CONSULTING AGREEMENT
This Consulting Agreement is entered into on this 1st of March 2000, by
and between J Xxxx Consulting Corp. (hereinafter "Consultant"), with its
principal place of business at 0000 X. Xxxxxxxx Xxx, Xxxxx 000, Xxxxxxxxx,
Xxxxxxxx 00000 and PROform golf, inc.(hereinafter "Company"), with its principal
place of business at 0000 X. 00xx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx 00000.
RECITALS
1. The Company desires to use the services of the Consultant for introduction
and recommendation of the Company's business plan to members of the investment
community.
2. Consultant desires to provide such services upon the terms and conditions
hereof.
Now, therefore, in consideration of these promises of the mutual covenant and
agreements contained herein, the parties agree as follows:
AGREEMENT
1. ENGAGEMENT OF CONSULTANT. The Company hereby engages Consultant and
Consultant hereby agrees to render services to the Company as a consultant.
2. SERVICES. During the term of this Agreement, Consultant shall provide advice
to and consult with the Company concerning the Introduction of its Company's
business plan to the investment banking community. Consultant will provide the
Company on a best effort basis the following services:
a. Introduce the Company's business plan to various investment
banking firms and individual retail brokers.
b. Solicit and develop additional retail market makers for the
Company's Common Stock and the networking of their retail
brokers with the goal of developing a broad base of
shareholders.
c. Integrate and distribute corporate information to selected
brokerage investment banking.
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d. Co-ordinate broker-company due diligence meetings to open and
expand Company recognition in the public market place.
3. PERIOD OF PERFORMANCE. The period of performance under this Agreement
shall be for a primary term of six (6) months from the date hereof.
Either Party, upon receipt of a thirty- (30) day written notice, may
terminate this Agreement at the end of the three- (3) month's period.
4. COMPENSATION. As full consideration for the best effort performance of the
basic services described above, the Company shall pay Consultant compensation as
follows:
a. Cash: (i) $30,000 cash plus reasonable expenses. Said $30,000
shall be paid monthly in advance at the rate of $5,000 per
month. Initial payment for the first month shall be due at the
time this Agreement is signed. Following the initial payment,
ensuing payments are payable monthly in advance to
Consultant's principal place of business and are due upon the
15th of each month.
b. Expenses: Expenses are expected to be approximately $500 per
month for phones and postage. Expenses include, but are not
limited to, the following: travel and lodging; telephone, fax,
and other communications; fare of public carrier; photocopy
and printing; postage and special mailings. Consultant agrees
to obtain prior client approval for any single expense over
$500. Consultant shall submit a monthly invoice to the
Company, which covers the monthly fee and reimbursable
expenses. The Company also agrees to indemnify and pay
Consultant for all expenses committed to on behalf of the
Company prior to termination of this Agreement for any reason.
Expense due and payable upon receipt with a maximum of $5,000
in any particular month.
c. Warrants: Two separate Warrants to purchase the Company's
common stock shall be sold to the Consultant for $600 for A
Warrants and $600 for B Warrants. Consultant shall have
discretion to reassign to 3rd parties all warrants.
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(i) Warrant A - 600,000 Warrants, ("Warrants), each such Warrant
is immediately exercisable and entitles the consultant or the
holder thereof to purchase common stock of the Company as
described below at an exercise price of $2.00 per share (subject
to adjustment as provided herein) (the "Exercise Price"). Each
Warrant may be exercised from the date of this Agreement until
11:59 p.m. (Denver time) on the date that is 5 years after the
date of this Agreement (the "Expiration Date").
(ii) Warrant B - 600,000 Warrants ("Warrants"), each such Warrant
is immediately exercisable and entitles the Consultant or the
holder thereof to purchase common stock of Company as described
below at an exercise price of $3.00 per share (subject to
adjustment as provided herein) (the "Exercise Price"). Each
Warrant may be exercised from the date of this Agreement until
11:59 p.m. (Denver time) on the date that is 5 years after the
date of this Agreement (the "Expiration Date").
