Exhibit 10.11
BayHill Group LC
January 6, 2006
Xxxx Xxxxxxxxxxxx
President and CEO
Speaking Roses, Inc.
000 Xxxxxxxx Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Re: Advisory Agreement BayHill Group LC
Dear Xxxx::
This Services Agreement (the "Agreement") is made and entered into effective as
of January 6, 2006 by and between Speaking Roses International, Inc., a Utah
corporation ("Speaking Roses") with principal offices located at 000 X. Xxxxxxxx
Xx., Xxxx Xxxx Xxxx, XX 00000, and BayHill Group LC, a Utah Limited Liability
Company with principal offices located at 0000 X. Xxxxxxxxxx Xxx Xxxx, Xxxx
00000 XXX ("BayHill Group LC"). The Agreement will confirm the understanding
between Speaking Roses and BayHill Group LC, whereby BayHill Group LC will act
as an advisor to Speaking Roses in regard to general business matters as
requested by Speaking Roses.
In consideration of the mutual promises and covenants set forth in this
Agreement and for other good and valuable consideration, the receipt, adequacy
and legal sufficiency of which are hereby acknowledged, Speaking Roses and
BayHill Group LC mutually agree as follows:
1. Services.
BayHill Group LC, through the services of its Members, will be engaged, as
requested by Speaking Roses, with a primary focus on assisting Speaking Roses to
develop business and financial strategies and other corporate matters. BayHill
Group LC Members may also serve as Speaking Roses executives and senior managers
as specified from time to time by Speaking Roses. The specific services agreed
to are outlined in the attached Board presentation proposal and updated vesting
schedule. It is also agreed that BayHill Group will be invited to participate
and contribute to each Board Meeting relating to these services.
2. Term. This Agreement will be for a term from January 6, 2006 through June 30,
2006 (the "Term"). This Agreement may be terminated by either party upon 30
days' advance written notice to the other party for any reason. The Term will be
automatically extended for successive periods of six (6) months each, unless
cancelled by either party upon thirty (30) days written notice given prior to
the end of each six (6) month period.
3. Compensation.3. During the Term of this Agreement, BayHill Group LC shall
receive from Speaking Roses for services rendered pursuant to this Agreement a
fee of Ten Thousand Dollars ($10,000) for the months of January 2006 through
June, 2006. Each of these payments will be due and payable on the first day of
1
each month. BayHill Group LC shall receive a fee of Five Thousand Dollars
($5,000) for the period December 19, 2005 through December 31, 2005. This
initial $5,000 will be accrued and payable by June 30, 2006. BayHill Group also
has access to four (4) occasions per month of complementary Speaking Roses
products (to be provided by XXXX, not by franchisees) to help demonstrate and
promote the work we're all doing.
4. Equity Participation Rights. In addition to the Compensation set forth in
section 3.above, BayHill Group LC shall be granted five-year warrants to
purchase 1,200,000 shares of common stock, restricted stock awards, or similar
equity participation rights ("Equity Participation Rights") at an exercise price
of seventy five cents ($.75) per share. The Equity Participation Rights
agreement shall be drafted and executed as soon as practicable following the
execution of this Agreement and after approval of the Board of Directors. So
long as BayHill Group LC has completed the initial term of this Agreement, the
common warrants will vest and be exercisable at the end of four years from the
date of this agreement with accelerated vesting to occur based on completion (in
any combination that equals 100%) of the following milestones with you and your
team:
Stock price - 15 % vest for every doubling of the stock price from $.65
(sixty five cents) (cap at 2x or 30% of total vesting)
Liquidity - 5 % vest for every doubling of base 90 day volume. Starting
base volume calculated quarterly from October 1, 2005 - December 31, 2005 (total
90 day volume - 271 223 shares based on Nasdaq volumes)
(Cap at 4x for 20% of total vesting)
Internal Growth - 5% vest for every 0 xxx xxxxxxxx xxxx xxxxxxxxx
xxxxxxxxx , (xxx of 3x or 15% of total) where BayHill Group contributes to the
sourcing. The following states are excepted due to current negotiations already
underway, unless a new contracting party is targeted or BayHill is specifically
requested by Speaking Roses to assist: Utah / Nevada, California (Stoneridge),
Oregon (Xxxxx Xxxxxx), Colorado (Xxxxx Xxxxxx, Xxxxxxx), Idaho (laser machine
rep), and Florida (Xxxxx Xxxxxxxxx and Xxxxx Xxxx - USA Bouquet).
