CONSULTING AGREEMENT
THIS
AGREEMENT is made as of this 1st
day of
August, 2007.
BETWEEN:
CUSTOMER
ACQUISITION NETWORK, INC.,
a
Delaware corporation, with an address of 000 Xxxxx Xxxxxxx Xxxxxxx, Xxxxx
000,
Xxxx Xxxxx, Xxxxxxx 00000
(hereinafter
called the “Company”)
OF
THE
FIRST PART
AND:
XXXXXXX
XXXXXX AND COMPANY, INC.,
a
California corporation, with and address of 0000 Xxxxx Xxxx Xxxx., Xxxxx 000,
Xx
Xxxxxx, Xxxxxxxxxx, 00000, X.X.X.
(hereinafter
called the “Consultant”)
OF
THE
SECOND PART
WHEREAS:
A. The
Consultant is a firm carrying on the business of providing national media
consulting services and financial community investor relations consulting
services for emerging companies of merit;
B. The
Company is desirous of retaining the consulting services of the Consultant
on a
fixed term basis and the Consultant has agreed to serve the Company as an
independent contractor upon the terms and conditions herewith set
forth;
FOR
VALUABLE CONSIDERATION it is hereby agreed as follows:
1. The
Consultant shall provide media consulting services to the company, such duties
to include news
feature development, establishing relations with financial advisory newsletter
writers and with other trade and advertising media interested in the Company
and
its innovative Internet-based services and revenue-generation
approaches.
The
Consultant shall also provide an investor relations program of communications
to
the U.S. institutional, brokerage and retail investor publics. In each case
the
Consultant’s activities shall be performed under the supervision of and with the
prior approval of the Company. Unless otherwise notified, the Consultant’s
activities shall be subject to the direction and approval of the Chief Financial
Officer of the Company. Additionally, the Consultant shall upon request of
the
Company consult and advise the Company on a variety of corporate matters on
an
on-going basis, as these may relate to the above programs.
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2. The
Company may provide to Consultant copies of proposed Company literature prior
to
the dissemination of such literature to third parties. The Consultant shall
not
disseminate any Company materials or documents, shall not provide any
third-party any information concerning the Company, nor utilize such materials
for its own purposes, without the prior written approval of the Company.
Consultant shall in all of its activities publish and provide suitable
disclaimers as to the Consultants’ and affiliates’ stock ownership in the
Company and other interests that could be viewed as a conflict of interest,
and
shall comply in all respects with all federal and state rules and regulations
and best practices concerning notice and publication of
disclaimers.
3. The
term
of this Agreement shall be for a period of twelve (12) months from the date
of
this Agreement.
4. The
fees
for services shall be computed at a monthly rate of US
$7,000.00 (Seven Thousand Dollars in lawful United States currency), with the
first installment payable upon the signing of this contract, and each subsequent
monthly fee component being payable promptly in subsequent 30-day intervals.
Consultant acknowledges that Company is not presently publicly reporting, or
quoted or traded on any public securities market or quotation service. Effective
as of the date of the Company’s combination with a company that is publicly
reporting, or quoted or traded on a public securities market or quotation
service, the Company shall cause this Agreement to be assumed by such public
company, and the Company shall be released from all obligations hereunder.
Furthermore, such public company shall issue to Consultant a five-year warrant
exercisable for 500,000 shares of common stock of the public company,
exercisable at $2.00 per share in such form and with such terms as are approved
by the board of directors of the public company. No warrants shall be issued
or
issuable by the Company unless the company during the Term shall combine with
or
itself become a publicly reporting company required to file statements and
reports with the Securities and Exchange Commission under the federal securities
laws.
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5. The
Consultant shall be responsible for the payment of its income taxes as shall
be
required by any governmental entity with respect to compensation paid by the
Company to the Consultant.
6. During
the term of this Agreement, the Consultant shall provide its services to the
Company through Xxxxxxx Xxxxxx and through Xxxxxx Xxxxxx, and the Consultant
shall ensure that Xxxxxxx Xxxxxx and/or Xxxxxx Xxxxxx will be available to
provide such services to the Company in a timely manner subject to their
availability at the time of the request.
