FINANCIAL AND STRATEGIC CONSULTING AGREEMENT
This Agreement is entered into and is effective as of this 15th day of April,
2000, by and between XxxxxxXxx.xxx, Inc. a Wyoming corporation, having its
principal place of business at 000 Xxxxxxx Xxxxx, Xxxxx 000 Xxxxxxx, Xxxxxxx,
Xxxxxx X0X 0X0 (the "Company"), and First Global Capital Corp., a Florida
corporation having its principal place of business at 00 Xxxx Xxxxxxx Xxxx
Xxxxxxxxx, Xxxxx 000, Xxxxxx Xxxxxxx, Xxxxxxx 00000 (the "Consultant").
WHEREAS, the Company desires to retain Consultant to provide services which
are related to creating and implementing the Company's strategic and business
plan, including raising funds in an Initial Public Offering, in a cost-effective
manner; and
WHEREAS, Consultant, through its key personnel has considerable experience in
financial and strategic consulting with development stage companies.
NOW THEREFORE, in consideration of the promises and the mutual covenants and
agreements herein contained, the parties hereto do covenant and agree, as
follows:
1. Retention.
The Company hereby retains Consultant to render certain financial and strategic
advisory services (the "Services"), to consult with the Chairman of the Board of
Directors, the Board of Directors and key executive personnel, from time to
time, as requested by the Company. The Services shall include, but not be
limited to consulting in the areas of financial planning, strategic planning and
the creation and implementation of a plan to raise funds by an Initial Public
Offering. Consultant agrees to use its best efforts to supply the Services in a
professional, diligent and timely manner.
1. Term. The Term of this Agreement shall be twelve (12) months from the date
hereof. In the event of premature termination, all fees paid or accrued will be
deemed earned. The cash portion of the compensation referred to in paragraph 2,
below, will all become immediately due and payable upon receipt by the Company
of the funds from the private placement.
2. Compensation.
a. The Company shall pay the Consultant for the Services that have already been
provided and the Services to be provided by the Consultant. The entire fee will
be due upon execution of this Agreement and payable upon receipt by the Company
of the proceeds from the private placement referred to herein.
b. The Consultant agrees to purchase, or cause to be purchased by "accredited
investors," as that term is defined by Regulation D of the Securities Act of
1933, as amended, at least 1,000,000 shares of Common Stock in the Company at
the price of $0.10 per share, said funds to be used primarily for the payment of
this consulting fee, and any other general corporate purposes, subject to the
reasonable approval of the Consultant. All such purchases shall be done in
accordance with the various state securities laws covering limited offering
exemptions. The acquirers of these shares agree to be bound by all of the terms
and conditions relating to transferability of shares contained in this
Agreement. See paragraph 6.1 for regarding placement of any of these common
shares.
c. In addition to the cash compensation referred to immediately above, the
Consultant shall receive 1,000,000 shares of non-voting preferred shares. Upon
completion of the IPO, these shares will be converted into common shares, one
common share for each share of non-voting preferred. The Company also agrees to
register these common shares at the filing of the first registration statement
filed after the commencement of trading of the common shares. In the event that
the IPO is not completed within twelve months from the date of this Agreement,
the non-voting preferred shares are voidable at the option of the Company. In
the event that the Company withdraws from this Agreement, these shares are
convertible into common shares and the registration requirements remain. The
common shares will also be deemed to be tradable under Rule 144, in the event
that a registration statement is not filed within a reasonable period of time.
In the event that the Company does not earn sufficient profits to cause the
special convertible shares issued to various insiders to be converted into
common shares by the end of the third year after the effective date of the IPO,
each of the 1,000,000 non voting preferred shares referred to herein shall have
20 votes. It is expressly understood and agreed that this multiple voting
position will permit the Consultant to gain effective control of the Company and
take whatever steps the Consultant deems advisable for the best long term
interests of the Company and its public shareholders.
d. The Consultant agrees that it is its responsibility to pay all costs of the
offering, except for reimbursement of out of pocket expenses by the securities
counsel, which shall be paid by the Company directly to counsel, and all audit
fees which shall be paid directly by the Company to the independent auditor.
e. The Consultant also agrees to stand ready to purchase enough Units at the end
of ninety days from the effective date of the public offering date for the Units
of the Company so that the minimum Units will be sold.