(iii) Securities Subject to Warrant: Subject to the provisions of
this Agreement, the holder of each Warrant shall have the right to
purchase from the Company, and the Company shall issue and sell to
each such holder, one fully paid and nonassessable share of common
stock of the Company's (the "Common Stock"). At present the shares
underlying the warrant are not free trading, but will have piggy
back registration rights as described below. Shares underlying the
Warrants will be free trading and will be registered.
(iv) Piggyback Registration Rights: If the Company at any time
after the date of this Agreement proposes to register any of its
securities under the Act, it will give written notice to all
holders of outstanding warrants of its intention to do so. Upon
the written request of a receipt of any such notice the Company
will use its best efforts to cause all such shares of Common Stock
to be registered under the Act.
5. ADJUSTMENTS TO WARRANTS The Exercise Price of each Warrant is subject to
adjustment from time to time as follows:
(a) If the Company is a party to a consolidation, merger or transfer of
assets which reclassifies or changes its outstanding Common Stock, the
successor corporation (or corporation controlling the successor
corporation or the Company, as the case may be) shall by operation of
law assume the Client's obligations under this Agreement.
(b) Upon consummation of such transaction the Warrants shall
automatically become exercisable for the kind and amount of
securities, case or other assets which the holder of a Warrant
would have owned immediately after the consolidation, merger
or transfer if the holder had exercised the Warrant
immediately before the effective date of such transaction.
6. CONVERSION. In lieu of exercising the Warrant on a cash basis, Holder may
from time to time convert this Warrant, in whole or in part, into a number of
shares determined by dividing (a) the aggregate Fair Market Value (determined on
the date of exercise) of the shares of the Company's Common Stock issuable upon
exercise of this Warrant minus the aggregate Warrant Price of such shares by (b)
the Fair Market Value (determined on the date of the exercise) of one share. For
purposes of this Section 6, "Fair Market Value (determined on the date of
exercise) of one share. For purposes of this Section 6, "Fair Market Value"
shall be the value determined in accordance with the following provisions:
(a) If the Common Stock is not at the time listed or admitted to
trading on any stock exchange but is traded on the Nasdaq National
Market System, the Fair Market Value shall be the closing selling price
per share of Common Stock on the date in question, as such price is
reported by the National Association of Securities Dealers through the
Nasdaq National Market System or any successor system. If there is no
closing selling price for the Common Stock on the date in question,
then the Fair Market Value shall be the closing selling price on the
last preceding date for which such quotation exists.
(b) If the Common Stock is at the time listed or admitted to trading on
any stock exchange, the Fair Market Value shall be the closing selling
price per share of Common Stock on the date in question on the stock
exchange determined by the Board of Directors of the Company to be the
primary market for the Common Stock, as such price is officially quoted
in the composite tape of transactions on such exchange. If there is no
closing selling price for the Common Stock on the date in question,
then the Fair Market Value shall be the closing selling price on the
last preceding date for which such quotation exists.
(c) If the Common stock is at the time neither listed nor admitted to
trading on any stock exchange nor traded on the Nasdaq National Market
System, then such Fair Market Value shall be determined by the Board of
Directors of the Company after taking into account such factors as the
Board of Directors of the Company shall deem appropriate.
7. CLIENT INFORMATION. Since Consultant must at all times rely upon the accuracy
and completeness of information supplied to it by the Company officers,
directors, agents, and employees, the Company agrees to indemnify, hold
harmless, and defend, Consultant, its officers, agents, and employees at the
Company's expense, in any proceeding or suit which may arise out of and/or due
to any inaccuracy or incompleteness of such material supplied by the Company to
Consultant.
8. DISCLOSURE AND CONFIDENTIALITY. The Company shall make available to the
Consultant data and other information reasonably necessary to enable Consultant
to perform its duties under the Agreement. The Consultant will not disclose to
any other person, nor use for its own benefit, any trade secrets or other
information designated as confidential by the Company which is acquired by the
Consultant in the course of performing services hereunder. A trade secret is
information not generally known to the trade that gives the Company an advantage
over its competitors. Trade secrets can include, by way of example, products
under development, production methods and processes, sources of supply,
marketing plans and information concerning the filing or pendency of patent
applications.
