Exhibit 10.11
Consulting Agreement
This Consulting Agreement (this "Agreement") is made as of the 2nd day of
October, 2006, by and among WGL Entertainment Holdings, Inc, a Delaware
corporation, having its principal place of business at 000 Xxxxxxxx XX. Xxxx 000
Xxxx Xxxx, XX 00000 (Company), and Xxxxx Xxxxxxx, an individual and resident of
0000 Xxxx Xxxxx, Xxxxxxxxx Xxxxx, XX 00000 ("Consultant") and is made in light
of the following recitals which are a material part hereof.
RECITALS:
A. Consultant is a corporate finance consultant, experienced with
both technology and financing of small-cap companies generally.
Accordingly, notwithstanding Consultant's familiarity with securities
law, neither Consultant nor the Company desires that Consultant
furnish any legal services but only information, evaluation and
analysis.
B. Consultant has knowledge and experience to provide such
information, evaluation, analysis as the Company believes can assist
it in furthering execution of its business model.
C. The Company desires to retain the services of the Consultant for
those consulting services regarding certain financing contemplated as
well as the impact of such financing on the functions and operations
of the Company as more fully set forth in that confidential schedule
of services and deliverables attached hereto as Schedule A which
services are incorporated herein by reference and referred to herein
as the "Consultant Services"
D. Consultant desires to provide the Consultant Services to and
consult with the Board of Directors, the officers of the Company, and
the administrative staff, and to undertake for the Company,
consultations and recommendations in conformity with such Consultant
upon the terms and conditions provided herein including but not
limited to the compensation promised herein. D.
NOW THEREFORE, for and in consideration of good and valuable consideration,
in hand paid, including, but not limited to the mutual promises set forth
herein, the receipt and sufficiency of which is acknowledged by each party
hereto, the parties hereby agree as follows:
1. RECITALS GOVERN. The parties desire to enter into this agreement for
purposes of carrying out the above recitals and intentions set forth above
and this Agreement shall be construed in light thereof.
2. STOCK ONLY FOR SERVICES. The parties desire to memorialize their agreement
to adhere to Securities Act Release No. 33-7646, dated February 26, 1999
regarding registration of securities on Form S-8, a copy of which is
attached hereto as Exhibit A and incorporated herein by reference. No duty,
obligation, engagement or other thing imposed on either the Company or the
Consultant hereunder shall be construed to impose any duty, obligation or
other engagement in violation of the letter or spirit of said release.
3. CONSULTING SERVICES. The Consultant agrees to provide the Consultant
Services to the Company during the "Term" (as hereinafter defined).
Consultant agrees to provide such information, evaluation and analysis, in
accordance with the Consultant Services as will assist in maximizing the
effectiveness of Client's business model both relative to its business
model and to its present and contemplated capital structure. The Consultant
shall personally provide the Consultant Services and the Company
understands that the nature of the services to be provided are part time
and that the Consultant will be engaged in other business and consulting
activities during the term of this Agreement.
3.a CONFLICTS. The Company waives any claim of conflict and
acknowledges that Consultant has owned and continues to own and has
consulted with and continues to consult with interests in competitive
businesses which might compete but for location.
3.b CONFIDENTIAL INFORMATION. The consultant agrees that any
information received by the consultant during any furtherance of the
consultant's obligations in accordance with this contract, which
concerns the personal, financial or other affairs of the company will
be treated by the consultant in full confidence and will not be
revealed to any other persons, firms or organizations. In connection
herewith, Consultant and the Company have entered into that
Confidentiality Agreement in the form attached hereto as Schedule B.
3.c ROLE OF CONSULTANT. Consultant shall be available to consult with
the Board of Directors, the officers of the Company, and the heads of
the administrative staff, 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 all in fulfillment of the Consultant Services. 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.
3.d LIABILITY. With regard to the services to be performed by the
Consultant pursuant to this Agreement, the Consultant shall not be
liable to the Company, or to anyone who may claim any right due to any
relationship with the Company, for any acts or omissions in the
performance of services on the part of the Consultant or on the part
of the agents or employees of the Consultant, except when said acts or
omissions of the Consultant are due to willful misconduct or gross
negligence. The Company shall hold the Consultant free and harmless
from any obligations, costs, claims, judgments, attorneys' fees, and
attachments arising from or growing out of the services rendered to
the Company pursuant to the terms of this agreement or in any way
connected with the rendering of services, except when the same shall
arise due to the willful misconduct or gross negligence of the
Consultant and the Consultant is adjudged to be guilty of willful
misconduct or gross negligence by a court of competent jurisdiction.
