CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (the "Agreement") dated as of May 4, 1999
between Pre-Cell Solutions, Inc., a Colorado corporation (the "Company"), and
Xxxxx X. Xxxxxxxxxxx (the "Consultant").
RECITALS:
WHEREAS, the Company is in the business of providing prepaid
telecommunications services; and
WHEREAS, the Consultant has experience in senior financial management
advisory services in the areas of operational accounting and corporate finance,
including but not limited to, operational accounting systems, generally accepted
accounting principals (GAAP) and Federal Acquisition Regulations ("FAR")
accounting and cost compliant systems, audit quality financial reporting
systems, merger and acquisition support and Securities and Exchange Commission
("SEC") compliance; and
WHEREAS, the Company desires to retain the Consultant and the
Consultant desires to be retained by the Company, subject to the terms and
conditions contained in this Agreement;
NOW, THEREFORE, in consideration of the mutual promises and covenants
set forth in this Agreement, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
1. Recitals. the above recitals are true and correct and are
incorporated into this Agreement by this reference.
2. Term. Subject to the terms and conditions contained in this
Agreement, the Company agrees to retain the Consultant and the Consultant agrees
to perform the Duties, agreements and covenants described herein. The term (the
"Term") of this Agreement shall begin on the date and year first above written
and shall continue in full force and effect until December 31, 1999, or until
the completion of the Duties.
3. Duties. During the term of this Agreement, the Consultant agrees to
(i) provide all necessary internal accounting support to Xxxxxx & Xxxxx, the
Company's independent public accountants, in the preparation of the audited
financial statements of the Company for the fiscal years ended April 30, 1997,
1998 and 1999; (ii) support the Company's attorney in the preparation of the
Company's Form-10K filings to the SEC for the periods of April 30, 1996, 1997,
1998 and 1999; (iii) prepare the Company's Form-10Q filings to the SEC for each
of the quarterly periods of the Company's fiscal years ended April 30, 1996,
1997, 1998, 1999 and 2000; and (iv) support or prepare any other filings
determined necessary for the Company to be current with its SEC disclosures.
4. Compensation and Related Matters.
(a) Consulting Fee. During the term of this Agreement
Consultant shall be paid consulting fee (the "Consulting Fee") equal to $150.00
per hour. The Consultant shall invoice the Company weekly detailing time spent
in connection with the performance of the Duties. The weekly invoices will be
accrued on the books of the Company. Upon the completion of the Duties, or at
earlier intervals mutually agreed on between the Company and the Consultant, the
Company will pay the balance of all invoiced and unpaid amounts in cash or
common stock of the Company as provided for below.
(b) Common stock payment. The number of shares of common stock
to be issued to the Consultant in connection with payment of the consulting fees
owed will be computed based on at price per share of $ 0.10, determined to be
the market price at the time of this agreement.
(c) Business Expenses. The Company agrees to reimburse the
Consultant for reasonable business
expenses incurred by the Consultant on behalf of the Company. Reimbursement
shall be made upon presentation to the Company of documenting evidence any such
expenditure.
5. Consultant's Independent Relationship. This agreement does not
constitute the Consultant as the agent or legal representative of the Company,
and the Company shall not be responsible in any way for any obligation or
liability incurred or assumed by Consultant. Consultant represents that he is
now, and agrees that he will continue during the term of this agreement to be an
independent enterprise within the meaning and requirements of any laws and
regulations of Florida and the United States, including without limitation those
laws and regulations pertaining to labor and tax matters. Consultant shall not
be deemed in any event to be the employee, agent or servant of the Company, or
person acting in a similar capacity, and accordingly, Consultant shall not be
entitled to any benefits which may be provided to employees, agents or servants,
or persons acting in similar capacities, under the laws or regulations of
Florida and the United States.
6. Payment of Taxes. Consultant shall be liable for and shall pay, and
indemnify, defend and hold Company harmless from, any and all federal, state and
local taxes and payments (including, but not limited to, income withholding,
sales, payroll, benefits and profit sharing taxes and payments, if any) assessed
or payable on any and all compensation and other monies paid to Consultant or
arising out of or related to Consultant's services in connection therewith.
Company will not withhold taxes or contributions on the amount paid to
Consultant under this agreement; however, the Company will report the amount
paid to Consultant to the Internal Revenue service on Form 1099.