Compliance and Governance - 15% for full SOX compliance (earlier of
listing or major PIPE or regulatory deadline), (cap of 1x or 15% of total)
Acquisition Growth - 20% vest for every $10m in revenue acquired, (no
cap)
Funding - 20% for every new external funding round greater than
$1million completed, sourced by BayHill, unless otherwise invited by SR for
previous or current sourcing (no cap)
Term - 20% vest at the end of six (6) months
Speaking Roses agrees to register the shares of stock acquired by
BayHill Group LC. Speaking Roses also agrees that these shares will vest and be
exercisable and included 100% in any private or public transaction involving the
sale of any part of Speaking Roses.
2
5. Performance Commitment. Speaking Roses and BayHill Group LC agree that during
the Term of the Agreement, BayHill Group LC shall assist Speaking Roses in its
strategic planning and growth activities, raising capital, finding candidates to
acquire, and investor relations activities, as 5. requested.
6. Expense Reimbursement. Speaking Roses will reimburse all reasonable expenses
of BayHill Group LC incurred on behalf of Speaking Roses in connection with this
Agreement when invoiced. Reasonable professional expenses expected to exceed
$1,000 (for example, travel) in any specific month will be approved by Speaking
Roses in advance.
7. Indemnification.
In connection with BayHill Group LC providing services, as provided herein,
Speaking Roses agrees to indemnify and hold harmless BayHill Group LC, including
its members, officers, directors, stockholders, employees, agents and
representatives, against any and all losses, claims, damages, liabilities or
reasonable costs (including reasonable legal fees and expenses) directly or
indirectly, relating to or arising out of BayHill Group LC's activities on
behalf of Speaking Roses as provided herein, provided, however, such indemnity
agreement shall not apply to any such loss, claim, damage, liability or cost to
the extent it is found in a final judgment by a court of competent jurisdiction
to have resulted primarily and directly from the negligence or willful
misconduct of BayHill Group LC. Speaking Roses agrees that BayHill Group LC
shall not have any liability whether direct or indirect, in contract or
otherwise, to Speaking Roses for or in connection with the engagement of BayHill
Group LC as provided herein except for any such liability for losses, claims,
damages, liabilities or costs that is found in a final judgment by a court of
competent jurisdiction (not subject to further appeal) to have resulted
primarily and directly from BayHill Group LC's negligence or willful misconduct.
BayHill Group LC agrees to indemnify, defend and hold harmless Speaking Roses
and its affiliates and controlling persons and their respective officers,
managers, members, partners, directors, shareholders, employees, representatives
and agents (all such persons and entities being collectively referred to as the
"Indemnified Parties") from and against any and all actual losses, demands,
actions, causes of action, assessments, damages, liabilities, costs or expenses,
including without limitation interest, penalties, fines, fees, deficiencies,
claims of damage, court and arbitration costs and fees, and disbursements of
attorneys, accountants, consultants, and other experts as and when incurred or
sustained by any Indemnified Party as a result of or arising from any breach by
BayHill Group LC of paragraph 1.
8. Confidentiality.
a) Both parties to this Agreement agree to maintain all confidential
information (as defined below) regarding both this Agreement and any of the
information obtained as a result of this Agreement in strict confidence. Such
information may be shared with related professionals and those parties with a
specific need to know (collectively, "Representatives") provided sufficient
procedures are established to preserve confidentiality and all such persons are
made aware of this agreement and agree to keep such information confidential.
