EXHIBIT 10.11
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT is made this _____ day of January, 1999, by and
between The Wyndhurst Capital Group, LLC, whose principal place of business is
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (hereinafter referred to
as the "Consultant"), and America's Doctor, Inc., whose principal place of
business is located at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(hereinafter referred to as "AD" or the "Company).
WHEREAS, the Consultant has provided numerous services for the Company
since its inception, including but not limited to helping to found the Company
in August, 1997, negotiating the America OnLine contract, assisting the Company
in obtaining its start-up capital; negotiating major contracts; and structuring
the Company;
WHEREAS, the Company recognizes the Consultant's importance to the Company
and the significant role the Consultant has played in the accomplishments of the
Company to date;
WHEREAS, the Company desires to have the Consultant continue to perform
consulting services for the Company;
WHEREAS, the Consultant desires to continue consulting to the Company, its
Board of Directors and the officers of the Company;
WHEREAS, the Consultant has been and shall remain an independent
contractor and not an employee of the Company;
WHEREAS, the Company and the Consultant have an ongoing agreement
regarding the compensation of the Consultant which both parties desire to
memorialize in writing;
NOW, THEREFORE, it is agreed as follows:
1. Recitals. The abovementioned recitals are incorporated as if fully set
forth herein.
2. Term. The term of this Consulting Agreement shall be for a period of
one (1) year commencing on November 1, 1998, and may be renewed for two (2)
successive six (6) month periods upon the agreement of the Company and the
Consultant.
3. Consultations. The Consultant shall be available to consult with the
Board of Directors, and the officers of the Company, at reasonable times,
concerning matters pertaining to the organization of the administrative staff,
the fiscal policies of the Company, the relationship of the Company with its
employees or with any organization representing its employees, and, in general,
the important problems of concern in the business affairs of the Company. The
Consultant's services shall include, but not be limited to the following duties
and functions relating to the Company: (i) coordinate, supervise all financing
activities of the Company; (ii)
serve as the primary contact/advisor for the Company in connection with the
raising of capital in the form of debt or equity; (iii) assist the Company in
structuring the employee stock option plan; (iv) act as the primary business
interface between the Company's outside counsel and Company management; (v)
serve as the primary interface between the Company management and its Board of
Directors; (vi) assist in the preparation of the Company's business plans and
financial forecasts; (vii) perform management/business consulting services;
(viii) and any other activities reasonably requested by the Company or its
Directors. The Consultant shall not represent the Company, its Board of
Directors, its officers or any other members of the Company in any transactions
or communications nor shall Consultant make claim to do so, unless authorized by
the Company, its officers or its Directors.
4. Compensation.
4.1 Monthly Fee. The Consultant shall receive $10,000 per month,
payable monthly from the Company for the performance of the services to be
rendered to the Company pursuant to the terms of the Consulting Agreement. The
monthly fee may be applied against fees paid to the Consultant pursuant to
Section 4.3 below.
4.2 Out-of-Pocket Expenses. In addition, the Company shall reimburse
the Consultant for any reasonable out of pocket expenses incurred by the
Consultant pursuant to the terms of this Consulting Agreement.
4.3. Fees Paid Upon Financing(s). By way of background, the Company
executed a letter agreement with the ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ Company, LLC ("RH") on
November 9, 1998, in which RH agreed to become the exclusive agent of the
Company to seek and to raise approximately $10,000,000 to $12,000,000 of private
equity for the Company within a specified time period. The Consultant was to
supervise RH's activities and be the primary interface between the Company and
RH. The Company obligated itself to pay RH and the Consultant a cash fee
totaling six percent (6%) of the amount of securities sold by the Company, and
$0.01 warrants of the Company representing three eights of one percent (3/8 of
1%) of the Company (on a fully diluted basis at the time of the placement) for
each $1,000,000 million dollars of securities sold. In addition, the Company had
previously obligated itself to pay the Consultant and other consultant(s) cash
fees and warrants, which when added to compensation to be paid to RH equaled a
total of 8% cash and 5,075 $.01 for each $1,000,000 raised for the first
$6,420,000 of funds raised. Shortly after executing this letter agreement, RH
asked to be and was released by the Company from performance under the letter
agreement. Prior to, during, and since the time RH was released from performance
under the letter agreement, the Company has relied upon the Consultant as its
primary source of guidance, expertise, and assistance in all aspects relating to
the Company's finances. In payment to the Consultant for this and other services
performed for the Company, the Company agreed and agrees to compensate the
Consultant (or its designee(s)) as follows:
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4.3(a) The Company's current $3,500,000 million dollar Common
Stock offering.