7. Termination.
(a) Termination by the Company. This Agreement may be
terminated by the Company prior to the expiration of the Term set forth in
Section 2 above as follows:
(i) Death. This Agreement shall terminate upon the
death of Consultant and the Company shall have no further obligation under this
Agreement to make any payments to, or bestow any benefits on, the Consultant
from and after the date of Consultant's death, other than payments or benefits
accrued and due and payable to Consultant prior to the date of Consultant's
death.
(ii) Disability. This Agreement shall terminate if as
a result of Consultant's incapacity due to accident or illness, Consultant shall
have been unable to satisfactorily perform Consultant's Duties under this
Agreement for a period of thirty consecutive days, or for an aggregate of
forty-five days in any consecutive three-month period. In the event of a
termination due to disability under this Section, the Company shall have no
further obligation under this Agreement to make any payments to, or bestow any
benefits on, Consultant from and after the date of the termination, other than
payments or benefits accrued and due and payable to him prior to the date of
termination pursuant to this Agreement.
(iii) Cause. The Company may terminate this Agreement
for Cause at any time. For purposes of this Agreement, the Company shall have
"Cause" to terminate this Agreement if Consultant (1) engages in common law
fraud in his relations with the Company or any of its subsidiaries or
affiliates, or with any customer or business contact of the Company or any of
its subsidiaries or affiliates; (2) engages in misconduct materially injurious
to the Company; (3) materially breaches any of the provisions of this Agreement;
or (4) is convicted of any crime involving an act of moral turpitude. In the
event of a termination for Cause, the Company shall have no further obligation
under this Agreement to make any payments to, or bestow any benefits on, the
Consultant from and after the date of the termination, other than payments
accrued and due and payable to it prior to the date of termination.
Notwithstanding the foregoing, no "cause" for termination shall be deemed to
exist with respect to Consultant's acts described in clauses (2) and (3) above,
unless the Company shall have given written notice to Consultant specifying the
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"cause" with reasonable particularity and, within ten business days after such
notice, Consultant shall not have cured or eliminated the problem or thing
giving rise to such "cause."
(b) Termination by Consultant. This Agreement may be
terminated by the Consultant prior to the expiration of the Term set forth in
Section 2 above if the Company breaches a material provision of this Agreement
and the Company fails to cure such breach within ten (10) business days after
the Company's receipt of written notice from Consultant of such breach.
8. Trade Secrets and Confidential Information.
(a) The Consultant acknowledges that the Company's business
depends to a significant degree upon the possession of information which is not
generally known to others, and that the profitability of the Company's business
requires that this information remain confidential to the Company.
(b) The Consultant shall not, except as required in the course
of representing the Company, disclose or use during or subsequent to the term of
this Agreement, any confidential information relating to the Company's business.
Such information includes, but is not limited to, lists of existing or potential
customers, data, records, computer programs, manuals, processes, methods and
intangible rights which are either developed by the Consultant during the Term
or to which the Consultant has access because of its retention hereunder. All
records and equipment and other materials relating in any way to any
confidential information relating to property owners or to the Company's
business shall be and remain the Company's sole property during and after the
Term.
(c) Upon termination of engagement, the Consultant shall
promptly return to the Company all materials and all copies of materials
involving any confidential information in the Consultant's possession or
control. The Consultant agrees to represent to the Company that it has complied
with the provisions of this Section 8(c) upon termination of this Agreement.
(d) Notwithstanding the foregoing, the parties acknowledge and
agree that for purposes of this Section 8 "confidential information" shall not
include information, which becomes generally available to the public other than
as a result of unauthorized disclosure by Consultant.
9. Indemnification.
(a) The Company shall indemnify and hold Consultant harmless
during the term of this Agreement and for a period of twelve months after this
Agreement against judgments, fines, amounts paid in settlement and reasonable
expenses, including reasonable attorneys' fees incurred by Consultant in
connection with the defense of, or as the result of any action or proceeding (or
appeal therefrom) in which Consultant is made a party solely because Consultant
is or was a Consultant to the Company; provided, however, the Company shall not
indemnify and hold Consultant harmless for Consultant's own acts or omissions or
Consultant's negligence or willful misconduct.
(b) Consultant shall indemnify and hold the Company harmless
to the maximum extent permitted by law during the term of this Agreement and for
a period of twelve months after this Agreement against judgments, fines, amounts
paid in settlement and reasonable expenses, including reasonable attorneys' fees
incurred by the Company in connection with (i) any breach of this Agreement and
(ii) any misrepresentation contained in this Agreement by Consultant.