The parties desire to maintain the confidentiality of all Confidential
Information disclosed to the other party and to preserve for itself the
commercial benefits of the utilization of such information. "Confidential
Information" includes, without limitation, all information disclosed, directly
or indirectly, through any means of communication and/or observation, by or on
3
behalf of the disclosing party (the "Disclosing Party"): (i) concerning the
Disclosing Party's investments, liquidity, marketing activities, product
designs, proprietary software and/or tonic, administrative techniques, financial
condition, research and development, pricing, strategic plans, customers,
vendors, contractors, software, equipment, forecasts, personnel, wages, sales
organization, plant operations, and business operating initiatives; (ii) that is
similar to the items described in (i), but provided to Disclosing Party by, and
concerning, the existing or potential customers or vendors of Disclosing Party;
(iii) any other material or information that is non-public, confidential, or
proprietary in nature, (iv) extracts, conclusions from and summaries of such
material and information. Confidential Information does not include information
that is publicly available other than by acts or omissions of the recipient of
such information or its agents, representatives or employees in violation of
this Agreement. The receiving party hereby agrees that Confidential Information
will also include information that is not specifically encompassed in the
definition above, but that should reasonably be expected to be considered
confidential by the Disclosing Party.
b) Speaking Roses understands that, in rendering the Services required
hereunder, BayHill Group LC will be using and relying on publicly available
information and the information furnished to BayHill Group LC by Speaking Roses
without independent verification thereof. BayHill Group LC fully understands and
accepts its insider responsibility with regard to all non-public information
provided by Speaking Roses. BayHill Group LC agrees to abide by Speaking Roses'
policy and insider guidelines upon written receipt of such. BayHill Group LC
will treat as confidential any non-public information provided to it hereunder
and will not disclose the same to third parties at any time unless approved by
Speaking Roses or required by applicable law. In such event that disclosure of
Confidential Information is required to be made by BayHill Group LC, BayHill
Group LC will give Speaking Roses prompt notice thereof so that Speaking Roses
may seek an appropriate protective order or other appropriate remedy and/or
waive compliance with the provisions of this agreement (and if Speaking Roses
seeks such an order, BayHill Group LC will provide such cooperation as Speaking
Roses shall reasonably request). If, in the absence of a protective order,
BayHill Group LC is nonetheless legally compelled to disclose such Confidential
Information, BayHill Group LC will furnish only that portion of the Confidential
Information which BayHill Group LC reasonably believes it is legally required to
furnish; provided, however, that BayHill Group LC will give Speaking Roses
written notice of the information to be disclosed as far in advance of its
disclosure as is practicable and use its best efforts to obtain assurances that
confidential treatment will be accorded to such information. In addition,
BayHill Group LC will use its reasonable best efforts to comply with all
applicable state and federal securities laws in the performance of this
Agreement.
Upon a Disclosing Party's request, the recipient of Confidential
Information from such Disclosing Party will promptly return to the Disclosing
Party all copies (and shall retain no copies) of all Confidential Information
furnished to the recipient or the recipient's Representatives and will, at the
request of the Disclosing Party, destroy all analyses, compilations, summaries,
studies and other material prepared by the recipient or the recipient's
Representatives based in whole or in part on, or otherwise containing or
reflecting any of, the Confidential Information.
Notwithstanding any other provision of this Agreement, each party
agrees that money damages would not be a sufficient remedy for any breach of
this paragraph 7 by the recipient of Confidential Information from a Disclosing
Party (or any Representative of such recipient), and that, in addition to all
other remedies, any Disclosing Party shall be entitled to specific performance
and injunctive or other equitable relief as a remedy for any such breach, and
such recipient further agrees to waive (or cause any of its Representatives to
waive, if applicable) any requirement for the securing or posting of any bond in
connection with any such remedy.