3. Assignability of Shares. Consultant represents and warrants to the Company
that it is not acquiring the Shares nor are the "accredited investors" acquiring
these shares with a view to, or for resale in connection with, any distribution
in violation of the Securities Act of 1933, as amended. The Shares currently
will not be registered under the Securities Act or any state securities law and
shall not be transferred, sold, assigned or hypothecated in violation thereof.
If permitted by law, any such transfer, sale, assignment or hypothecation shall
be effected by Consultant only by surrendering the Shares for assignment at the
office of the Company, accompanied by an opinion of counsel satisfactory to the
Company, and its counsel, stating that such transfer does not violate the
Securities Act or any applicable state securities law.
4. Registration Rights. The shares to be issued pursuant to subsection 2 of
this Agreement shall contain unlimited piggyback registration rights.
Consultant's piggyback registration rights shall commence one (1) year from the
date hereof and shall terminate three (3) years after the Company shall register
any of its shares of common stock for sale pursuant to the Securities Act of
1933, as amended (the ("Act"). The Company shall bear the costs of such
registrations. In the event of the sale of the shares contemplated hereunder,
Consultant shall pay any and all underwriting commissions and non-accountable
expenses of any underwriter selected by Consultant to sell the common stock (the
"Registrable Securities"), together with the expenses of any legal counsel
selected by Consultant to represent Consultant in connection with the sale of
the Registrable Securities. The Company agrees to use its prompt best efforts to
cause the filing required herein to become effective and to qualify or register
the Registrable Securities in such states as are reasonably requested by the
Consultant. As to Consultant's piggyback registration rights, the Company agrees
to qualify or register the Registrable Securities in such additional states as
are reasonably requested by Consultant and the Company shall bear all costs and
expenses, including reasonable counsel fees and expenses, of the qualification
of registration of the Registrable Securities in such additional states as are
reasonably requested by the Consultant. In no event shall the Company be
required to register the Registrable Securities in more than five (5) states or
in a state in which such registration would cause (i) the Company to be
obligated to do business in such state, or (ii) the principal stockholders of
the Company to be obligated to escrow any of their securities. In the event that
Consultant shall request that the Company register the Registrable Securities in
more than 5 states, the Company agrees to cooperate with such request, but at
the sole cost of the Consultant, unless as part of a subsequent registration,
the Company determines that registration in states beyond the five, is in its
own best interests.
Notwithstanding the provisions contained in this paragraph 4, the holders of the
shares acquired pursuant to paragraph 2, will be permitted to avail themselves
of the Rule 144, with regard to disposal of the shares.
5. Supervision. The Company has retained Consultant because of their
expertise in the financial and operations guidance of development stage
companies and related strategic planning. Therefore, Consultant will have the
absolute right during the term of this Agreement to approve a material change in
the concept of the Company business. In the event that there is a disagreement
between Company officers and directors and Consultant, a special shareholder's
meeting will be held and the votes tabulated, excluding Consultant, officers and
directors, with the majority of those voting able to determine the future course
of the Company.
6. Miscellaneous.
6.1 The Parties specifically acknowledge that:
a) Consultant has advised the Company that is not a duly licensed securities
broker/dealer or investment-banking firm; and,
b) Consultant is not required to sell any securities or provide any services
that are exclusive to licensed securities broker/dealers or investment bankers.
6.2 The Consultant understands that the Company officers and directors are very
optimistic about the future prospects of the Company, which belief is shared by
the Consultant. To that end the Company and Consultant have agreed that a series
of convertible preferred shares will be created to be made available to
officers, directors and key employees with the basic concept that the greater
the earnings per share earned, the more common shares can be "earned back." This
earn-back period will last no more than five years from the effective date of
the IPO.
7. Company Disclosure of Information. The Company hereby agrees to timely
provide the Consultant with the documents and the information enumerated below.
The Consultant agrees that it shall keep all such information and the contents
of such documents confidential and shall utilize such information solely for the
purpose of performing the Services, and for no other purpose. The information
and/or documents that Company shall provide are:
a) documents reasonably requested by Consultant to be prepared in the
preparation of the filings with the SEC.
b) all of the Company's existing documents required for filing with the SEC or
other regulatory bodies with current or future jurisdiction over the Company's
activities;
c) copies of any meetings of the Company's shareholders, directors or committees
of its board of directors;
c) the Company's current audited financial statement and any unaudited financial
statements produced currently by the Company's accountants or auditors;
and
d) all public releases of information.