4. TERM. The term of this Agreement shall commence as of the date hereof and
shall continue for a period of one (1) year from that date, unless sooner
terminated as provided herein. It is understood that this Agreement shall
not automatically renew and no obligations to renew are implied
notwithstanding continued efforts to fulfill terms and conditions
incomplete as of the termination of this Agreement. This Agreement and the
duties and obligations of the Consultant may be terminated by either party
giving thirty (30) days' prior written notice to the other but the
compensation and any previously incurred and approved expenses shall be
deemed earned by and due to Consultant.
5. COMPENSATION. In consideration of the execution of the Agreement, and the
performance of his obligations hereunder, and in lieu of cash compensation
on an hourly basis, the Consultant and or his associates shall receive a
fee of Four Hundred Million (400,000,000) registered common shares of the
Company (hereinafter, the "Shares"). The Shares will be, prior to delivery
to Consultant, registered pursuant to valid and effective registration
statements under either Form SB-2 or S-8 and the Company agrees that the
Shares shall be freely tradable and that the existence of any restriction,
buy-sell or other limitation under state or Federal securities laws
including but not limited to Rule 144 of the Securities Act of 1933 and/or
the limitations on manner of sale imposed under the Securities and Exchange
Act of 1934 shall be lifted and/or waived by the Company prior to delivery
of the Shares. The Shares shall be tendered within Twenty (20) days of the
effective date of this Agreement.
6. EXPENSES. The Company shall pay or reimburse the Consultant for all
reasonable travel, business and miscellaneous expenses incurred by the
Consultant in performing its duties under this Agreement, subject to prior
approval.
7. CONTROL AS TO TIME AND PLACE AND MANNER WHERE SERVICES WILL BE RENDERED,
INDEPENDENT CONTRACTOR. It is anticipated the Consultant will spend up to
200 hours in fulfilling its obligations under this Agreement. The
particular amount of time may vary from day to day or week to week. The
Consultant shall not be entitled to any additional compensation except
where the Consultant performs more than 200 hours, subject to the prior
written approval of the Company, whereupon the Consultant will be paid at
the rate of $150 per hour for work performed in accordance with this
Agreement. If additional work is approved, the Consultant will submit an
itemized statement setting forth the time spent and services rendered, and
the Company will pay the Consultant the amounts due as indicated by
statements submitted by the Consultant within ten (10) days of receiptBoth
the Company and the Consultant agree that the Consultant will act as an
independent contractor in the performance of its duties under this
Agreement. The Consultant will perform most services in accordance with
this Agreement at a location and at times chosen in Consultant's
discretion. The Company may from time to time request that the Consultant
arrange for the services of others but Consultant shall choose and contract
with same. All costs to the Consultant for those services will be paid by
the Company but in no event shall the Consultant employ others without the
prior authorization of the Company. 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 4with this
Agreement, including by way of illustration but not limitation, Federal and
state income tax, Social Security tax, unemployment insurance taxes, and
any other taxes or business license fee as required. Except as otherwise
may be agreed, the Consultant shall at all times be in an independent
contractor, rather than a co-venture, agent, employee or representative of
the Company.
8. REPRESENTATIONS AND WARRANTIES. The Company represents and warrants that
(I) the shares being issued and/or sold pursuant to option are authorized
to be issued by the Company; (ii) The Company has full right, power, and
corporate authority to execute and enter into this Agreement, and to
execute all underlying documents and to bind such entity to the terms and
obligations hereto and to the underlying documents and to deliver the
interests and consideration conveyed thereby, same being authorized by
power and authority vested in the party signing on behalf of the Company;
(iii) the Company has and will have full right, power, and authority to
sell, transfer, and deliver the shares being issued and/or sold pursuant to
option; (iv) the Company has no knowledge of any adverse claims affecting
the subject shares and there are no notations of any adverse claims marked
on the certificates for same; and (v) upon receipt, Consultant or his
nominee will acquire the shares being issued and/or sold pursuant to
option, free and clear of any security interests, mortgage, adverse claims,
liens, or encumbrances of any nature or description whatsoever, subject
only to matters pertaining to the sale of securities generally including
but not limited to the Securities Act of 1933, as amended, and the rules
and regulations promulgated thereunder, or any state statute, rule, or
regulation relating to the sale of securities (collectively, "Securities
Laws"). In the event that Consultant accepts shares not yet subject to a
valid registration statement (notwithstanding or waiving the Company's
obligations to deliver shares duly and properly registered), Consultant
represents and warrants to the Company that he will acquire same for
investment and not with a view to the sale or other distribution thereof
and will not at any time sell, exchange, transfer, or otherwise dispose of
same under circumstances that would constitute a violation of Securities
Laws. Each party acknowledges the creation, modification and/or transfer of
securities and represents and warrants to all others that it has reviewed
the transaction with counsel and that no registration or representations
are required and that all rights of recourse or rescission resulting from
such transfer, to the extent permitted by law, are waived and each party
represents and warrants to all others that no marketing of securities to
the public has occurred. Each of the warranties, representations, and
covenants contained in this Agreement by any party thereto shall be
continuous and shall survive the delivery of Consultant Services, the
Compensation and the termination of this Agreement.