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9. DISCLAIMER OF RESPONSIBILITY FOR ACTS OF COMPANY. The obligations of the
Consultant described in this Agreement consist solely of the furnishing of
consulting services to the Company as an independent contractor. In no event
shall the Consultant be required by this Agreement to act as the agent of the
Company or its affiliates, whether or not made pursuant to or in reliance on
information or advice furnished by the Consultant hereunder, shall be those of
the Company or such affiliates and the Consultant shall under no circumstances
be liable for any expense incurred or loss suffered by the Company as a
consequence of such decisions.
10. INDEMNITY. The Company agrees to indemnify and hold the Consultant, its
affiliates, officers, employees and agents harmless from and against all losses,
claims, damages, liabilities, costs or expenses, (including reasonable
attorneys' fees and the cost of any of Consultant's personnel involved in any
such matter) arising out of the Consultant's entering into or performing under
this Agreement, including costs arising out of any dispute whether the
Consultant is a party to such dispute. This indemnity shall not apply, however,
where a court of competent jurisdiction has made a final determination that the
Consultant engaged in gross recklessness and/or willful misconduct in the
performance of consulting services hereunder which gave rise to loss or
liability sought to be recovered hereunder (but pending any such final
determination, the indemnification and reimbursement provisions of this
Agreement shall apply and the Company shall perform its obligations hereunder to
reimburse Consultant for its expenses).
The Consultant agrees to indemnify and hold the Company, its
affiliates, officers, employees and agents harmless from and against all losses,
claims, damages, liabilities, costs or expenses (including reasonable attorneys'
fees and the cost of any of the Company's personnel involved in such matter)
arising out of the Company's entering into or performing under this Agreement,
including costs arising out of any dispute whether the Company is a party to
such dispute. This indemnity shall not apply, however, where a court of
competent jurisdiction has made a final determination that the Company engaged
in gross recklessness and/or willful misconduct in the performance of its
obligations hereunder which any such final determination, the indemnification
reimbursement provisions of this Agreement shall apply and the consultant shall
perform its obligations hereunder to reimburse Company for its expenses).
11. ASSIGNABILITY. The Consultant understands that the Company has entered into
this Agreement based upon an expectation of the personal services of Xxxx Xxxxx
and his assignees and agrees that Xx. Xxxxx may assign his Warrants in whole or
in part to others.
12. MODIFICATION. Any modification of this Agreement or additional obligation
assumed by any party in connection with this Agreement shall be binding only if
signed by the party (or an authorized representative of the party) sought to be
bound by such Agreement.
13. WAIVER. No waiver of any provision of this Agreement shall be valid unless
such waiver is in writing and signed by the person or party against whom
charged.
14. ENFORCEMENT. This Agreement shall be subject to and governed by the laws of
the State of Colorado and any disputes regarding this Agreement shall be
resolved in the courts located in the State of Colorado.
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15. SEVERABILITY. The invalidity or unenforceability of any provision of this
Agreement shall not affect the other provision hereof, and this Agreement shall
be construed as if such invalid or unenforceable provision were omitted.
16. ENTIRE AGREEMENT. This Agreement shall constitute the entire Agreement
between the parties and any prior understanding or representation of any kind
preceding the date of this Agreement shall not be binding upon either party
except to the extent it is incorporated in this Agreement by mutual written
consent of the parties.
IN WITNESS WHEREOF, each party to the Agreement has caused it to be
executed in Denver, Colorado on the date(s) indicated below.
PROform golf, inc. J XXXX CONSULTING CORP.
XXXXXXX X. XXXXX XXXX X. XXXX
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Name Name
PRESIDENT PRESIDENT
--------------------------------- ----------------------------------------
Title Title
/S/ XXXXXXX X. XXXXX /S/ XXXX X. XXXX
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Signature Signature
3/1/00 3/1/00
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Date Date
/S/ XXXXXXXX XXXX XXXXXX /S/ XXXXXXXX XXXX XXXXXX
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Witness Witness