Anything to the contrary notwithstanding, in the event the Company shall make
any materially false filing or representation to any regulatory authority of
competent jurisdiction, or to the Consultant or to the public, the Consultant
may terminate this Agreement, for cause upon three (3) days' written notice.
8. Consultant's Non-Disclosure of Information/Non-Competition.
a. The Consultant acknowledges that in the course of its engagement it may
become familiar with trade secrets and other confidential information
(collectively, "Confidential Information") concerning the Company and Consultant
shall hold in a fiduciary capacity for the benefit of the Company all secret,
confidential proprietary information, knowledge or data relating to the Company
that shall have been obtained by the Consultant during its engagement by the
Company and that shall have not been or now or hereafter have become public
knowledge (other than by acts by the Consultant or its representatives in
violation of this Agreement). Consultant agrees that it shall not disclose to
any third party any Confidential Information for any purpose other than the
performance of its duties under this Agreement. During the Term and at all times
thereafter, regardless of the reason for the termination of this Agreement,
Consultant shall not, without the prior written consent of the Company or as
otherwise may be required by law or legal process, communicate or divulge any
such information, knowledge or data to anyone other than the Company and those
designated by the Company.
b. Upon completion of the Term or earlier termination of this Agreement for any
reason, Consultant will return to the Company any confidential materials or
information which the Company may have supplied to the Consultant. Consultant
may retain a copy of such materials or information for Consultant's own due
diligence file. However, Consultant hereby agrees not to distribute or release
such confidential materials or information without giving the Company at least
five (5) days' written notice so that Company shall have the opportunity, at
Company's sole cost and expense, to move to prevent Consultant's distribution or
release of the confidential material or information.
c. Subject to the limitations set forth herein, Consultant agrees that during
the Term and for a period of one year thereafter it shall not directly or
indirectly, own, manage, control, participate in, consult with, render services
for, or in any manner engage in any business directly competing with the
business of the Company as such business exists within any geographical area in
which the Company conducts its business. In addition, Consultant shall not
solicit, interfere with or conduct business with any vendors, customers or
employees of the Company during the term of this Agreement or for a period of
one year after the termination hereof. In the event the Company breaches any of
its duties or obligations under this Agreement, the Company agrees that
Consultant shall not be bound by the provisions of this Agreement, except for
the provisions concerning Confidential Information.
9. Non-Circumvent Agreement. The Company agrees that all third parties
introduced to it by the Consultant represent significant efforts and working
relationships that are unique to, and part of, the work product of the
Consultant. Therefore, without the prior specific written consent of the
Consultant, the Company agrees to refrain from conducting direct or indirect
business dealings of any kind, with any third party so introduced by the
Consultant, for a period of three years from the initial introduction made
during the course of this Agreement. In the event of a violation of this
provision the Consultant shall be entitled to obtain, on an ex parte
application, appropriate injunctive relief from any court of competent
jurisdiction, together with and including all remedies available at law. This
provision shall survive the remaining obligations and performance due hereunder.
10. Indemnification. The Company agrees to indemnify and hold harmless
Consultant and its directors, officers, and affiliates against any and all
losses, claims, damages, obligations, penalties, judgment, awards, liabilities,
costs, expenses, and disbursements (and all actions, suits, proceedings and
investigations in respect thereof and any and all legal or other costs, expenses
and disbursements in giving testimony or furnishing documents in response to a
subpoena or otherwise), including, without limitation, the costs, expenses, and
disbursements, as and when incurred, of investigating, preparing or defending
any such action, proceeding or investigation (wither or not in connection with
litigation to which Consultant is a party), directly or indirectly, caused by,
relating to, based upon, arising out of or in connection with information
provided by the Company which contains a material misrepresentation or material
omission in connection with the provision of services by Consultant under this
Agreement; provided, however, such indemnity agreement shall not apply to any
portion of any such loss, claim, damage, obligation, penalty, judgment, award,
liability, cost, expense or disbursements, to the extent that it is found by a
court of competent jurisdiction to have resulted from the gross negligence or
willful misconduct of Consultant. This indemnification shall survive the
termination of this Agreement.
