined in Regulation D
promulgated under the Securities Act of 1933, and (ii) a purchaser
described in Section 25102(f)(2) of the California Corporate
Securities Law of 1968, as amended.
(c) Consultant is acquiring the Shares for the Consultant's own account
for long-term investment and not with a view toward resale or
distribution thereof except in accordance with applicable securities
laws.
4.4 With each transfer of shares of Common Stock to be issued pursuant to
this Agreement (collectively, the "Shares"), Company shall cause to be
issued a certificate representing the Common Stock. Company warrants
that all Shares issued to Consultant pursuant to this Agreement shall
have been validly issued, fully paid and non-assessable and that the
issuance and any transfer of them to Consultant shall have been duly
authorized by the Company's board of directors.
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5. "FINDER'S FEE". It is understood that in the event Consultant identifies for
the Company an intermediary broker dealer, lender or equity purchaser, not
already having a preexisting relationship with the Company, with whom Company,
or its nominees, ultimately finances or causes the completion of such financing,
Company agrees to compensate Co0nsultant for such services with a "finder's fee"
in the amount of 2.5 of total gross funding provided by such intermediary broker
dealer, lender or equity purchaser, such fee to be payable in cash. This will be
in addition to any fees payable by Company to any other intermediary, if any,
which shall be per separate agreements negotiated between Company and such other
intermediary. It is also understood that in the event Consultant identifies for
the Company, or its nominees, a merger and/or acquisition candidate, either
directly or indirectly through another intermediary, not already having a
preexisting relationship with the Company, with whom Company, or its nominees,
ultimately is acquired, with whom Company, or its nominees acquires or causes
the completion of such acquisition, Company agrees to compensate Consultant for
such services with a "finder's fee" in the amount of 2.5% of total gross
consideration provided by such merger
5.1 It is further understood that Company, and not Consultant, is
responsible to perform any and all due diligence on such intermediary
broker dealer, lender, equity purchaser or acquisition/merger candidate
introduced to it by Consultant under this Agreement, prior to Company
receiving funds or closing on any acquisition. However, Consultant will
not introduce any parties to Company about which Consultant has any
prior knowledge of questionable, unethical or illicit activities.
5.2 Company agrees that said compensation to Consultant shall be paid in
full at the time said financing or merger/acquisition is closed.
Moreover, said compensation, will be a condition precedent to the
closing of such financing or merger/acquisition and Company shall
execute any and all documents necessary to effect said compensation.
5.3 As further consideration to Consultant, Company, or its nominees,
agrees to pay with respect to any financing or acquisition candidate
provided directly or indirectly to the Company by any lender or equity
purchaser covered by this Section 5 for the period commencing at the
effective date of this Agreement and ending two years from the
termination of this Agreement, a fee to Consultant equal to that
outlined in Section "5" herein.
5.4 Consultant will notify Company of introductions it makes for potential
of financing or acquisition in a timely manner (within approximately 5
days introduction). If Company has a preexisting relationship with such
nominee and believes such party should be excluded from this Agreement,
then Company will notify Consultant immediately of such circumstance
via facsimile memo.
6. EXPENSES. Consultant agrees to pay for all its expenses (phone, labor, etc.),
other than extraordinary items (travel and entertainment required by/or
specifically requested by the Company, roadshows, luncheons or dinners to large
groups of investment professionals, mass faxing to sizable percentage of the
Company's constituents, investor conference calls, prior
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advertisements in publications, etc.) approved by the Company prior to its
incurring any obligation for reimbursement. The Company agrees and understands
that Consultant will not be responsible for preparing or mailing due diligence
and/or investor packages on the Company, and that the Company will have some
means to prepare and mail out investor packages at the Company's expense.
7. INDEMNIFICATION. The Company warrants and represents that all oral
communications, written documents or materials furnished to Consultant are
accurate, and the Consultant warrants and represents that all communications
with the public, with respect to the financial affairs, operations,
profitability and strategic planning of the Company are in accordance with
information provided to it by the Company. The Consultant may rely upon the
accuracy of the information provided by the Company without independent
investigation. The Company and Consultant will each protect, indemnify and hold
each other harmless against any claims or litigation including any damages,
liability, cost and reasonable attorney's fees as incurred in connection with
this engagement arising out of the acts or omissions of the other party.
8. REPRESENTATIONS. Consultant represents that it is not required to maintain
any licenses and registrations under federal or any state regulations necessary
to perform the services set forth herein. Consultant acknowledges that, to the
best of its knowledge, the performance of the services set forth under the
Agreement will not violate any rule or provision of any regulatory agency having
jurisdiction over Consultant. Consultant acknowledges that, to the best of its
knowledge, Consultant and its officers and directors are not the subject of any
investigation, claim, decree or judgment involving any violation of the SEC or
securities laws. Consultant further acknowledges that it is not a securities
Broker Dealer or a registered investment advisor. Company acknowledges that, to
the best of its knowledge, that it has not violated any rule or provision of any
regulatory agency having jurisdiction over the Company. Company, acknowledges
that, to the best of its knowledge, Company is not the subject of any
investigation, claim, decree or judgment involving any violation of the SEC or
securities laws.