9. ARBITRATION. Any controversy or claim arising out of or relating to this
Agreement, 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 and the resolution
of any other claim hereunder, the parties hereto consent to the
jurisdiction and venue of an appropriate court located in Jefferson County,
State of Florida. In the event that litigation results from or arises out
of this 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.
In such event, 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.
10. NOTICES. All notices, requests, consents, and other communications under
this Agreement shall be in writing and shall be mailed by registered or
certified mail, postage prepaid, or delivered by Facsimile or delivered
personally to the address written above or to such other address of which
the addressee shall have notified the sender in writing. Notices mailed in
accordance with this section shall be deemed given when mailed.
11. BINDING EFFECT, ASSIGNMENT AND SUCCESSION. All covenants and agreements
contained in this Agreement by or on behalf of any of the parties hereto
shall bind and inure to the benefit of his, her or its respective heirs,
personal representatives, successors, and assigns, whether so expressed or
not. Except for assignment of the options as provided above, no party to
this Agreement may, however, assign his rights hereunder or delegate his
obligations hereunder to any other person or entity without the express
prior written consent of the other parties hereto.
12. ENTIRE AGREEMENT AND INTERPRETATION. This Agreement, including any exhibits
and schedules hereto, constitutes and contains the entire agreement of the
Company and the Consultant with respect to the provision of Consultant
Services and Compensation and supersedes any prior agreement by the
parties, whether written or oral. It 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. The waiver
of a breach of any term or condition of this Agreement must be in writing
and signed by the party sought to be charged with such waiver, and such
waiver shall not be deemed to constitute the waiver of any other breach of
the same or of any other term or condition of this agreement. This
Agreement shall be construed in accordance with and governed by the laws of
the State of Florida without regard to its rules and laws regarding
conflicts of laws and each of the parties hereto irrevocably submit to the
exclusive jurisdiction of any Florida State or United States Federal court
sitting in Palm Beach County, Florida over any action or proceeding arising
out of or relating to this Agreement. The parties hereto further waive any
objection to venue in the State of StateFlorida and any objection to an
action or proceeding in the State of placeStateFlorida on the basis of
forum non conveniens.
13. MISCELLANEOUS. The section headings contained in this Agreement are
inserted as a matter of convenience and shall not be considered in
interpreting or construing this Agreement. This Agreement may be executed
concurrently in two or more counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the same
instrument. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of the remaining
provisions. Time is of the essence of this Agreement and the obligations of
the parties hereto.
IN WITNESS WHEREOF, the Company and the Consultant have executed this
Agreement as of the day and year first written above.
Company: Consultant:
/s/ Xxxxxxx X. Xxxxxxx /s/ D. Xxxxx Xxxxxxx
-------------------------------- ----------------------------
WGL Entertainment Holdings, Inc. D XXXXX XXXXXXX
XXXX XXXXXXX 10-02-06
10-02-06
EXHIBIT A
ADOPTION OF SECURITIES ACT RELEASE NO. 33-7646, DATED FEBRUARY 26, 1999
REGARDING REGISTRATION OF SECURITIES ON FORM S-8
PURPOSE
To clarify that S-8 is not available to consultants who directly or indirectly
promote or maintain a market for the issuer's securities ,declaring that these
persons take from an issuer with a view to distribution and are therefore
"statutory underwriters" (who presumably would not have an exemption for the
resale of securities issued in these types of transactions [Section 4(1) of the
Securities Act of 1933, as amended (the "Act"), the exemption relied upon for
secondary sales of securities, is not available to "issuers, underwriters or
dealers" in securities]).
