CONSULTING AGREEMENT
EXHIBIT
10.1
This
Consulting Agreement (the “Agreement”),
effective as of June 1, 2006, is entered into by and between Wits Basin Precious
Minerals Inc., a Minnesota corporation (herein referred to as the “Company”),
and
Boston Financial Partners, Inc., a Massachusetts corporation (herein referred
to
as the “Consultant”).
WHEREAS,
Company
is a publicly-held corporation with its common stock traded on the National
Association of Securities Dealers’ Over-the-Counter Bulletin Board, or OTCBB,
under the symbol WITM; and
WHEREAS,
Company
desires to engage the non-exclusive services of Consultant to represent the
Company in investors communications and public relations with existing
shareholders, brokers, dealers and other investment professionals as to the
Company’s current and proposed activities, and to consult with management
concerning such Company activities.
NOW
THEREFORE,
in
consideration of the promises and the mutual covenants and agreements
hereinafter set forth, the parties hereto covenant and agree as
follows:
1. Duties
of Consultant.
The
Consultant agrees that it will generally provide the following specified
consulting services through its officers, employees and affiliates during the
term specified in Section 2:
(a) Introduce
the Company to the financial community;
(b) Assist
and consult the Company in developing and implementing appropriate plans and
means for presenting the Company and its business plans, strategy and personnel
to the financial community, establishing an image for the Company in the
financial community, and creating the foundation for subsequent financial public
relations efforts;
(c) Assist
and consult the Company with respect to its (i) relations with stockholders,
(ii) relations with brokers, dealers, analysts and other investment
professionals, and (iii) financial public relations generally;
(d) With
the
cooperation of the Company, maintain an awareness during the term of this
Agreement of the Company’s plans, strategy and personnel, as they may evolve
during such period, and consult and assist the Company in communicating
appropriate information regarding such plans, strategy and personnel to the
financial community;
(e) Perform
the functions generally assigned to stockholder relations and public relations
departments in major corporations, including responding to telephone and written
inquiries (which may be referred to the Consultant by the Company); preparing
press releases for the Company with the
Company’s involvement and approval of press releases, reports and other
communications with or to shareholders, the investment community and the general
public; consulting with respect to the timing, form, distribution and other
matters related to such releases, reports and communications; and, at the
Company’s request and subject to the Company’s securing its own rights to the
use of its names, marks, and logos, consulting with respect to corporate
symbols, logos, names, the presentation of such symbols, logos and names, and
other matters relating to corporate image;
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(f) Upon
the
Company’s direction and approval, disseminate information regarding the Company
to shareholders, brokers, dealers, other investment community professionals
and
the general investing public;
(g) Upon
the
Company’s approval, conduct meetings, in person or by telephone, with brokers,
dealers, analysts and other investment professionals to communicate with them
regarding the Company’s plans, goals and activities, and assist the Company in
preparing for press conferences and other forums involving the media, investment
professionals and the general investment public;
(h) At
the
Company’s request, review business plans, strategies, mission statements
budgets, proposed transactions and other plans for the purpose of advising
the
Company of the public relations implications thereof; and
(i) Otherwise
perform as the Company’s consultant for public relations and relations with
financial professionals.
2. Term;
Termination Provision.
2.1 Term.
Unless
terminated by the Company pursuant to Section 2.2 hereof, the term of this
Agreement shall be for the calendar year ending December 31, 2006.
2.2 Termination
by the Company. The
Company may elect to terminate this Agreement upon at least ten-day (10) written
notice of termination to Consultant, specifying an effective date for such
termination.
3. Remuneration.
As full
and complete compensation for services described in this Agreement, the Company
shall compensate Consultant as follows:
3.1 For
undertaking this engagement and for other good and valuable consideration,
the
Company agrees to pay a one-time fee of One Hundred Thousand ($100,000).
3.2 The
Company agrees to issue to the Consultant Six Hundred Twenty-Five Thousand
(625,000) shares of the Company's unregistered common stock (the “Shares”)
to be
delivered to Consultant within twenty (20) business days of the signing of
this
Agreement and shall, when issued and delivered to Consultant, be fully paid
and
non-assessable. The Shares constitute payment for Consultant’s agreement to
consult the Company and is a non-refundable, non-apportionable, and non-ratable
retainer; and not deemed a prepayment for future services. If the Company
decides to terminate this Agreement for any reason whatsoever, it is agreed
and
understood that Consultant will not be requested or demanded by the Company
to
return any of the Shares hereunder.