9. STATUS AS INDEPENDENT CONTRACTOR. Consultant's engagement pursuant to this
Agreement shall be as independent contractor, and not as an employee, officer or
other agent of the Company. Neither party to this Agreement shall represent or
hold itself out to be the employer or employee of the other. Consultant further
acknowledges the consideration provided hereinabove is a gross amount of
consideration and that the Company will not withhold from such consideration any
amounts as to income taxes, social security payments or any other payroll taxes.
All such income taxes and other such payment shall be made or provided for by
Consultant and the Company shall have no responsibility or duties regarding such
matters. Neither the Company nor the consultant possesses the authority to bind
each other in any agreements without the express written consent of the entity
to be bound.
10. ATTORNEY'S FEES. If any legal action or any arbitration or other proceeding
is brought for the enforcement or interpretation of this Agreement, or because
of an alleged dispute, breach, default or misrepresentation in connection with
or related to this Agreement, the successful or prevailing party shall be
entitled to recover reasonable attorneys' fees and other costs in
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connection with that action or proceeding, in addition to any other relief to
which it or they may be entitled.
11. WAIVER. The waiver by either party of a breach of any provision of this
Agreement by the other party shall not operate or be construed as a waiver of
any subsequent breach by such other party.
12. NOTICES. All notices, requests, and other communications hereunder shall be
deemed to be duly given if sent by U.S. mail, postage prepaid, addressed to the
other party at the address as set forth herein below:
To the Company:
xXXXXXXX.xxx, Inc.
Xxxxxxx X. Xxxxxxx, CEO
0000 XXX Xxxx., Xxxxx 000
Xxxx Xxxxx Xxxxxxx, XX 00000
To the Consultant:
The Del Mar Consulting Group, Inc.
Xxxxxx X. Xxxx, President
0000 Xxxxxx Xxx Xxx, Xxxxx X
Xxx Xxx, XX 00000
It is understood that either party may change the address to which notices for
it shall be addressed by providing notice of such change to the other party in
the manner set forth in this paragraph.
13. CHOICE OF LAW, JURISDICTION AND VENUE. This Agreement shall be governed by,
construed and enforced in accordance with the laws of the State of California.
The parties agree that San Diego, County, CA. will be the venue of any dispute
and will have jurisdiction over all parties.
14. ARBITRATION. Any controversy or claim arising out of or relating to this
Agreement, or the alleged breach thereof, or relating to Consultant's activities
or remuneration under this Agreement, shall be settled by binding arbitration in
California, in accordance with the applicants rules of the American Arbitration
Association, and judgment on the award rendered by the arbitrator(s) shall be
binding on the parties and may be entered in any court having jurisdiction
thereof. The provisions of Title 9 of Part 3 of the California Code of Civil
Procedure, including section 1283.05, and successor statutes, permitting
expanded discovery proceedings shall be applicable to all disputes that are
arbitrated under this paragraph.
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15. NON-ASSIGNABILITY OF SERVICES. Consultant's services under this contract are
offered to Company only and may not be assigned by Company to any entity with
which Company merges or which acquires the Company or substantially all of its
assets. In the event of such merger or acquisition, all compensation to
Consultant herein under the schedules set forth herein shall remain due and
payable, and any compensation received by the Consultant may be retained in the
entirety by Consultant, all without any reduction or pro-rating and shall be
considered and remain fully paid and non-assessable. Notwithstanding the
non-assignability of Consultant's services, Company shall assure that in the
event of any merger, acquisition, or similar change of form of entity, that its
successor entity shall agree to complete all obligations to Consultant,
including the provision and transfer of all compensation herein, and the
preservation of the value thereof consistent with the rights granted to
Consultant by the Company herein, and to Shareholders.
16. CONFIDENTIALITY. Consultant acknowledges that from time to time it may be
given access to confidential information of and by the Company and, if so, will
treat al information received as such and take the necessary precautions to
ensure that this information is kept confidential by all Consultants, its
employees and any and all subcontractor that it engages for this Agreement.
17. COMPLETE AGREEMENT. This Agreement contains the entire agreement of the
parties relating to the subject matter hereof. This Agreement and its terms may
not be changed orally but only by an agreement in writing signed by the party
against whom enforcement of any waiver, change, modification, extension or
discharge is sought.
AGREED TO AND DATED AS OF APRIL 1, 2000:
"Company" xXxxxxxx.xxx, Inc.
By:
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Xxxxxxx X. Xxxxxxx, CEO
& Its Duly Authorized Officer
"Consultant" THE DEL MAR CONSULTING GROUP, INC.
By:
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Xxxxxx X. Xxxx, President
& Its Duly Authorized Officer
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EXHIBIT A
CONFIRMATION AND ACKNOWLEDGMENT
Company hereby confirms and acknowledges that from April 1, 2000 to June 20,
2000 Consultant has identified and introduced XxxxxxXxxXxxxxxxxxx.xxx, Inc. and
its affiliated companies as a strategic partner for the Company as well as the
identification of other potential strategic partners and opportunities and
Consultant has rendered advice and strategic assistance to Company during such
period of time. The Company agrees pursuant to Section 4 of the Consulting
Agreement agreed to and effective as of April 1, 2000 by and between
xXxxxxxx.xxx, Inc. and The Del Mar Consulting Group, Inc. to issue and deliver
to the Consultant Three Hundred Thirty Three Thousand Three Hundred Thirty Three
(333,333) shares of the Company's Common Stock.
Dated: June 20, 2000
"Company" xXxxxxxx.xxx, Inc.
By:
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Xxxxxxx X. Xxxxxxx, CEO
