Exhibit 10.7
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (the "Agreement") is dated as of October 29, 2003, by
and between Xxxxxx Motorcycle Company, Ltd., a Delaware corporation, having its
principal offices located at Xxxxxxx Xxxxxx, Xxxxxxxx 0, Xxxxxxxxxxx, Xxx Xxxxxx
00000 (the "Client") and Xxxxxxx, Spira & Xxxxxx, LLC, having an address at 000
Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Consultant").
B A C K G R O U N D:
WHEREAS, Consultant is in the business of providing business development,
strategic analysis of marketing opportunities and intellectual property services
to public and privately-held corporations; and
WHEREAS, Client desires to retain Consultant to provide certain services,
identified below, as well as to advise and consult with Client's management
concerning its business development, licensing opportunities for it intellectual
property, and in connection with the development and implementation of a
marketing program for Client's business, and;
WHEREAS, Client and Consultant desire to set forth in this Agreement all of the
terms and provisions that shall govern their business relationship.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and adequacy of which is expressly acknowledged, Client and Consultant
agree as follows:
1. ENGAGEMENT OF CONSULTANT.
Client hereby retains Consultant to:
(a) Provide general marketing and licensing consulting advice with a
particular focus on the development of Client's intellectual property portfolio,
and;
(b) Assist in developing an effective licensing program covering various
aspects of Client's technology as well as developing an overall marketing and
sales program for Client's products, all of which shall include but not be
limited to the following:
o Review all of Client's intellectual property assets, including all
patents issued, patents pending, trademarks and trade names, issued
or pending, worldwide;
o Based upon Consultant's analysis, Consultant shall disclose to
Client recommended enhancements and supplements to existing
intellectual property that will add value and/or provide additional
legal protection to Client's intellectual property;
o Advise Client on strategic licensing opportunities for Client's
technology that shall provide Client with potential sources of
revenue;
o Consultant shall introduce Client to potential licensees of Client's
technology and, upon Client's request, engage in negotiations with
such potential licensees to finalize licensing agreements on behalf
of Client;
o Consultant shall analyze Client's motorcycle product and Client's
current plan of operations to develop, assemble and sell heavy
cruiser motorcycles; following such analysis, Consultant shall
propose to Client what other motorcycle products utilizing the
Xxxxxx CSRV System present the best opportunities to develop revenue
streams and further enhance Client's marketplace identity, utilizing
general business operational factors such as production costs,
distribution, marketing, competition and ease of market entry;
o Consultant shall advise and consult Client on marketing and
distribution channels for selling Client's heavy cruiser
motorcycles;
o Consultant shall analyze the broadcast and print media opportunities
for Client's market program for its heavy cruiser motorcycles and
recommend an appropriate media advertising program for this product,
within a budget mutually agreed upon between Client and Consultant.
In the event either Client or Consultant desires to include any additional
projects, reports, or tasks to be undertaken by Consultant and included within
the scope of services set forth above, the parties shall mutually agree on such
additional service and execute the appropriate addendum to include them in this
Agreement.
All the foregoing services are collectively referred to as the "Consulting
Services" hereinafter.
2. COMPENSATION.
A base fee for the Consulting Services provided during the Initial
Consulting Period (as defined below) shall be eight thousand three hundred
thirty three dollars ($8,333) per month, fifty thousand (50,000) shares of the
company's common stock and warrants to purchase one hundred thousand (100,000)
shares of the company's common stock at the exercise price of six ($6.00)
Dollars per share.
All cash will be payable by wire to:
Xxxxxxx, Xxxxx & Xxxxxx, LLC
Acct. # 140079969465 ABA # 000000000
Manhattan Bank Chase
0 Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, X.X. 00000
All stock and warrant certificates shall be issued in the
following name:
Xxxxxxx, Xxxxx & Xxxxxx, LLC and send to:
000 Xxxx Xxxxxx (00xx Xxxxx)
Xxx Xxxx, Xxx Xxxx 00000
3. TERM OF AGREEMENT, EXTENSIONS AND RENEWALS
This Agreement shall have a minimum term of six (6) months (the
"Consulting Period"). Thereafter, the Consulting Period will automatically be
extended on a month-to-month basis (the "Extension Period") at the same rate as
that during the six (6) month period at $8,333 per month unless Consultant or
Client shall serve written notice on the other party terminating this Agreement.