The Company is currently raising $3,500,000 million dollars
through a private offering of Common Stock at $25.00 per share. Upon the close
of this offering, the Consultant (or its designee(s)) shall be entitled to: (i)
a cash fee equal to eight percent (8%) of the total funds raised, minus the
aggregate Monthly Fee previously paid to the Consultant (in accordance with
Section 4.1); and (ii) $0.01 warrants of the Company representing 10,124 shares
of Common Stock of the Company; and
4.3(b) The proposed investment by ▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇ Capital
Focus II ("TDCFII").
The Company is currently negotiating an investment by TDCFII
in an amount up to $4,000,000 at a price of $30.00 per share of Convertible
Series A Preferred Stock. Upon the close of this offering with TDCFII (or the
prior close with any other party investing $4,000,000 in the Company), the
Consultant (or its designee(s)) shall be entitled to: (i) a cash fee equal to
six percent (6%) of the funds raised, minus the aggregate Monthly Fee previously
paid to the Consultant (in accordance with Section 4.1) to the extent that such
Monthly Fee did not reduce the cash fee in Section 4.3(a)(i); and (ii) $0.01
warrants of the Company representing 10,517 shares of Common Stock of the
Company; and
4.3(c) The Company's fundraising efforts up to and including
$6,000,000 over and above the amounts contained in Section 4.3(a) and 4.3(b).
The Company anticipates it will seek funding in excess of the
amounts contemplated in Sections 4.3(a) and 4.3(b) above, and shall compensate
the Consultant (or its designee(s)) for any such amounts raised by the Company,
up to and including $6,000,000 raised over and above the amounts described in
Sections 4.3(a) and 4.3(b) (in the form of either debt or equity), as follows:
(i) a cash fee equal to six percent (6%) of the funds raised, minus the
aggregate Monthly Fee previously paid to the Consultant (in accordance with
Section 4.1) to the extent that such Monthly Fee did not reduce the cash fee in
Section 4.3(a)(i) and/or Section 4.3(b)(i); and (ii) $0.01 warrants of the
Company equal to three-eighths of one percent (3/8 of 1%) for each $1,000,000
million dollars raised (on a fully diluted basis at the time of the raise); and
4.3(d) Fundraising efforts by the Company over and above the
amounts contained in Sections 4.3(a), 4.3(b) and 4.3(c).
The Company anticipates it will seek additional capital over and
above the amounts contemplated in 4.3(a), 4.3(b), and 4.3(c) above, at which
time the amount of cash and
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warrant compensation to be paid to the Consultant (or its designee(s)) shall be
mutually agreed upon by the Consultant and the Company.
4.4 Compensation for other services. The Consultant shall be
entitled to market compensation for performing other services for the Company,
including but not limited to, negotiating a sale or merger or related
transaction. The compensation to be paid for such services shall be mutually
agreed upon between the Company and the Consultant.
5. Independent Contractor. Both the Company and the Consultant agree that
the Consultant will act as an independent contractor in the performance of its
duties under this Consulting Agreement. Accordingly, the Consultant shall be
responsible for payment of all taxes including Federal, State and local taxes
arising out of the Consultant's activities in accordance with this Consulting
Agreement.
6. Liability. With regard to the services to be performed by the
Consultant pursuant to the terms of this Consulting Agreement, the Consultant
shall not be liable to the Company, or to anyone who may claim any right due to
any relationship with the Corporation, for any acts or omissions in the
performance of services on the part of the Consultant or on the part of the
agents, members, employees or affiliates of the Consultant, except when said
acts or omissions of the Consultant are due to willful misconduct or gross
negligence.
7. Indemnification. The Company shall indemnify and hold harmless the
Consultant, its agents, members, employees, and affiliates of each (collectively
the "Indemnified Party") from and against any losses, claims, damages, expenses,
liabilities, threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by or in the right of the Company) joint or several, to which any of them may
become subject by reason of the fact that he is or was a consultant, employee or
agent of the Corporation, or is or was serving at the request of the Corporation
as a director, officer, employee or agent of the Company or another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including all reasonable legal fees and other reasonable expenses incurred in
connection with investigating, preparing, defending, paying, settling or
compromising any claim, action, suit, proceeding, loss damage, expense or
liability, whether or not in connection with an action in which the Consultant,
its agents, members, employees or affiliates is a named party), judgments, fines
and amounts paid in settlement to the fullest extent allowable by law. The
Company will not, however, be responsible under the foregoing provisions with
respect to any loss, claim, damage, expense or liability to the extent that a
court competent jurisdiction shall have determined by a final judgment (not
subject to further appeal) that such loss, claim, damage, expense or liability
resulted from actions taken or omitted to be taken by the Consultant due to the
Consultant's gross negligence or willful misconduct.
8. Termination. This Consulting Agreement may be terminated by either
party upon thirty (30) days' written notice to the other party at the address
stated above or at an address chosen subsequent to the execution of this
Consulting Agreement and duly communicated to the
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other party. Notwithstanding the foregoing, it is expressly understood that the
provisions relating to the payment of fees and expenses and indemnification will
survive any such termination or expiration of this Consulting Agreement or
completion of the Consultant's services.
