CONSULTING AGREEMENT
CONSULTING AGREEMENT made as of October 1, 2000, by and between Madison
Venture Capital II, Inc., a New York corporation with offices at 000 Xxxx 00xx
Xxxxxx - 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (hereinafter referred to as
"Consultant") and XXXX.xxx, Inc., Inc., a Delaware corporation with offices at
c/o Port Motors, 0000 Xxxxxxxx Xxxxxxxxx, Xxxxxx, Xxx Xxxx 00000 (hereinafter
referred to as the "Company").
WHEREAS, the Company desires to obtain the benefit of the services of
Consultant to provide the services hereinafter set forth during a five year
period commencing October 1, 2000 and ending September 30, 2005 at the rate of
compensation set forth herein; and
WHEREAS, Consultant desires to render such services to the Company;
NOW, THEREFORE, in consideration of the mutual covenants and conditions
herein contained and the acts herein described, it is agreed between the parties
as follows:
1. The Company hereby engages and retains Consultant and
Consultant hereby agrees to render services and advice to the Company, for a
five (5) year period commencing October 1, 2000 and ending September 30, 2005.
2. The services to be rendered by Consultant shall consist of
giving advice and opinions to the Company concerning, but not limited to,
consulting with management concerning the development of the business of the
Company and general business advice. Consultant may also seek and evaluate
acquisition candidates for the Company. Consultant shall have the sole
discretion as to the form, manner and place in which said advice shall be given
and the amount of time to be devoted to serve under this Agreement. Except as
provided hereinafter, an oral opinion by Consultant to the Company shall be
considered sufficient compliance with the requirements of this paragraph.
Consultant shall devote to the Company only such time as it may deem necessary,
and when reasonably requested by the Company, and shall not by this Agreement be
prevented or barred from rendering services of the same or similar nature, as
herein described, or services of any nature whatsoever for or on behalf of
persons, firms or corporations other than the Company. The Company recognizes
the Consultant provides services to other clients. The Company acknowledges that
it has already received substantial advice and services from the Consultant and
its beneficial owners.
3. The Company shall compensate the Consultant as follows:
(i) The payment of a fee of $1,000 by check on the first day of each
month during the term of this Agreement for the first four months and 2,000 by
check on the first day of each month during the balance of the term of this
Agreement;
(ii) In connection with any Merger or other Acquisition where the
acquired company was introduced to the Company by the Consultant payment, in
cash, upon the closing of the transaction (unless the Consultant and the Company
shall mutually agree to a payment other than in cash) based upon the value of
the transaction with any of the Company's securities being valued at their
market value at the time of the transaction based on the following formula:
(A) 5% of the first one million ($1,000,000) dollars of the value
of the transaction;
(B) 4% of the amount of the value of the transaction in excess of
one million ($1,000,000) dollars up to and including two
million ($2,000,000) dollars;
(C) 3% of the amount of the value of the transaction in excess of
two million ($2,000,000) dollars up to and including three
million ($3,000,000) dollars;
(D) 2% of the amount of the value of the transaction in excess of
three million ($3,000,000) dollars up to and including four
million ($4,000,000) dollars; and
(E) 1% of the amount of the value of the transaction in excess of
four million ($4,000,000) dollars.
The payment of fees under this sub-paragraph (ii) shall apply to any merger
or acquisition which is consummated with any party introduced to the Company be
the Consultant during the term of this Agreement or within two years thereafter.
For purposes of this Agreement, "Merger or Acquisition" means (A) any
transaction or series of transactions whereby, directly or indirectly, (i) 50%
of the assets, revenues or income of the Company or any of its subsidiaries or
affiliates or (ii) more than 50% of the capital stock of the Company or any of
its subsidiaries or affiliates is acquired, licensed or leased, with or without
a purchase option, by another party or parties or is transferred to another
party or parties in any manner, including by way of stock purchase, sale, or
exchange, merger, consolidation, reorganization, recapitalization, liquidation,
joint venture or partnership, minority investment, tender or exchange offer,
open market or negotiated purchase or any similar transaction or any combination
of the foregoing or (B) any transaction or series of transactions whereby,
directly or indirectly, (i) 50% of the assets, revenues or income of any other
entity or (ii) more than 50% of the capital stock of any other entity is
acquired, licensed or leased, with or without a purchase option, by the Company
or any of its subsidiaries or affiliates or is transferred to the Company or any
of its subsidiaries or affiliates in any manner, including by way of stock
purchase, sale, or exchange, merger, consolidation, reorganization,
recapitalization, liquidation, joint venture or partnership, minority
investment, tender or exchange offer, open market or negotiated purchase or any
similar transaction or any combination of the foregoing.
