CONSULTING SERVICES AGREEMENT
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THIS CONSULTING SERVICES AGREEMENT is made as of the 31st day of January 2003
BETWEEN:
SUNGOLD ENTERTAINMENT CORP., a company duly incorporated under the laws of
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the Province of British Columbia, and having its registered and records
office at Suite 000 - 000 Xxxxxxx Xxxxxx, Xxxxxxxxx, X.X., X0X 0X0,
(hereinafter called the "Company")
OF THE FIRST PART
AND:
XXXXX XXXXXX, of #0000 000 Xxxxxxxxx Xx., Xxxxxxxxx, XX X0X 0X0
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(hereinafter called the "Consultant"),
OF THE SECOND PART
(KH/BWL)
WHEREAS: The Company and its affiliates carry on the business of developing and
operating the Horsepower(TM) virtual horseracing game available on the Internet
and the Company is in the business of operating the game as a U.S. dollar
wagering site (the "Business"); the Consultant is an employee of the Contractor;
the Contractor and the Consultant have experience in the Corporate Financing
Business; the Company desires to secure the hereinafter described Services of
the Contractor; the Contractor has agreed to provide its Services to the Company
in accordance with the terms and conditions herein set forth.
NOW THEREFORE, THIS AGREEMENT WITNESSETH that in consideration of the respective
covenants and agreements hereinafter contained and the sum of One Dollar now
paid by the Company to the Contractor (the receipt and sufficiency of which is
hereby acknowledged by the Contractor), the parties hereto agree as follows:
1. Contract for Services. The Company hereby engages the Contractor to
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provide the consulting services specified in Schedule "A" hereto together with
such other consulting services as the Company reasonably requests from time to
time (the "Services") and the Contractor hereby accepts such engagement on the
following terms and conditions.
2. Responsibilities of Company. The Company will:
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(a) Make available to the Consultant, information or data that the Company
considers pertinent to the Services to be provided by the Consultant
in connection with the Company's Business;
(b) Consider all memoranda, reports and other documents prepared by the
Consultant relating to the Services, and whenever prompt action is
necessary, inform the Consultant of the Company's decisions in a
reasonable time;
(c) Pay in full when due, all amounts payable to the Consultant;
(d) Make such management personnel of the Company available to the
Consultant as may reasonably necessary, in the opinion of the Company,
be required for the Consultant to perform its consulting Services.
3. Term. Subject to the provisions hereof the term of this Agreement shall
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be one (1) year commencing January 31st, 2003 and terminating on January 30th,
2004 unless terminated in accordance with paragraphs 13 or 14 hereof.
4. Provision of Consultant. The Contractor shall provide the services of
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the Consultant to perform the Services and the Consultant hereby agrees to
perform the Services for the Company. The Contractor shall pay to the Consultant
all amounts required to be paid to the Consultant to cause the Consultant to
perform the Services and the Company shall have no obligation to pay or
otherwise compensate the Consultant.
5. Character and Extent of Services to be Provided. It is the mutual intent
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of the parties that the Consultant shall act strictly in a professional
consulting capacity as an independent contractor for all purposes and in all
situations and shall not be considered an employee of the Company.
6. Source Deductions. The Company shall have no obligation to and shall not
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make any source deductions with respect to the Contractor or the Consultant.
The Contractor shall make all source deductions, if any, required to be made in
respect of the Contractor and Consultant in respect of income tax, Canada
Pension Plan, Unemployment Insurance, Workers Compensation and all other
required remittances and deductions, and remit same as and when required and
shall indemnify and hold harmless the Company and each of its officers,
directors and employees from any liability in respect thereof.
7. Reporting. The Contractor shall cause the Consultant to report to the
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Chief Executive Officer of the Company (the "Company's Representative").
8. Time and Place of Consulting Services. The Contractor will determine the
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times and places at which the Services will be performed by Consultant provided
that where such services require consultation with the management of the
Company, the Contractor will cause the Consultant to attend at the premises of
the Company or such other place as the Company may reasonably require. This
would involve a minimum average of forty (40) hours per month. (KH/BWL)
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9. Working Facilities. The Consultant shall supply facilities and materials
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as necessary for the performance of its services; however, the Consultant shall,
as reasonably required by the Company, attend the facilities of the Company.