3.3 Additionally,
the Company shall grant to the Consultant a warrant to purchase up to an
aggregate of One Million (1,000,000) shares of the Company’s $0.01 par value
common stock, at an exercise price of $0.62 per share, with an expiration date
of May 30, 2008 (the “Warrants”).
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3.4 The
Company warrants that the Shares and the Warrants (hereafter collectively
referred to as the “Securities”)
issued
to Consultant pursuant to this Agreement shall have been duly authorized by
the
Company’s board of directors
3.5 The
Consultant acknowledges that the Securities issued pursuant to this Agreement
have not been registered under the Securities Act of 1933, and accordingly
are
“restricted securities” within the meaning of Rule 144 of the Act. As such, the
Securities may not be resold or transferred unless the Company has received
an
opinion of counsel reasonably satisfactory to the Company that such resale
or
transfer is exempt from the registration requirements of that Act. The Company
shall not unreasonably withhold approval of any application filed by Consultant
under Rule 144(d) of the Act to clear the subject Securities of restriction
after Consultant has satisfied the requirements of Rule 144(d).
3.6 In
connection with the acquisition of Securities hereunder, the Consultant
represents and warrants to the Company, to the best of its knowledge, the
following:
(a) Consultant
is an accredited investor, as that term is defined in Regulation D promulgated
under the Securities Act of 1933;
(b) Consultant
was not formed for the specific purpose of acquiring the Securities and is
acquiring the Securities for the Consultant’s own account for long-term
investment and not with a view toward resale or distribution thereof except
in
accordance with applicable securities laws;
(c) Consultant
acknowledges that the Consultant has been afforded the opportunity to ask
questions of and receive answers from duly authorized officers or other
representatives of the Company concerning an investment in the Securities,
and
any additional information which the Consultant has requested;
(d) Consultant
has had experience in investments in restricted and publicly traded securities,
and Consultant has had experience in investments in speculative securities
and
other investments which involve the risk of loss of investment. Consultant
acknowledges that an investment in the Securities is speculative and involves
the risk of loss. Consultant has the requisite knowledge to assess the relative
merits and risks of this investment without the necessity of relying upon other
advisors, and Consultant can afford the risk of loss of its entire investment
in
the Securities;
(e) Consultant
understands that the Shares may not be sold, transferred or otherwise disposed
of except pursuant to an effective registration statement or appropriate
exemption from registration under applicable state law and, as a result, may
be
required to hold the Shares for an indefinite period of time; and
(f) Consultant
understands and acknowledges that the certificates representing the Shares
issued will contain a restrictive securities legend and that the certificates
representing the Warrants issued upon exercise will also contain a restrictive
securities legend.
4. Expenses.
Consultant agrees to pay for all of its expenses directly without
reimbursement.
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5. Confidentiality
Obligations.
As a
condition to Consultant’s continuing relationship with the Company as public
relations and investor communications advisor, Consultant understands and agrees
as follows:
5.1 Consultant
hereby acknowledges that it may have received, or may receive in the future,
certain confidential forward-looking statements (either written or oral),
reports, analyses, notes, evaluation material or other confidential or
non-public information from the Company concerning the Company (collectively,
the “Confidential
Information”).
5.2 For
the
purposes of this Agreement, the definition of Confidential Information shall
not
include information which:
(a) Had
been
made previously available to the public by the Company;
(b) Is
or
becomes generally available to the public, unless the information being made
available to the public results in a breach of this Agreement;
(c) Prior
to
disclosure to Consultant or Consultant’s representatives or agents, was already
rightfully in any such person’s possession; or
(d) Is
obtained by Consultant or Consultant’s representatives or agents from a third
party who is lawfully in possession of such information, and not in violation
of
any contractual, legal or fiduciary obligation to the Company, with respect
to
such information and who does not require Consultant to refrain from disclosing
such information to others.
5.3 Consultant
shall use the Confidential Information solely for the purpose of performing
the
services required to be performed by Consultant hereunder. Consultant, and
any
representatives and agents of Consultant, shall keep all Confidential
Information confidential by Consultant, and shall not disclose any Confidential
Information without the prior written consent of the Company; provided, however,
that any of such information may be disclosed to Consultant’s representatives or
agents who need to know such information for the purpose of performing such
services required to be performed hereunder (it being understood that Consultant
shall inform such representatives and agents of the confidential nature of
the
Confidential Information and shall direct such representatives and agents to
treat such information confidentially). Consultant shall be responsible for
any
breach of this Agreement by its representatives or agents.