BACKGROUND
As of April 7, 1999, the availability of S-8's streamlined registration process
was restricted to deter the abuse of the Form to make sales to the general
public through so-called "consultants" and "advisors," and to eliminate
registration on the Form to "stock promoters." S-8 eliminated a need to file a
prospectus that duplicated information usually available to plan participants
who were being compensated by the issuance of securities rather than cash, and
it reflected the Commission's distinction between offerings made to employees
for compensatory reasons and offerings made for capital raising. The Commission
reasoned that the relationship of the employee to the issuer provided the
employee with a familiarity of the issuer's business sufficient to justify the
abbreviated disclosure, which would not be adequate in a capital raising
transaction. The 1990 amendment included "consultants" whom the Commission
found no reason to distinguish from regular employees, for bona fide non-capital
raising services rendered.
ABUSES
Since 1990, the Form has been used to distribute securities to the public
without the protections to investors of registration under Section 5 of the Act.
Securities are often issued to so-called "consultants" for nominal services,
with pre-arrangements for exercise and distribution to the public in the
underlying markets. Often the options granted are exercised to provide funds to
the issuer or the proceeds of the sales are for the payment of debts of the
issuer that are not related to any services provided by the consultants.
The initial registration of the shares underlying these options did not
register the public "capital raising" transaction which actually takes place via
the secondary sales. In these instances, the employee or consultant acts as a
conduit to the public, and the shares are not actually issued as compensation
for services, for which the Form is solely intended. Securities have also been
issued to consultants whose services are to promote the issuer's securities.
This practice invites fraud by providing inexpensive compensation to person who
hype the securities of the issuer and expand the issuer's market through resales
by these and other persons. Through its recent amendments to Form S-8, the
Commission has sought to curb these practices, while maintaining, to the extent
possible, the initial intent of the Form, i.e., the registration of compensatory
transactions between the issuer and consultants and advisors who render bona
fide services outside of "capital raising" circumstances, as well as to
traditional employees.
AMENDMENTS
The Form's availability is for employees or employees or subsidiaries, pursuant
to any employee benefit plan. An "employee" is defined to include a consultant
or advisor who provides bona fide services to the issuer other than in capital
raising transactions. Like the traditional employee, the consultant or advisor
must be a natural person, and there must be a contract between the issuer and
the consultant or advisor. The Commission has determined that "capital raising"
includes (i) compensation for any service that directly or indirectly promotes
or maintains a market for the issuer's securities, or (ii) where the securities
are issued to persons who act as conduits for a distribution to the general
public. Securities issued to persons who promote the issuer's securities are
outside the intent of the Form. Securities cannot be issued to anyone who
directly or indirectly promotes or maintains a market in the issuer's
securities. Issuers cannot use the Form for the issuance of securities to
consultants and advisors whose services related to potential capital
restructuring because this service is a predicate to "capital raising" and
market maintenance; however, services rendered in structuring the compensation
scheme would be included under the Form. Public relations services are also
prohibited as the Commission believes these services enhance and expand the
market of the issuer and its securities.
RULE 701 AMENDMENTS
As of April 7, 1999, the Commission amended Rule 701 to harmonize the
definition of "consultants and advisors" permitted to use the Rule to the
narrower definition of Form S-8. As revised, securities promoters will clearly
be excluded from the scope of persons eligible to use Rule 701.
SCHEDULE A TO CONSULTING AGREEMENT
Schedule of Services and Deliverables
Consultant shall provide the following Strategic Services:
1. Business Development and Planning: Develop an in-depth familiarization with
the Corporation's business objectives and bring to its attention potential
or actual opportunities that meet those objectives or logical extensions
thereof. Alert the Corporation to new or emerging high potential forms of
production and distribution that could either be acquired or developed
internally. Comment on the Corporation's corporate development including
such factors as position in competitive environment, financial performances
vs. competition, strategies, operational viability, etc. Identify
prospective suitable merger or acquisition partners for the Corporation,
perform appropriate diligence investigations with respect thereto, advise
the Corporation with respect to the desirability of pursuing such
prospects, and assist the Corporation in any negotiations which may ensue
therefrom.
2. Corporate Strategic Analysis: Evaluate business strategies and recommend
changes where appropriate.
3. Critically evaluate the Corporation's performance in view of its corporate
planning and business objectives.
4. Strategic Contacts and formation of Strategic alliances and Introduction to
strategic partners and other alliance candidates;
5. Strategic consulting regarding high level product planning, market
development, marketing and intellectual property planning; Business
development
6. Introduction to prospective customers for the Company's products or
services.
7. Review of existing and contemplated financing including lending and
convertible debt.
8. The consultant will consult with the officers and employees of the company
concerning matters relating to the management and organization of the
company, their financial policies, the terms and conditions of employment,
and generally any matter arising out of the business affairs of the
Company.