7. The
Consultant shall not, either during the continuance of its contract hereunder
or
any time thereafter, disclose the private affairs of the Company and/or its
subsidiary or subsidiaries, or affiliates or any secrets of the Company and/or
its subsidiary or subsidiaries or affiliates, to any person (directly or
indirectly) whether or not to the detriment of the Company and shall not (either
during the continuance of its contract hereunder or any time thereafter) use
any
information it may acquire in relation to the business and affairs of the
Company and/or its subsidiary or subsidiaries for its own benefit or purposes
(directly or indirectly), or for any purpose other than those of the Company
as
more particularly described in paragraph 1 above.
8. Consultant
shall xxxx all expenses that are approved in advance by the Company for routine
communications, including phone, postage, fax, etc., on an itemized and
documented basis. For material expenses exceeding in any single instance US
$600
for any dissemination or distribution programs or related expenses, specific
approval shall be sought in writing prior to incurring such expenses, and these
will be paid in advance by Company prior to being incurred.
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9. The
Company agrees to indemnify and save the Consultant harmless from any loss,
costs or expenses incurred as a result of or arising out of the Consultant’s
dissemination or publication of any documents or literature approved in writing
by the Company in accordance with the provisions of paragraph 2 of this
Agreement provided Consultant is not in breach of any of its agreements herein,
in the event that it is established by a Court of competent jurisdiction that
such materials contain material misrepresentations or false or misleading
information, or omit to state a material fact necessary to prevent a statement
that is made from being false or misleading.
10. The
Consultant shall well and faithfully serve the Company or any subsidiary as
aforesaid during the continuance of its engagement hereunder and use its best
efforts to promote the interests of the Company.
11. This
Agreement may be terminated by the Company without prior notice if at any
time:
(a) The
Consultant shall commit any breach of any of the provisions herein
contained;
(b) The
Consultant shall be guilty of any misconduct or neglect in the discharge
of its duties hereunder;
(c) The
Consultant shall become bankrupt or make any arrangements or
composition with its creditors; or
(d) Xxxxxxx
Xxxxxx shall become unavailable or fail to follow the directions of the Company
or become of unsound mind or be declared incompetent
to handle his own personal affairs;
(e)
On
thirty
(30) days prior written notice to Consultant (provided if such termination
shall
be prior to payment of at lease 6 months of monthly payments hereunder,
upon
such termination the balance of any remaining monthly payment shall be
paid in
full for the balance of the 6 months period remaining).
12. The
Company is aware that the Consultant has now and will continue to have business
interests in other companies and the Company recognizes that these companies
will require a certain portion of the Consultant’s time. The Company agrees that
the Consultant may continue to devote time to such outside interests, PROVIDED
THAT such interests do not conflict with, in any way, the time required for
the
Consultant to perform its duties under this Agreement.
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13. The
services to be performed by the Consultant pursuant hereto are personal in
character, and neither this Agreement nor any rights or benefits arising
thereunder are assignable by the Consultant without the prior written consent
of
the Company.
14. Any
notice in writing or permitted to be given to the Consultant hereunder shall
be
sufficiently given if delivered to the Consultant personally or mailed by
registered mail, postage prepaid, addressed to the Consultant at its last
business address known to the Secretary of the Company. Any such notice mailed
as aforesaid shall be deemed to have been received by the Consultant on the
first business day following the date of the mailing. Any notice in writing
required or permitted to be given to the Company hereunder shall be given by
registered mail, postage prepaid, addressed to the Company at the address shown
on page 1 hereof. Any such notice mailed as aforesaid shall be deemed to have
been received by the Company on the first business day following the date of
mailing. Any such address for the giving of notices hereunder may be changed
by
notice in writing given hereunder.
15. The
provisions of this Agreement shall inure to the benefit of and be binding upon
the Consultant and the successors and assigns of the Company. For this purpose,
the terms “successors” and “assigns” shall include any person, firm or
corporation or other entity which at any time, whether by merger, purchase
or
otherwise, shall acquire all or substantially all of the assets or business
of
the Company.
16. This
Agreement shall be construed and enforced in accordance with the internal laws
of the State of Delaware without reference to principles of conflicts of laws,
and the rights of the parties shall be governed by, the laws of that State.
This
Agreement may not be changed orally, but only by an instrument in writing signed
by the party against whom or which enforcement of any waiver, change,
modification or discharge is sought. Any action brought for the purpose of
enforcing any provision of this Agreement shall be brought in New York, New
York.