10. Compensation and Expenses. The Company shall pay and the Contractor
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agrees to accept as compensation for the Services to be rendered hereunder for
the twelve (12) months a fee of, without duplication: U.S (KH/BWL) $5,000.
payable in Sungold Entertainment Corp. common free trading shares valued on
closing price at the last day of each month, together with GST thereon
commencing the 28th of February 2003. After twelve (12) months, the compensation
shall be as agreed between the parties but in any event not less than the first
twelve (12) months. The Contractor shall provide proof of registration for GST,
and shall include its GST Registration number on all invoices. Consultant will
also receive a 10 percent finders fee for any Company approved financings
provided by Consultant. Such fee will be paid in USD upon closing of financing.
11. Performance Criteria. The Services shall be provided: (i) where
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specific written performance criteria have been agreed to by the Company's
Representative in respect of the Services or any one or more aspects thereof,
the Services shall be provided in accordance with such written specific
performance criteria; (ii) in the absence of such written specific performance
criteria the Services shall be provided in such manner as may be determined by
written mutual agreement between the Company's Representative and the
Consultant; and (iii) in the absence of any such written specific performance
criteria and written mutual agreement then all such Services provided hereunder
shall be provided to the reasonable satisfaction of the Company's
Representative.
12. Consultant's Qualifications. The Contractor and the Consultant jointly
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and severally represent and warrant that the Consultant is qualified to provide
the Services contemplated hereby and that the Consultant has the necessary
qualifications and expertise to perform and provide the Corporate Financing
Services required hereunder in a professional manner, in compliance with the
highest ethical standards and all applicable laws and regulations. The
Consultant covenants and agrees to provide the Services in a diligent, careful,
skilful and efficient manner in keeping with the commercial standards of the
Investment Banking Industry.
13. Termination. The Company may not terminate this Agreement unless under
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the provisions of paragraph 14. The Contractor may terminate this Agreement
after the first twelve months at any time by giving ninety (90) days written
notice to the other provided that upon such termination becoming effective the
Company shall pay in full to the Contractor the amount of fees, commission and
bonuses then due and payable to the Contractor within ninety (90) days of
receipt of the Contractor's final invoice.
14. Termination for Cause. Notwithstanding anything herein contained the
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Company may terminate this Agreement without prior notice for just cause which
shall include but not be limited to:
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(a) failure by the Contractor or the Consultant to comply with any of the
provisions hereunder including, without limitation, failure, refusal
or neglect by the Contractor or Consultant to perform or provide any
aspect of the Services within the time permitted for its provision or
performance as determined pursuant to the terms of this Agreement and
upon the Contractor and Consultant being notified in writing by the
Company's Representative alleging such failure and failing to remedy
such failure within fifteen (15) days of receiving such notice;
(b) the Contractor, the Consultant or any of its or his employees
committing an act of fraud or dishonest or serious misconduct, or any
act detrimental to the reputation of the Company in circumstances that
would, in the reasonable opinion of the Company's Representative make
the Contractor or Consultant unsuitable to continue to act on behalf
of the Company; or
(c) the Contractor or Consultant committing an act of bankruptcy or making
a general assignment for the benefit of its creditors or otherwise
taking advantage of laws relating to insolvency or creditors' rights
including the appointment of a receiver over the assets of the
Contractor or Consultant.
15. Duty of Loyalty - No Conflict of Interest. Each of the Contractor and
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Consultant hereby agree to avoid and to cause their employees to avoid any
circumstances or actions which might arguably place the Contractor, the
Consultant or its or his/her employees or any of them in a position of divided
loyalty regarding their obligations to the Company. The Contractor and
Consultant will not, and will obtain from each of their employees an agreement
in writing that he/she will not, utilize for its or his/her own benefit or that
of a third party any information or potential business opportunities it or they
may learn of as a result of the provision of the Services to the Company,
without having first obtained the written consent of the Company.
16. Non-Exclusive Services. The parties acknowledge that this is not an
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exclusive consulting agreement and the Consultant, outside of the hours required
by the Company's business and not in the Company's office, may provide services
to third parties without the prior consent of the Company if such services will
not create an actual or apparent conflict of interest with the activities of the
Company or conflict with the obligations of the Consultant pursuant to this
Agreement. The Contractor and the Consultant acknowledge and agree that both
parties will be fully dedicated and on a first priority basis fulfil the
obligations of this Agreement.
