Exhibit 10.39
AMENDMENT NO. 3 TO CONSULTING AGREEMENT
Amendment No. 3 dated April 17, 2000 to the Consulting Agreement (the
"Consulting Agreement") dated as of the 1st day of November, 1999 by Urban Cool
Network, Inc. (the "Company") and RMH Consulting Corp. (the "Consultant").
W I T N E S S E T H
WHEREAS, the parties hereto hereby agree that it would be in their mutual
best interest to amend the Consulting Agreement in the manner set forth herein;
NOW, THEREFORE, in consideration of the above premises and the mutual
promises contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree that the Consulting Agreement is amended as follows:
I. Modifications.
A. The first sentence of paragraph 1.3 of the Agreement is
deleted in its entirety and amended to read as follows:
The term of this Agreement shall commence on and be
effective as of November 1, 1999 ("Commencement Date")
and shall continue for two years after the Commencement
Date (the "Term"), unless either party provides to the
other written notice terminating this Agreement as of
the end of the date which is 15 months from the
consummation of an initial public offering of the
Company's securities, which notice must be delivered at
least 15 days prior to such date.
B. Section 2.1 of the Agreement is deleted in its entirety
and is amended to read as follows:
Fees. In consideration for the performance of the
Services to be provided by the Consultant, the Company
shall pay a fee to the Consultant equal to $6,250 per
month, payable in advance on the first day of each month
(the "Compensation") during the Term of this Agreement,
commencing on the Commencement Date and $75,000 upon the
consummation of an initial public offering of the
Company's securities. Notwithstanding the foregoing, no
amount of the Compensation shall be currently payable as
provided in the foregoing sentence until the earlier of
(i) the consummation of the initial public offering of
the securities of the Company or (ii) July 15, 2000 (the
"Payment Date"). On the Payment Date, the Consultant
shall receive, without interest, from the Company all
Compensation that was otherwise due and payable through
the Payment Date and shall begin to receive the monthly
Compensation as otherwise provided in this Agreement.
C. The following paragraphs are hereby added as Sections
4.13 through 4.16:
4.13 Board of Directors
(a) The Company agrees that it will, upon consummation
of its proposed initial
public offering, for a period of not less than fifteen
(15) months, appoint a designee of the Consultant as an
advisor to its Board of Directors and such advisor shall
be entitled to attend meetings of the Board, receive all
notices and other correspondence and communications sent
by the Company to members of its Board of Directors. In
lieu of the Consultant's right to designate an advisor
to the Board, the Consultant shall have the right during
such fifteen (15) month period, in its sole discretion,
to designate one person for election as a director of
the Company, who is reasonably acceptable to the
Company, and the Company will utilize its best efforts
to obtain the election of such person. The Company
agrees that Xxxx Xxxxxxxxxx or Xxxxxx Xxxxxxxxxx are
acceptable as directors.
The Company agrees that such advisor or member of the
Board shall be entitled to the same reimbursement as
provided to other directors for costs incurred in
attending such meetings, including but not limited to
food, lodging and transportation and (as to a member
other than Xxxx Xxxxxxxxxx or Xxxxxx Xxxxxxxxxx)
compensation and fees.
(b) For a period of fifteen (15) months from the
consummation of the Company's proposed initial public
offering of the Company's securities, the Company agrees
to consult with the Consultant or its designee in
connection with any transaction outside of the ordinary
course of its business. Such consultation shall occur at
the earliest practicable time, to assure that the advice
of the Consultant or its designee would be meaningful in
connection with such transaction.
(c) The rights granted to the Consultant pursuant to
this Section 4.13 shall expire on the earlier of (i) 15
months from the consummation of an initial public
offering of the Company's securities or (ii) 120 days
from the termination of the lock-up period imposed by
the American Stock Exchange on the shares of Common
Stock held by the Consultant and its affiliates.
4.14 Lock-Up Agreement.
(a) The Company hereby agrees to utilize its best
efforts to obtain the agreement of each of its
securityholders, officers and directors not to issue,
offer, agree or offer to sell, sell, grant an option for
the purchase or sale of, transfer, pledge, assign,
hypothecate, distribute or otherwise encumber or dispose
of (whether pursuant to Rule 144 of the General Rules
and Regulations under the Securities Act of 1933, as
amended, or otherwise) any securities of the Company,
including common stock or options, rights, warrants or
other securities underlying, convertible into,
exchangeable or exercisable for or evidencing any right
to purchase or subscribe for any common stock, or any
beneficial interest therein for a period of at least 12
months from the effective date of the registration
statement in connection with the Company's proposed
initial public offering. The Company agrees that it will
not file a registration statement (except a registration
statement on Form S-4 (in connection with an acquisition
and provided that the Company obtains a fairness opinion
from one of the ten largest accounting firms in the
United States) or Form S-8 with respect to 100,000
shares of Common Stock and additional shares of Common
Stock upon the prior written consent of the Consultant
which shall not be unreasonably withheld or delayed or
other similar
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form) covering any shares of its Common Stock without
consent of the Consultant until the Common Stock of the
Consultant is tradeable without restriction, unless the
shares of Common Stock held by the Consultant are
included in such registration statement.
(b) The Company agrees to obtain an agreement from Xxxxx
X. Xxxxx, III, Xxxxxxx Xxxxxxx and Xxxxxxxxxx Artist
Management, LLC as described in Section 4.14 (a).
(c) The Company agrees not to release any securityholder
from the lock-up agreement described in Section 4.14(a)
unless the Company releases The Elite Funding Group,
Inc. and RMH Consulting Corp. from such lock-up
agreement at such time.
4.15 Reimbursement and Cooperation
(a) In addition to its other obligations with respect to
legal fees incurred prior to the date hereof, the
Company hereby agrees to reimburse the Consultant for
any legal fees and expenses in an amount of up to $7,500
incurred from and after the date hereof by the
Consultant in connection with the Consultant contesting
the requirement imposed by The American Stock Exchange
of a 12 months lock-up period with respect to the shares
of common stock of the Company held by the Consultant or
its affiliates.
(b) The Company agrees to cooperate with the Consultant
in connection with the Consultant's efforts to obtain
the waiver or relaxation of the lock-up period by the
American Stock Exchange.
4.16 Specific Performance
The Company acknowledges that the Consultant's remedies
at law may not be adequate, therefore, in addition to
the Consultant's remedies at law, the Consultant shall
have the remedy of specific performance in the event of
the Company's breach of the terms of this Agreement. In
the event that the Consultant elects to exercise the
remedy of specific performance, the Company hereby
waives its right to request a bond from the Consultant.
The Company shall be responsible for all legal fees
incurred by Consultant in enforcing this Agreement.
II. Confirmation. Except as expressly specified herein, all other
terms, conditions and provisions of the Consulting Agreement are hereby
confirmed and shall remain in full force and effect without modification.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the day and year first above written.
URBAN COOL NETWORK, INC.
By:
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Name:
Title:
RMH CONSULTING CORP.
By:
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Name:
Title:
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