Schedule B to Consulting Agreement
Confidentiality Agreement
This Confidentiality Agreement (hereafter this "Agreement"), made this 2nd day
of October 2006, by and between WGL Entertainment Holdings, Inc., a Delaware
corporation ("Company"),having its residence at 000 Xxxxxxxx Xx. Xxxx 000 Xxxx
Xxxx, Xxxxxxx 00000 and D Xxxxx Xxxxxxx, an individual and resident of 0000 Xxxx
Xxxxx, Xxxxxxxxx Xxxxx, XX 00000 ("Consultant"). Given that the Company and
Consultant each desire to make certain confidential information concerning the
Company, its technology, its investments, its processes, its marketing
strategies, its capitalization and finances and its business as well as similar
confidential information lawfully possessed by the Consultant (collectively, the
"Information") for purposes agreed to be legitimate and the Company and
Consultant each agree to hold such Information confidential pursuant to the
terms of this Agreement, in consideration of the mutual promises and other good
and valuable consideration, the receipt and sufficiency of which is acknowledged
and with the intent to be legally bound hereby, the Company and the Consultant
agree as follows.
1. The Information includes, but is not limited to, (I) all
information on the Company, (ii) any and all data and information given or
made available to the Consultant by the Company for evaluation purposes,
whether written or in machine-readable form, (iii) any and all of the
Company's and Consultant's notes, work papers, investigations, studies,
computer printouts, and any other work product including electronic data
files, regardless of nature containing any such data and information and
(iv) all copies of any of the foregoing.
2. The Consultant and Company each understand that the Information is
proprietary to the Company and Consultant and each agrees to hold the
Information given by the other strictly confidential. The Company and
Consultant each agree that the Information shall be used only by the
Company and Consultant and only for the purpose of reviewing and evaluating
the activities of the Company, and shall not be used for any other purpose
or be disclosed to any third party. Neither the Company nor Consultant
shall have the right to make copies or hold copies or documents except for
reports and notes which have been generated by them, which reports and
notes shall be retained for their exclusive use and shall remain
confidential.
3. It is understood that this Confidentiality Agreement shall not
apply to any information otherwise covered herein (I) which is known to
either the Company or the Consultant prior to the date of the
Confidentiality Agreement, (ii) which is disclosed to the Consultant or the
Company by a third party who has not directly or indirectly received such
Information in violation of an agreement with party from whom it was
received or (iii) which is generally known within the industry.
4. The Company and the Consultant each agree to be fully responsible
and liable to the other for any and all damages caused by reason of
disclosure of Information in violation of this Confidentiality Agreement by
the receiving party or any of its assigns or successors.
5. This Confidentiality Agreement shall be governed by and construed
in accordance with the laws of the State of Florida and shall be
enforceable solely by and be for the sole benefit of the Consultant and
Company, their successors and assigns.
In witness whereof, the Company and the Consultant have executed this Agreement
as of the date above.
Company: Consultant:
/s/ Xxxxxxx X. Xxxxxxx /s/ D. Xxxxx Xxxxxxx
------------------------------ ------------------------------
WGL Entertainment Holding, Inc. D XXXXX XXXXXXX
XXXX XXXXXXX 10-02-06
10-02-06
SCHEDULE C TO CONSULTING AGREEMENT
GRANT OF OPTIONS
The Company also grants the consultant option to purchase stock, and the Company
does hereby grant, convey and warrant to Consultant, 1,038,500,000 shares of
common stock in the Corporation with $.001 par value, more or less as adjusted
as provided herein below (hereinafter, the "Shares") exercisable in one or more
traunches, exercisable at the following "Option Price" for the following
traunches which Option shall be exercisable in whole or in part at any time
prior to 11:59PM EDT on September 04, 2007 (the "Expiration Date"):
Option
1,038,500,000 shares 30% discount
Or to be negotiated the Option Shares will be, prior to delivery to Consultant,
registered pursuant to valid and effective registration statements under either
Form SB-2 or S-8 and the company agrees that the Option Shares shall be freely
tradable and that the existence of any restriction, buy-sell or other limitation
under state or Federal securities laws including but not limited to Rule 144 of
the Securities Act of 1933 and/or registration pursuant to exercise (which shall
be deemed demand registration rights for purposes of determining the obligation
of the Company) and/or the limitations on manner of sale imposed under the
Securities and Exchange Act of 1934 shall be lifted and/or waived by the
Company, at the Company's sole cost, prior to delivery of the Option Shares.
The Company agrees to lend to Consultant the amount due under the Options by
promissory note secured by such stock in the event the Consultant does not have
the cash to acquire same but such note shall be limited to and shall be due in
Forty-Five (45) days whereafter it shall be a default if not paid.