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17. Confidentiality.
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17.1 The Services to be provided by the Consultant hereunder are sensitive
in nature. The Contractor and the Consultant shall keep and shall cause their
employees to keep in the strictest confidence all information regarding this
Agreement and all information it may acquire in respect of the Company, as well
as the nature and results of the Services the Consultant is to perform. During
the course of this Agreement the Consultant may also be given access to
confidential or proprietary information of the Company or another party with
whom the Company may have signed a non-disclosure agreement. Without the prior
written consent of the Company the Consultant shall not disclose or use any such
information.
17.2 The scope of this obligation includes any Company proprietary
information which is labelled or otherwise identified to the Consultant or his
employees as confidential. It also includes any information regarding the
purpose or details of the Contractor and Consultant's arrangement with the
Company, the strategic or other business plans of the Company, proprietary
information which is furnished to the Company by another under a non-disclosure
agreement, and any evaluations, discussions or transactions involving another
party in which the Consultant may be involved under this Agreement and whether
pertaining to the Company or otherwise (the "Confidential Information").
17.3 The Consultant will exercise due diligence to maintain in confidence
any Confidential Information which is disclosed to him/her. As used here the
term "due diligence" means the same precaution and standard of care which the
Consultant would use to safeguard its own proprietary information, but in no
event less than reasonable care.
17.4 The Consultant may not reproduce, distribute or disclose any
Confidential Information to others or use it for any commercial purpose outside
this Agreement without first obtaining the written permission of the Company.
The Consultant will ensure that any employee who is given access to the
Confidential Information signs an appropriate agreement in the form and content
provided by the Company from time to time requiring him/her to hold that
information in confidence and to use it only in the course of the Company's
Business.
17.5 This section does not impose any obligation on the Consultant if the
information is:
(a) publicly known at the time of disclosure;
(b) furnished by the Company to others without restrictions on its use or
disclosure;
(c) legally required to be disclosed by a regulatory or legal authority;
or
(d) independently developed by the Consultant without the use of
Confidential Information.
18. Title to Documents and Work Product. All draft and final reports,
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notes, memoranda, budgets, plans, projections, records, documents, data bases,
lists of contacts, leads or other information which the Consultant furnishes to
the Company under this Agreement will become
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the sole property of the Company and the Consultant shall deliver all such items
to the Company's Representative at the end of the Term or earlier termination of
this Agreement and before receipt of final payment hereunder and all reports and
database materials will be provided both as hard copy and on disk. The
Consultant may keep a copy of such materials for record keeping purposes. The
Company shall own all right and title to all ideas, materials or programs
excluding pre-existing specified computer programs owned by the Consultant and
modified for use by the Company which the Consultant make or conceive of in
connection with the provision of Services to the Company under this Agreement.
19. Assignment and Sub-contracting. Neither the Contractor nor the
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Consultant may assign or sub-contract this Agreement or any portion of it to
another without the express written consent of the Company since the Company is
relying on the special expertise of the Contractor and the Consultant to
properly provide the Services.
20. Provisions which Operating Following Termination. Notwithstanding any
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termination of this Agreement for any reason whatsoever and with or without
cause the provisions of sections 15, 17, 18 and 20 any other provisions of this
Agreement necessary to give effect thereto shall continue in full force and
effect following any such termination.
21. Independent Contractor. This Agreement creates only an independent
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contractor relationship between the Company, the Contractor and the Consultant.
Neither the Contractor nor the Consultant shall hold itself or himself or any of
its or his employees or permitted sub-contractors out to be a partner, or agent
for the Company. Neither the Contractor nor the Consultant shall create any
obligations or responsibilities on behalf of the Company or in the name of the
Company or purport to do so, or represent itself or himself to be authorized to
do so, without the prior written consent of the Company's Representative.