5.4 Following
the completion of its engagement by the Company, Consultant and any
representatives or agents of Consultant shall promptly return any Confidential
Information in their respective possessions to the Company, without retaining
any copy thereof, and destroy all analyses, compilations, studies or other
documents prepared by or for internal use which reflect, contain or embody
Confidential Information.
5.5 Consultant
hereby acknowledges that it is aware, that the securities laws of the United
States prohibit any person who has material, non-public information concerning
the Company or a possible transaction involving the Company from purchasing
or
selling securities in reliance upon such information or from communicating
such
information to any other person or entity under circumstances in which it is
reasonably foreseeable that such person or entity is likely to purchase or
sell
such securities in reliance upon such information.
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5.6 Consultant
acknowledges and agrees that a violation of the terms of this Agreement would
cause irreparable harm to the Company, and that the Company’s remedy at law for
any such violation would be inadequate. In recognition of the foregoing,
Consultant agrees that, in addition to any other relief afforded by law,
including damages sustained by a breach of this Agreement and without any
necessity of proof of actual damage, the Company shall have the right to enforce
this Agreement by specific remedies, which shall include, among other things,
temporary and permanent injunctions, it being the understanding of Consultant
and the Company that both damages and injunctions shall be proper modes of
relief and are not to be considered as alternative remedies.
6. Allocation
of Time and Energies.
The
Consultant hereby promises to perform and discharge faithfully the
responsibilities which may be assigned to the Consultant from time to time
by
the officers and duly authorized representatives of the Company in connection
with the conduct of its financial and public relations and communications
activities, so long as such activities are in compliance with applicable
securities laws and regulations. Consultant and staff shall diligently and
thoroughly provide the consulting services required hereunder. Although no
specific hours-per-day requirement will be required, Consultant and the Company
agree that Consultant will perform the duties set forth herein above in a
diligent and professional manner. The parties acknowledge and agree that a
disproportionately large amount of the effort to be expended and the costs
to be
incurred by the Consultant and the benefits to be received by the Company are
expected to occur within or shortly after the first two months of the
effectiveness of this Agreement. It is explicitly understood that Consultant’s
performance of its duties hereunder will in no way be measured by the price
of
the Company’s common stock, nor the trading volume of the Company’s common
stock. It is also understood that the Company is entering into this Agreement
with Boston Financial Partners, Inc., (“BFP”),
a
Massachusetts corporation and not any individual member of BFP, and, as such,
Consultant will not be deemed to have breached this Agreement if any member,
officer or director of BFP leaves the firm or dies or becomes physically unable
to perform any meaningful activities during the term of the Agreement, provided
the Consultant otherwise performs its obligations under this
Agreement.
7. Non-Assignability
of Services.
Consultant’s services under this contract are offered to Company only and may
not be assigned by Company to any entity with which Company merges or which
acquires the Company or substantially all of its assets. In the event of such
merger or acquisition, all compensation to Consultant herein under the schedules
set forth herein shall remain due and payable, and any compensation received
by
the Consultant may be retained in the entirety by Consultant, all without any
reduction or pro-rating and shall be considered and remain fully paid and
non-assessable. Notwithstanding the non-assignability of Consultant’s services,
Company shall assure that in the event of any merger, acquisition, or similar
change of form of entity, that its successor entity shall agree to complete
all
obligations to Consultant, including the provision and transfer of all
compensation herein, and the preservation of the value thereof consistent with
the rights granted to Consultant by the Company herein, and to
Shareholders.
8. Indemnification.
The
Company warrants and represents that all oral communications, written documents
or materials furnished to Consultant by the Company with respect to financial
affairs, operations, profitability and strategic planning of the Company are
accurate and Consultant may rely upon the accuracy thereof without independent
investigation. The Company will protect, indemnify and hold harmless Consultant
against any claims or litigation including any damages, liability, cost and
reasonable attorney’s fees as incurred with respect thereto resulting from
Consultant’s communication or dissemination of any said information, documents
or materials excluding any such claims or litigation resulting from Consultant’s
communication or dissemination of information not provided or authorized by
the
Company.
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9. Representations.
Consultant represents that it is not required to maintain any licenses and
registrations under federal or any state regulations necessary to perform the
services set forth herein. Consultant acknowledges that, to the best of its
knowledge, the performance of the services set forth under this Agreement will
not violate any rule or provision of any regulatory agency having jurisdiction
over Consultant. Consultant acknowledges that, to the best of its knowledge,
Consultant and its officers and directors are not the subject of any
investigation, claim, decree or judgment involving any violation of the SEC
or
securities laws. Consultant further acknowledges that it is not a securities
Broker Dealer or a registered investment advisor.