Such notice shall be in writing and shall be delivered at least twenty-one (21)
days prior to the end of the Consulting Period or any subsequent extension
period. In the event of termination pursuant to this paragraph, neither party
shall have any further rights or obligations hereunder after the effective date
of such termination except the obligation of Client to pay any fees due and
owing and to reimburse agreed upon costs and expenses as provided for in this
Agreement.
4. DUE DILIGENCE
Client shall supply and deliver to Consultant all information
relating to its business as may be reasonably requested by Consultant to enable
Consultant to make such investigation of Client and it's business prospects, and
Client shall make available to Consultant names, addresses, and telephone
numbers as Consultant may need to verify or substantiate any such information
provided.
5. BEST EFFORTS BASIS
Consultant agrees that it will at all times faithfully and to the
best of its experience, ability, talents, perform all the duties that may be
required of and from Consultant pursuant to the terms of this Agreement. Client
specifically acknowledges and agrees, however, that the Consulting Services to
be provided by Consultant shall be conducted on a "best efforts" basis and has
not, cannot, and does not guarantee that Consultant's efforts will have any
impact on Clients business or that any subsequent financial improvement will
result due to the Consultant's efforts. Client understands and acknowledges that
the success or failure of Consultant's efforts will be predicated on Client
management skills, assets and operating results along with its cooperation in
Consultant's efforts on Client's behalf.
6. CLIENT'S RIGHT TO APPROVE TRANSACTIONS.
Client expressly retains the right for approve, in it's sole
discretion, each and every transaction introduced by Consultant that involves
Client as party to any agreement. Consultant and Client mutually agree that
Consultant is not authorized to enter into agreements on behalf of Client.
7. CLIENT UNDER NO DUTY OR OBLIGATION TO ACCEPT OR CLOSE ON ANY
TRANSACTIONS.
It is mutually understood and agreed that Client is not obligated to
accept or close any proposal, acquisition or merger transaction submitted by
Consultant.
8. PLACE OF SERVICES.
The Consulting Services contemplated to be performed by Consultant
or its agents will be performed through Consultant offices in New York, New
York, in the field where existing opportunities may be located, and such other
places deemed to be appropriate by Consultant.
9. COSTS AND EXPENSES.
Consultant shall be entitled to reimbursement of all agreed upon
third party and out-of-pocket expenses that Consultant may incur in performing
Consulting Services under this Agreement. Such reimbursement shall be in
addition to any fees otherwise earned by Consultant hereunder, and shall be paid
by Client within twenty-one (21) days of Consultant's delivery of its statement
of costs.
10. WORK STOPPAGE OR EARLY TERMINATION.
Notwithstanding anything to the contrary contained herein, Client
shall have the right to direct the work to be performed by Consultant hereunder
on any matter. In addition, Client shall have the right at any time to direct
Consultant to cease work or abandon its efforts on Client's behalf, and to
refrain from commencing any new work or providing any further Consulting
Services hereunder. If at any time Client directs Consultant to stop work, for
any reason other than a conflict of interest, Consultant shall have thirty (30)
days following such notice termination to exercise its remaining
warrants/options, if applicable.
11. NON-EXCLUSIVE SERVICES.
Client acknowledges that Consultant and its agents are currently
providing services of the same or similar nature to other parties and Client
agrees that Consultant is not prevented or barred from rendering services of the
same nature or similar nature to any other individual or entity. Consultant
understands and agrees that Client shall not be prevented or barred from
retaining other persons or entities to provide services of the same or similar
nature as those provided by Consultant.
12. POTENTIAL CONFLICTS OF INTEREST.
During the time of this Agreement, Consultant may enter into
agreement(s), certain activities or employment that will be in direct conflict
with Client's interest and Consultant's obligations under this Agreement.
Client's sole remedy in the event of such conflict shall be termination of this
Agreement and the immediate cancellation of the option. Consultant will advise
Client of its position with respect to any activity, employment, business
arrangement or potential conflict of interest that may be relevant to this
Agreement.
13. REPRESENTATIONS AND WARRANTIES OF CLIENT TO CONSULTANT THAT:
Client hereby represents and warrants to Consultant that:
A. Corporate Existence. Client is a corporation duly organized,
validly existing, and in good standing under the laws of the State of Delaware
with corporate power to own property and carry on it's business as it is now
being conducted and will be conducted in the future.