9. Information. In connection with the Consultant's engagement, the
Company and its advisors will furnish the Consultant with all data, material and
information concerning the Company (the "Information") which the Consultant
reasonably request or is necessary for the Consultant's performance of its
services, all of which will be accurate and complete in all material respects.
The Consultant agrees that any Information received by the Consultant during any
furtherance of the Consultant's obligations in accordance with this Consulting
Agreement will be treated by the Consultant in full confidence and will not be
revealed to any other person, firms or organizations except to its agents,
members, employees, and affiliates in connection with the Consulting services to
be performed on behalf of the Company.
10. Arbitration. Any controversy or claim arising out of or relating to
this contract, or the breach thereof, shall be settled by arbitration in
accordance of the rules of the American Arbitration Association, and judgment
upon the award rendered by the arbitrator(s) shall be entered in any court
having jurisdiction thereof. For that purpose, the parties hereto consent to the
jurisdiction and venue of an appropriate court located in the State of Maryland.
In the event that litigation results from or arises out of this Consulting
Agreement or the performance thereof, the parties agree to reimburse the
prevailing party's reasonable attorney's fees, court costs, and all other
expenses, whether or not taxable by the court as costs, in addition to any other
relief to which the prevailing party may be entitled. The Company acknowledges
that in no event shall the aggregate contribution of the Consultant, its agents,
members, employees, and affiliates of each exceed the amount of the fee actually
received by the Consultant pursuant to this Consulting Agreement. In addition,
no action shall be entertained by said court or any court of competent
jurisdiction if filed more than one year subsequent to the date the cause(s) of
action actually accrued regardless of whether damages were otherwise as of said
time calculable.
11. Miscellaneous.
11.1 Entire Agreement. This Consulting Agreement constitutes the
entire agreement between the parties and supersedes and takes precedence over
all prior agreements or understanding whether oral or written, between the
Consultant and the Company and may only be modified by written agreement signed
by both parties.
11.2 Governing Law. This Consulting Agreement shall be governed by
and construed in accordance with the laws of the State of Maryland without
regard to conflict of laws principles.
11.3 Headings. The paragraph headings in this Agreement have been
included for mere convenience of reference, and shall not be considered
substantive parts of this Agreement in resolving any question or interpretation
or construction.
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11.4 No Waiver. The failure of either party to object to, or to take
affirmative action with respect to, any conduct of the other party that violates
any term or condition of this Agreement shall be limited to that particular
instance, and shall not be construed as a waiver of that party's rights for such
breach or as a waiver of such remedies for future breaches by the other party.
11.5 Severability. If any provision of this Agreement becomes
unlawful or unenforceable in any jurisdiction, such provision shall be
ineffective only to the extent of such invalidity or unenforceability without
invalidating the remaining provisions of this Agreement, and any such invalidity
or unenforceability in any jurisdiction shall not invalidate such provision or
render it unenforceable in any other jurisdiction.
11.6 Binding Agreement; Assignment. This Agreement is binding upon
and shall enure to the benefit of the parties and their respective successors
and permitted assigns. Neither party may transfer or assign this Agreement
without the prior written consent of the other party.
11.7 Rights Unique. The parties hereto acknowledge that each party's
rights and obligations hereunder (other than the payment of money for which
there is an adequate remedy for damages at law) are special, unique,
extraordinary and impossible of replacement, which gives them a peculiar value,
the loss of which could not be reasonably or adequately compensated in damages
in an action at law, and that either party's failure or refusal to perform its
obligations hereunder would cause the other party loss and damages. If either
party fails or refuses to perform such obligations, the other party shall be
entitled to injunctive or other equitable relief against it, including temporary
relief prior to a time at which a preliminary hearing may be held by a court of
competent jurisdiction to prevent the continuance of such failure or refusal or
to prevent the breaching party from granting rights to others in violation of
this Agreement.
11.8 Number/Gender/Plural. All pronouns and words shall be read in
appropriate number and gender; the masculine, feminine and neuter shall be
interpreted interchangeably; and the singular shall include the plural and vice
versa, as the circumstances may require.
11.9 Voluntary Agreement. The parties hereto represent that they
have carefully read the foregoing Consulting Agreement, understood its terms,
consulted with an attorney of their choice, and voluntarily signed the same as
their own free act with the intent to be legally bound thereby. The terms of
this Consulting Agreement are contractual and not a mere recital.
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IN WITNESS WHEREOF, the parties have hereunto executed this Consulting
Agreement as of the date hereupon first written.
THE WYNDHURST CAPITAL GROUP, LLC ATTEST:
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ /s/
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▇▇▇▇▇ ▇▇▇▇▇▇▇, Managing Director
America's Doctor, Inc. ATTEST:
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chairman and CEO
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