10. Legal
Representation.
The
Company acknowledges that it has been represented by independent legal counsel
in the preparation of this Agreement. Consultant represents that it has
consulted with independent legal counsel and/or tax, financial and business
advisors, to the extent the Consultant deemed necessary.
11. Status
as Independent Contractor.
Consultant’s engagement pursuant to this Agreement shall be as independent
contractor, and not as an employee, officer or other agent of the Company.
Neither party to this Agreement shall represent or hold itself out to be the
employer or employee of the other. Consultant further acknowledges the
consideration provided hereinabove is a gross amount of consideration and that
the Company will not withhold from such consideration any amounts as to income
taxes, social security payments or any other payroll taxes. All such income
taxes and other such payment shall be made or provided for by Consultant and
the
Company shall have no responsibility or duties regarding such matters. Neither
the Company nor the Consultant possess the authority to bind each other in
any
agreements without the express written consent of the entity to be
bound.
12. Attorney’s
Fee.
If any
legal action or any arbitration or other proceeding is brought for the
enforcement or interpretation of this Agreement, or because of an alleged
dispute, breach, default or misrepresentation in connection with or related
to
this Agreement, the successful or prevailing party shall be entitled to recover
reasonable attorney’s fees and other costs in connection with that action or
proceeding, in addition to any other relief to which it or they may be
entitled.
13. Waivers.
The
failure of any party to insist, in any one or more instances, upon the
performance of any of the terms or conditions of this Agreement or to exercise
any right, shall not be construed as a waiver of the future performance of
any
such term or condition or the future exercise of such right.
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14. Notices.
Any
notice to be given shall be sufficiently given when received, and, if mailed,
shall be deemed received five (5) business days after the date of mailing if
sent by certified mail, postage prepaid, to the address of the party set forth
below:
|
To
the Company:
|
To
the Consultant:
|
|
Boston
Financial Partners, Inc.
|
|
|
Xxxxxxx
X. Xxxx, President
|
Xxxxxx
Brazil, President
|
|
000
XXX Xxxxxx, 00 Xxxxx 0xx
Xxxxxx
|
000
Xxxxxxxxx Xxxxx, Xxxxx 000
|
|
Xxxxxxxxxxx,
XX 00000-0000
|
Xxxxxx,
XX 00000
|
It is understood that either party may change the address to which notices for it shall be addressed by providing notice of such change to the other party in the manner set forth in this paragraph.
15. Choice
of Law, Jurisdiction and Venue.
This
Agreement shall be governed by, construed and enforced in accordance with the
laws of the State of Minnesota. The parties agree that Minnesota will be the
venue of any dispute and will have jurisdiction over all parties.
16. Remedies
and Enforcement.
The
obligations of Consultant contained Section 5 shall not be excused by any
conduct of the Company. Consultant acknowledges that any breach or threatened
breach of the provisions of any of Section 5 would result in irreparable harm,
which may not be adequately compensated for by monetary damages. Accordingly,
in
addition to any other rights the Company may have at law or in equity, the
Company may obtain an injunction against the breach or continued breach of
such
provision. If the Company brings any action to enforce this Agreement, the
Court
shall, in addition, to any legal or equitable relief award by the court, award
the Company its reasonable attorney’s fees and expenses.
17. Severability.
The
invalidity or unenforceability of one or more provisions of this Agreement
shall
not affect the validity or enforceability of any of the other provisions, and
this Agreement shall be construed as if such invalid or unenforceable provisions
were omitted. If any provision is unenforceable because it is overbroad, the
parties agree that such provision shall be limited to the extent necessary
to
make it enforceable, it being the intent of the parties that provisions of
this
Agreement be enforced to the maximum extent possible.
18. Complete
Agreement.
This
Agreement contains the entire agreement of the parties relating to the subject
matter hereof. This Agreement and its terms may not be changed orally but only
by an agreement in writing signed by the party against whom enforcement of
any
waiver, change, modification, extension or discharge is sought.
Signature
page follows
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IN
WITNESS WHEREOF, the
undersigned have executed this Agreement the day and year first above written.
| Date: ________________ | By: _____________________________ |
| Xxxxxxx X. Xxxx, President |
CONSULTANT:
BOSTON FINANCIAL PARTNERS, INC.
| Date: ________________ | By: _____________________________ |
| Xxxxxx Brazil, President |
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