B. Financial Statements. Client has or will cause to be delivered
concurrently with the execution of this Agreement, copies of it's most recent
financial statements, not to be more than ninety (90) days old, together with
related statements of Operations and Retained Earnings and Changes in Financial
Position for the same period (the "Client Financials"). The Client Financials
accurately set forth the financial condition of Client as of the dates of the
Client Financials and all the financial statements described in this paragraph
have been prepared in conformity with generally accepted accounting principals,
applied on a consistent basis, and present fairly the financial position of
Client as of their date. Client will immediately advise Consultant of any
material change in Client's Company and potential inability to perform
objectives in a business like manner.
C. No Conflict. This Agreement has been duly executed by Client and
said execution and performance of this Agreement will not violate, or result in
a breach of, or constitute a default in any Agreement, instrument, judgment,
decree or order to which Client is a party or to which Client is subject, nor
will such execution and performance constitute a violation or conflict of any
fiduciary duty to which Client is subject.
D. Non-disclosure. Client agrees not to disclose Consultant's
proprietary techniques, technologies and methodologies without prior permission
in writing.
14. REPRESENTATION AND WARRANTIES OF CONSULTANT.
Consultant hereby represents and warrants to Client that:
A. Prior Experience. Consultant has extensive experience and
currently enjoys a relationship with investment banking firms, financial
analysts, intellectual property attorneys, industrial and government
organizations and it has successfully performed the services contemplated by
this Agreement for the benefit of other companies within the last year.
B. No Litigation. Consultant is not a defendant, nor a plaintiff
against whom a counterclaim has been asserted, in any litigation, pending or
threatened, nor has any material claim been made or asserted against Consultant,
nor are there any proceedings threatened or pending before any U.S. or other
territorial, federal, state or municipal government, or any department, board,
body or agency thereof, involving as of the date hereof, that may entitle a
successful litigant to a claim against any of Consultant's assets.
C. Information. No representation or warranty contained herein, nor
any statement in any document, certificate or schedule furnished or to be
furnished pursuant to this agreement by Consultant, or in connection with the
transaction contemplated hereby, contains or contained any untrue statement of
material fact.
D. Inside Information - Securities Laws Violations. In the course of
the performance of Consultant's duties, Consultant may become aware of
information that is considered "inside information" within the meaning of the
Federal Securities Laws, Rules and Regulations. Consultant acknowledges that
it's use, or the use of such information to purchase or sell securities of
Client, or it's affiliates, or to inform any other party with a view to buy,
sell, or otherwise deal in Client's security is prohibited by law.
E. Agreement Does Not Contemplate Corrupt Practice - Domestic or
Foreign. All payments under this Agreement constitute compensation for services
performed and this Agreement and all payments, and the use of payments by
Consultant, do and shall not constitute an offer, payment or promise or
authorization of payment of any money or gift to an official or political party
of, or candidate for political office in any jurisdiction within or outside of
the United States. These payments may not be used to influence any act or
decision of an official, party, or candidate to use his / her / it's influence
with a government to assist Client in obtaining, retaining, or directing
business to Client or any person or their corporate entity. As used in this
Paragraph, the term "official" means any officer or employee of a government, or
any person acting in an official capacity for or on behalf of any government;
the term "government" applies to any department, agency, or instrumentality of a
government.
F. Subsequent Events. Consultant will notify Client if, subsequent
to the date hereof, Consultant incurs obligations that could compromise its
efforts and obligations under this Agreement.
15. CONSULTANT NOT AN AGENT OR EMPLOYEE.
Consultant's obligations under this Agreement consist solely of the
Consulting Services described herein. In no event shall Consultant be considered
to act as the employee or agent of Client or otherwise represent or bind Client.
For the purposes of this Agreement Consultant is an independent contractor. All
final decisions with respects to acts of Client or its affiliates, whether or
not made pursuant to or in reliance on information or advice furnished by
Consultant hereunder, shall be those of Client or such affiliates and Consultant
shall under no circumstances be liable for any expense incurred or loss suffered
by Client as a consequence of such action or decisions.
16. MISCELLANEOUS.
A. Authority. The execution and performance of this Agreement have
been duly authorized by all requisite corporate action. This Agreement
constitutes a valid and binding obligation of the parties hereto.
B. Amendment. This Agreement may be amended or modified at any time
or in any matter only by an instrument in writing executed by the parties
hereto.