(iii) The Company shall reimburse the Consultant for any out-of-pocket
disbursements and expenses in connection with services rendered, upon submission
of substantiation therefore.
4. The Company agrees to indemnify and hold harmless Consultant,
its officers, directors, employees and agents and each person, if any who
controls the Consultant, against any and all loss, liability, claim, damage and
expense whatsoever (including but not limited to attorneys' fees and any and all
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expense whatsoever reasonably incurred in investigating, preparing or defending
against any litigation, commenced or threatened, or any claim whatsoever)
arising out of or based upon any untrue or alleged untrue statement of a
material fact contained (i) in any information provided to Consultant by the
Company or (ii) arising out of Consultant's services.
If any action is commenced against the Consultant or any of its officers,
directors, employees, agents or controlling persons (an indemnified party) in
respect of which indemnity may be sought against the Company pursuant to the
foregoing paragraph, such indemnified party or parties shall promptly notify the
indemnifying party in writing of the commencement of such action and the
indemnifying party shall assume the defense of such action, including the
employment of counsel (satisfactory to such indemnified party or parties) and
payment of expenses. Such indemnified party or parties shall have the right to
employ its or their own counsel in any such case but the fees and expenses of
such counsel shall be at the expense of such indemnified party in connection
with the defense of such action or the indemnifying party or parties unless the
employment of such counsel shall have been authorized in writing by the
indemnifying party in connection with the defense of such action or the
indemnifying party shall not have employed counsel to have charge of the defense
of such action or such indemnified party or parties shall have reasonably
concluded that there may be defenses available to it or them which are different
from or additional to those available to the indemnifying party (in which case
the indemnifying party shall not have the right to direct the defense of such
action on behalf of the indemnified party or parties), in any of which events
such fees and expenses shall be borne by the indemnifying party. Anything in
this paragraph to the contrary notwithstanding, the Company shall not be liable
for any settlement of any such claim or action effected without its written
consent. The Company agrees promptly to notify the Consultant of the
commencement of any litigation or proceeding against the Company or any of its
officers or directors in connection with any matter covered by the services to
be rendered by Consultant.
None of Consultant its officers, directors, employees, affiliates,
subsidiaries, agents or controlling persons shall have any liability to the
Company, its subsidiaries or affiliates or any person asserting a claim on
behalf of or in the right of the Company or its subsidiaries or affiliates in
connection with or as a result of Consultant's engagement hereunder or any
matter referred to herein, except to the extent that a loss, claim, liability,
damage or expense incurred by the Company or its subsidiary or affiliate is
finally determined by a court of competent jurisdiction to have resulted from
the gross negligence or willful misconduct or fraud of the person or entity
performing services hereunder. The Company, for itself and for anyone claiming
through it or in its name or on behalf of its security holders or other owners
irrevocably waives any right it may have to a trial by jury with respect to
relative to or arising under this Agreement or Consultant's engagement
hereunder. Without the prior written consent of Consultant, which shall not be
unreasonably withheld, the Company shall not settle, compromise, or consent to
the entry of a judgement in any pending or threatened claim, action or
proceeding if, following such event, indemnity against the Consultant or its
officers, directors, employees affiliates subsidiaries, agents, or controlling
persons may be sought.
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5. This instrument contains the entire agreement of the parties.
There are no representations or warranties other than as contained herein, and
there shall not be any liability to Consultant for any services rendered to the
Company pursuant to the terms of this Agreement. No waiver or modification
hereof shall be valid unless executed in writing with the same formalities as
this Agreement. Waiver of the breach of any term or condition of this Agreement
shall not be deemed a waiver of any other of subsequent breach, whether of like
or of a different nature.
6. This Agreement shall be construed according to the laws of the
State of New York as they are applied to agreements executed and to be performed
entirely within such State and shall be binding upon the parties hereto, their
successors and assigns.
IN WITNESS WHEREOF, the parties hereto have caused these presents to be
signed and their respective seals to be hereunto affixed the day and year first
above written.
Madison Venture Capital II, Inc.
By: /s/ XX. XXXXXX XXXXXXXX
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Xx. Xxxxxx Xxxxxxxx, President
XXXX.xxx, Inc.
By: /s/ XXXXX XXXXX
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Xxxxx Xxxxx, President
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