9. Choice of Law and Jurisdiction. This Agreement shall be governed by and
construed in accordance with the laws of the State of Utah. The parties (i)
agree that any legal suit, action or proceeding arising out of or relating to
this Agreement shall be instituted exclusively in the federal or state courts
4
located in the State of Utah, (ii) waive any objection to the venue of such
suit, action or proceeding and the right to assert that such forum is not a
convenient forum, and (iii) irrevocably consent to the jurisdiction of any such
court in any suit, action or proceeding.
10. Relationship. The parties hereto do not intend this Agreement or the
relationship hereunder to constitute a joint venture or partnership of any kind.
The parties hereto agree that BayHill Group LC is an independent contractor in
performing the services hereunder and, as such, BayHill Group LC shall be the
sole employer of BayHill Group LC's employees. Under no circumstance shall one
party's employees be construed to be employees of the other party, nor shall one
party's employees be entitled to participate in the profit sharing, pension or
other plans established for the benefit of the other party's employees.
11. Entire Agreement. This Agreement, as amended from time to time, constitutes
the entire understanding between the parties hereto with respect to the subject
matter hereof and supersedes all negotiations, representations, prior
discussions and agreements (whether written or oral) between the parties
relating to the subject matter hereof. All Exhibits attached to this Agreement
are expressly made a part of this Agreement as though completely set forth in
it. The Agreement may not be amended or modified in any way except by a written
instrument signed by a duly authorized of officer of BayHill Group LC and
Speaking Roses. In executing this Agreement, each party acknowledges that it
does not rely on any inducements, promises or representations of the other party
or any agent of the other party, other than the terms and conditions
specifically set forth in this Agreement. The Agreement shall inure to and bind
the successors and assigns of the respective parties hereto.
12. Assignment. Except in conjunction with the sale of all or substantially all
of its assets, neither party hereto may sell or assign any of its rights or
delegate any of its duties or obligations under the terms of the Agreement
without the prior written consent of the other party, which consent shall not be
unreasonably withheld. No such permitted sale or assignment shall relieve either
party of its obligations under the Agreement.
13. Survivability of Obligations. Termination of this Agreement as provided
herein shall not relieve either Speaking Roses or BayHill Group LC of any
obligation arising hereunder prior to such termination.
14. Waiver. Any waiver by any party hereto of any breach of any kind or
character whatsoever by any other party, whether such waiver be direct or
implied, shall not be construed as a continuing waiver of, or consent to, any
subsequent breach of the Agreement on the part of the other party or parties. No
course of dealing or performance between the parties hereto, nor any delay in
exercising any rights or remedies hereunder or otherwise, shall operate as a
waiver of any of the rights or remedies of any party hereto.
15. Miscellaneous. If BayHill Group LC's employees are working on the premises
of Speaking Roses, BayHill Group LC's employees shall observe the working hours,
working rules and security procedures established by Speaking Roses.
16. Severability. In the event that any provision of this Agreement should he
declared illegal or unenforceable for any reason by any legally constituted
court or government authority, the remaining provisions shall not be invalidated
on account thereof and shall remain in full force and effect provided, however,
that if as a result of a declaration of illegality or unenforceability of a part
of this Agreement the essential purposes of this Agreement cannot be fulfilled,
the Agreement shall terminate forthwith, and all provisions of this Agreement
relating to or governing termination thereof shall come into effect.
17. Good Faith Dealings. The parties hereto shall deal with each other at all
times in good faith.
5
18. Counterparts.This Agreement may be executed in separate counterparts, and
all such counterparts will constitute one and the same instrument.
Signature page follows
6
January 6, 2006
If the foregoing confirms our agreement, kindly execute in the space
provided below.
Very truly yours,
BayHill Group LC
By: /s/Xxx Bench
Date: ______________________________
Agreed and Accepted:
Xxxx Xxxxxxxxxxxx, CEO and President
Speaking Roses
/s/Xxxx Xxxxxxxxxxxx
Date: _______________________________
7