C. Waiver. All the rights and remedies of either party under this
Agreement are cumulative and not exclusive of any other rights and remedies
provided by law. No delay or failure on the part of either party in the exercise
of any right or remedy arising from a breach of this Agreement shall operate as
a waiver of any subsequent right or remedy arising from a subsequent breach of
this Agreement. The consent of any party where required hereunder to any act of
occurrence shall not be deemed to be a consent to any other act of occurrence.
D. Assignment:
(i) Neither this entire Agreement nor any right created by
this Agreement shall be assignable by either party without the prior written
consent of the other, except by the law of succession.
(ii) Except as limited by the provisions of subparagraph (1),
the Agreement shall be binding on and inure to the benefit of the respective
successors and assignees of the parties.
(iii) Nothing in this Agreement, expressed or implied, is
intended to confer upon any person , other than the parties hereto and their
successors, any right or remedies under this Agreement.
E. Notices. Any 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 or transmittal by certified registered mail , postage
prepaid, or when deposited by a public telegraph company for transmittal,
charges prepaid, provided that the communication is addressed to (or to such
person as designated by Client to receive such notice):
(I) In the case of Consultant to:
Xxxxxxx, Xxxxx & Xxxxxx LLC 000 Xxxx
Xxxxxx, (00xx Xxxxx) Xxx Xxxx, XX
00000 Telephone: (000) 000-0000 Fax:
(000) 000-0000
(ii) In the case of Client to:
Xxxxxx Motorcycle Company, Ltd.
0000 Xxxxxxx 00 & Xxxxxxxxx Xx.
Xxxx Xxxxxxxx, XX 00000
F. Headings and Captions. The headings of Paragraphs are included
solely for convenience. If a conflict exists between any heading and the text of
this Agreement, the text shall control.
G. Entire Agreement. This instrument and the exhibits to this
instrument contain the entire Agreement between the parties with respect to the
transaction contemplated by the Agreement. It may be executed in any number of
counterparts but the aggregate of the counterparts together constitute only one
and the same instrument.
H. Partial Effect or Invalidity. In the event that any one or more
of the provisions contained in Agreement shall for any reason held to be
invalid, illegal, or unenforceable in any respect, such invalidity, illegality,
or unenforceability shall not effect any other provisions of this Agreement, but
this Agreement shall be construed as if it never contained such invalid,
illegal, or unenforceable provisions.
I. Controlling Law. The validity, interpretation and performance of
this Agreement shall be controlled by and construed under the laws of the state
of New York applicable to agreements made and wholly to be performed in such
state.
J. Attorney's Fees. If any action at law or in equity, including an
action for declaratory relief, is brought to enforce or interpret the provisions
of this Agreement, the prevailing party shall be entitled to recover actual
attorney's fees from the other party. The attorney's fees may be ordered by the
court in the trial of any action described in this paragraph or may be enforced
in a separate action in order to determine attorney's fees.
K. Time is of the Essence. Time is of the essence of this Agreement
and of each and every provision hereof.
L. Mutual Cooperation. The parties hereto shall cooperate with each
other to achieve the purpose of this Agreement, and shall execute such other and
further documents and take such other and further actions as may be necessary or
convenient to effect the transactions described herein.
M. Further Actions. At any time and from time to time, each party
agrees, at it's or their expense, to take actions and to execute and deliver
documents as may be reasonably necessary to effectuate the purposes of this
Agreement.
N. Indemnification. Client and Consultant agree to indemnify, defend
and to hold each other harmless from and against all demands, claims actions,
losses, damages, liabilities, costs and expenses, including without limitations,
interest, penalties and attorney's fees and expenses asserted against or imposed
or incurred by either party by reason of or resulting from a breach of any
representation, warranty, covenant, condition or agreement of the other party to
this Agreement.
O. Facsimile Counterparts. If a party signs this Agreement and
transmits an electronic facsimile of the signature page of the other party, the
party who receives the transmission may rely upon the electronic facsimile as a
signed original of this Agreement.
P. Arbitration. In the event of a dispute, the parties agree that
this Agreement shall be resolved by arbitration in accordance with the
requirements of the American Arbitration Association in New York City, New York,
and judgment upon the award rendered may be entered in any court having
jurisdiction thereof. The Client shall be responsible for any legal fees
incurred by Consultant in the event of an arbitration that is decided in
Consultant's favor.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
hereinabove written.
By: /s/ Xxxxx X. Xxxxx III
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Xxxxx X. Xxxxx III - Managing Director
Xxxxxxx, Xxxxx & Xxxxxx LLC
By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx - CEO
Xxxxxx Motorcycle Company, Ltd.