Neither the Contractor nor the Consultant shall have authority to act or to bind
the Company in any way or to represent the Company as responsible for the
actions of the Contractor or Consultant in any way. Neither the Consultant nor
any other employee of the Contractor will be deemed to be an employee of the
Company or entitled to any of the benefits provided by the Company to its
employees. The Contractor and the Consultant only will be responsible for the
acts of the Consultant.
22. Agreement Voluntary and Equitable. The Company, the Contractor and the
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Consultant acknowledge and declare that in executing this Agreement they are
each relying wholly on their own judgment and knowledge and have not been
influenced to any extent whatsoever by any representations or statements made by
or on behalf of the other party regarding any matters dealt with herein or
incidental hereto. The Company, the Contractor and the Consultant further
acknowledge and declare that they will each have carefully considered and
understand the terms contained in the Agreement including, but without limiting
the generality of the foregoing, the Contractor's and the Consultant's rights
upon termination and the restrictions on the Contractor and the Consultant after
termination, and acknowledge and agree that the said terms of this Agreement and
rights and restrictions upon termination are mutually fair and equitable, and
that they execute this Agreement voluntarily and of their own free will.
23. General. The Contractor and the Consultant have been asked to seek
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independent legal advice before signing this Agreement. This Agreement and the
obligations of the parties shall be
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binding upon the parties and their heirs, executors, successors and permitted
assigns. Save and except for the express provisions of this Agreement, any and
all previous agreements, written or oral, between the parties hereto or on their
behalf relating to the employment of the Contractor or the Consultant by the
Company are hereby terminated and canceled. Neither the Contractor nor the
Consultant may assign this Agreement without the prior written agreement of the
Company. This Agreement and the instruments and schedules referred to herein
constitute the entire agreement between the parties with respect to the subject
matter of the agreement and supercede all prior agreements, undertakings
negotiations and discussions, whether oral or written, between the parties and
there are no warranties, conditions, representations or other agreements between
the parties in connection with the subject matter of this Agreement, except as
specifically set forth herein. No modification of this Agreement shall be valid
unless made in writing and signed by the parties hereto. British Columbia law
governs this Agreement. Notices under this Agreement must be sent by personal
delivery, facsimile or registered mail to the appropriate party at its address
stated on the first page of this Agreement or to a new address if the other has
been properly notified of the change. Such notice shall be deemed to be
delivered, if by personal delivery when delivered; if by facsimile when the
transmitting machine produces a report confirming the successful transmission;
and if delivered by registered mail on the third day following such mailing. The
headings in this Agreement are inserted for convenience only and shall not
affect the interpretation hereof. If any covenant or provision herein is
determined to be void or unenforceable in whole or in part, it shall not be
deemed to affect or impair the validity of any other covenant or provision and
the foregoing clauses are declared to be separate and distinct covenants. The
parties shall deliver to each other further documentation and shall perform such
further acts as and when the same may be required to carry out and give effect
to the terms and intent of this Agreement. No waiver or consent by a party of or
to any breach or default by any other party shall be effective unless evidenced
in writing, executed and delivered by the party so waiving or consenting and no
waiver or consent effectively given as aforesaid shall operate as a waiver of or
consent to any further or other breach or default in relation to the same or any
other provision of this Agreement. Time is of the essence of this Agreement and
of its performance.
24. Counterparts. This Agreement may be executed in counterparts and by
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facsimile each of which shall represent a signed original copy of this Agreement
and all of which together shall constitute one and the same Agreement.
IN WITNESS WHEREOF the parties have executed this Agreement as of the day
and year first above written.
SUNGOLD ENTERTAINMENT CORP.
Per: /s/ Xxx X. Xxxx
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Xxx X. Xxxx - President & CEO
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SIGNED, SEALED AND DELIVERED ) Dated as of this date (KH/BWL)
in the presence of:) /s/ Xxxxx Xxxxx May January 31, 2002
(XXXXX XXXXX MAY)
)
XXXXX X. XXXXXX )
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Name ) /s/ Xxxxx Xxxxxx
) --------------------------
#1458 000 Xxxxxxxxx Xx. ) XXXXX XXXXXX
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Address )
)
Investment Banker )
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Occupation )
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SCHEDULE "A"
DESCRIPTION OF CONSULTING SERVICES
All duties, responsibilities and authority normally associated with the position
of Corporate Financing Consultant/Advisor.
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