Each party entitled to indemnification under this agreement (the "Indemnified
Party"), shall give notice to the party required to provide indemnification (the
"Indemnifying Party") promptly after such Indemnified Party has actual knowledge
of any claim as to which indemnify may be sought, and shall permit the
Indemnifying party to assume the defense of any such claim or any litigation
resulting therefrom, provided that counsel for the Indemnifying Party (whose
approval shall not be unreasonably withheld), and the Indemnified Party may
participate in such defense at such party's expense, and provided further that
the failure of any Indemnified party to give notice as provided herein shall not
relieve the Indemnified party of its obligations under this Section 8. Each
Indemnified party shall furnish such information regarding itself or the claim
in question as an Indemnifying party may reasonably request in writing and as
shall be reasonably required in connection with the defense of such claim and
any litigation resulting therefrom.
11. Arbitration. Any dispute, controversy or claim between the Company and
the Consultant arising out of or related to this Agreement shall be conducted
solely in a proceeding held in accordance with the rules of the American
Arbitration Association then in effect. This Agreement, or beach thereof, shall
be settled by arbitration, and any award shall be binding and conclusive for all
purposes thereof, may include injunctive relief (but only as ordered by a Court
of competent jurisdiction), as well as orders for specific performance and may
be entered as a final judgment in any court of competent jurisdiction. No
arbitration arising out of or relating the this Agreement shall include, by
consolidation or joinder or in any other manner, parties other than the Company
and the Consultant and other persons substantially involved in common question
of fact or law whose presence is required if complete relief is to be afforded
in arbitration. The cost and expenses of such arbitration shall be borne in
accordance with the determination of the arbitrator and may include reasonable
attorney's fees, provided, however, that if either party shall commence any
action or proceeding against the other in order to enforce the provisions
hereof, or to recover damages resulting from the alleged breach of any of the
provisions hereof, the prevailing party therein shall be entitled to recover all
reasonable costs incurred in connection therewith, including, but not limited
to, reasonable attorneys' fees. Each party hereby further agrees that service of
process may be made upon it by registered or certified mail, express delivery or
personal service at the address provided for herein.
12. Remedies. In the event of the actual or threatened breach of the
provisions of this Agreement by a party, the other party shall have the right to
obtain injunctive relief and/or specific performance and to seek any other
remedy available to it.
13. Law, venue, jurisdiction. This Agreement and all matters and issued
collateral thereto shall be governed by the laws and the courts of the State of
Florida without regard to the principles of conflicts of laws.
14. Severability. If any provisions of this Agreement becomes or is found to
be illegal or unenforceable for any reason, such clause or provision must first
be modified to the extent necessary to make this Agreement legal and enforceable
and then if necessary, second, severed from the remainder of the Agreement to
allow the remainder of the Agreement to remain in full force and effect.
15. Counterparts. This Agreement may be executed in several counterparts, and
all of such counterparts taken together shall be deemed to be one Agreement.
16. Attorneys' Fees. If either party shall commence any action or proceeding
against the other in order to enforce the provisions hereof, or to recover
damages resulting from the alleged breach of any of the provisions hereof, the
prevailing party therein shall be entitled to recover all reasonable costs
incurred in connection therewith, including, but not limited to, reasonable
attorneys' fees.
17. Waiver of Breach. The waiver by any party of a breach of any provision of
this Agreement shall not operate be construed as a waiver of any subsequent
breach by any party.
18. Notices. Each notice, demand, request, approval or communication
("Notice") which is or may be required to be given by any party to any other
party in connection with this Agreement and the transactions contemplated
hereby, shall be in writing, and given by personal delivery, certified mail,
return receipt requested, prepaid, or by overnight express mail delivery and
properly addressed to the party to be served at such address as set forth above.
Notices shall be effective on the date delivered by overnight express mail or
three days after the date mailed by certified mail.
19. Entire Agreement. This Agreement contains the entire agreement between
Consultant and Company, and correctly sets forth the rights and duties of each
of the parties to each other concerning such matter as of this date. Any
agreement or representation concerning the subject matter of this Agreement or
the duties of Consultant in relation to Company not set forth in this Agreement
is null and void.
20. Binding Effect. The rights created by this Agreement shall inure to the
benefit of, and the obligations created hereby shall be binding upon the
parties, their heirs, successors, assigns and personal representatives.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and
year first hereinabove written.
XXXXXXXXX.XXX, INC.
By: /s/ Xxxxx Xxxxxxxx, Ph.D.
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First Global Capital Corp.
By: /s/ Xxxxxx Xxxxxx
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Xxxxxx Xxxxxx