10. Mergers and Consolidation; Assignability. If the Company or any
entity resulting from any merger or consolidation referred to in this Section is
merged or consolidated into or with any other entity or entities, or if
substantially all of the assets of the Company or any such entity are sold or
otherwise transferred to another entity, the provisions of this Agreement shall
be binding upon and shall inure to the benefit of the continuing entity in or
the entity resulting from such merger or consolidation or the entity to
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which such assets are sold or transferred. Except as provided in the immediately
preceding sentence, this Agreement shall not be assignable by the Consultant.
11. Representations and Warranties. Consultant hereby represents and
warrants that by entering into this Agreement and performing the services and
duties required hereunder for the Company, Consultant is not and will not be
interfering with, violating, or in conflict with any agreement, commitment,
promise, duty, obligation or representation by which Consultant or any of its
subsidiaries, agents or affiliates are bound, including without limitation, (i)
any obligation to maintain confidentiality of any information acquired by
Consultant, its agents, affiliates or subsidiaries prior to or outside of this
Agreement, (ii) any obligation to refrain from competing with any present or
former client or employer of Consultant, its agents, subsidiaries, affiliates or
other third party. Consultant represents and warrants that Consultant will not
use in performing services for the Company any materials, documents or
information of a present or former employer or other third party that are not
generally available to the public, or that were not learned or received by
Consultant on a non-confidential basis from a party lawfully entitled to possess
and disclose such information, unless written authorization has been obtained
from the owner for such possession and use. Consultant further represents and
warrants that Consultant has not entered into and will not enter into any oral
or written agreement which in any way is or will be in conflict with this
Agreement.
12. Miscellaneous.
(a) The captions in this Agreement are not part of its
provisions, are merely for reference and have no force or effect. If any caption
is inconsistent with any provision of this Agreement, such provision shall
govern.
(b) This Agreement is made in and shall be governed by and
construed in accordance with the laws of the State of Florida, without giving
effect to conflict of law principles.
(c) To the extent that the terms set forth in this Agreement
or any word, phrase, clause or sentence is found to be illegal or unenforceable
for any reason, such word, phrase, clause or sentence shall be modified or
deleted in such manner so as to afford the Company the fullest protection
commensurate with making this Agreement, as modified, legal and enforceable
under applicable laws, and the balance of this Agreement shall not be affected
thereby, the balance being construed as severable and independent.
(d) All notices given under this Agreement shall be in writing
and shall be delivered by hand or reputable overnight courier and, if intended
for the Company, shall be addressed to it 000 Xxxx Xxxxx, Xxxxx X, Xxxxxxxxx,
Xxxxxxx, 00000. If intended for the Consultant, notices shall be delivered by
hand or reputable overnight courier to the Consultant's then current home
address as shown on the Company's records, or to such other address as the
Consultant directs in a notice to the Company. All notices shall be deemed to be
given on the date received at the address of the addressee or, if delivered
personally, on the date delivered.
(e) As used in this Agreement where appropriate, the masculine
shall include the feminine; where appropriate, the singular shall include the
plural and the plural shall include the singular.
(f) This Agreement contains all obligations and understandings
between the parties relating to the subject of this Agreement and supersedes all
prior discussions, negotiations and agreements, whether in writing or otherwise,
if any, between them, and none of the parties shall be bound by any conditions,
definitions, understandings, warranties or representations other than as
expressly provided or referred to in this Agreement. This Agreement is intended
to cancel and supersede all existing agreements between the Consultant and the
Company.
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(g) This Agreement may be modified only by a written
instrument properly executed by the parties to this Agreement.
(h) No waiver by any party to this Agreement, whether
expressed or implied, of its rights under any provision of this Agreement shall
constitute a waiver of the party's rights under the provisions at any other time
or a waiver of the party's rights under any other provision of this Agreement.
(i) The Consultant and the Company agree that the prevailing
party in any action to enforce any breach of any covenant or term in this
Agreement shall be reimbursed by the other party for all expenses and reasonable
attorneys' fees incurred by that party to enforce this Agreement.
IN WITNESS WHEREOF, the parties to this Agreement have executed this
Agreement as of the day and year first above written.
PRE-CELL SOLUTIONS, INC.
By: /s/ Xxxxxx X. Xxxxxx
------------------------
Xxxxxx X. Xxxxxx
President and CEO
CONSULTANT
/s/ Xxxxx X. Xxxxxxxxxxx
------------------------
Xxxxx X. Xxxxxxxxxxx
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