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17. Broker
or Dealer; Investment Advisor Status.
Consultant is not (i) a registered “broker” (“Broker”)
or
“dealer” (“Dealer”)
as
such terms are defined in Section 3(a)(4) and 3(a)(5) of the Securities Exchange
Act of 1934, as amended (the “Exchange
Act”),
or
(ii) an investment adviser (“Investment
Advisor”),
as
such term is defined in Section 202(a)(11) of the Investment Advisors Act of
1940, as amended, and will not act to effect any transactions in securities
for
the account of Company. With respect thereto and notwithstanding anything set
forth herein to the contrary, Consultant shall not carry out any activity or
function that (i) may be traditionally performed by or otherwise be deemed
to
include those of (A) a Broker, Dealer or Investment Adviser or (ii) would
require Consultant to register itself as a Broker, Dealer, or Investment
Advisor. In particular, Consultant shall not do, cause to be done or otherwise
participate, directly or indirectly, in any of the following on behalf of
Company: (a) participate in the negotiation of terms and conditions of the
sale
and purchase of any securities of Company; (b) assist Company in the
distribution of materials relating to the sale of any securities of Company;
(c)
prepare any analysis or provide any advice to any potential investors regarding
the benefits or potential return relating to the purchase of any securities
of
Company; (d) directly assist Company or any prospective investor of securities
of Company with the completion of a transaction; (e) facilitate the sale,
exchange or transfer of securities of Company or any handling of any funds
received from the potential investors for any securities of Company, (f) discuss
the details of a proposed transaction with a potential investor, or (g) make
recommendations to a potential investor with respect to a transaction.
Consultant will abide by all laws, rules and regulations applicable to
Consultant’s activities.
18. Registration
of Securities.
If, at
any time or from time to time, Company shall determine to register any of its
equity securities, either for its own account or the account of a stockholder,
Company shall promptly (but in no event less than thirty (30) days prior to
registration) give Consultant written notice thereof; and shall include in
such
registration (and any related qualifications including compliance with Blue
Sky
laws), and in any underwriting involved therein, all shares of common stock
held
by Consultant upon exercise of the Warrant or underlying any unexercised
Warrants that Consultant may hold, as specified in a written response(s) by
Consultant, made within twenty (20) days after receipt of the written notice
of
registration from Company. For ease of reference, this clause is to be construed
as granting Consultant piggyback registration rights in conjunction with any
securities that the company may wish to register. Notwithstanding
any other provision of this Agreement to the contrary, if the registration
by
Company is for a registered public offering and the managing underwriter or
placement agent determines that marketing factors require a limitation of the
number of shares to be underwritten, the percentage of shares of securities
to
be registered for sale by Consultant shall be equally reduced with all other
shares of third-parties entitled to participate in such registration. If the
registration by Company is for a registered public offering, Consultant agrees
that it shall (a) not effect any public sale or distribution (including sales
pursuant to Rule 144) of equity securities of Company or any securities
convertible into or exchangeable or exercisable for such securities and (b)
provide upon request, customary lock-up agreements for itself and its affiliates
by which they agree not to sell any of their shares of common stock for a period
of 180 days from the effective date of the registration statement, or for such
other length of time determined by the managing underwriter. Following
registration of Consultant’s shares issued or issuable under the Warrants,
Consultant agrees not to sell or offer for sale more than 50,000 shares in
any
30 consecutive day period, inclusive of all shares of common stock sold or
offered for sale by Consultant in reliance upon any exemption from registration,
such as Rule 144 under the Securities Act of 1933, as amended.
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IN
WITNESS WHEREOF this Agreement has been executed as of the day, month and year
first above written.
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CUSTOMER
ACQUISITION
|
) | |
| NETWORK, INC. | ) | |
| ) | ||
| ) | ||
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per:
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) |
Authorized Signatory |
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Date |
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SIGNED,
SEALED AND DELIVERED by
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| XXXXXXX XXXXXX AND | ) | |
| COMPANY, INC. by its authorized ) | ||
| signatory in the presence of ) | XXXXXXX XXXXXX AND | |
| ) |
AND
COMPANY, INC.
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| ) | ||
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per:
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Signature of Witness ) |
Authorized Signatory |
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) | |
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Address of Witness |
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Date |
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