EXHIBIT 10.8
CONSULTING AGREEMENT
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This Consulting Agreement (the "Agreement") is entered into as of April
23,2002, by and between AccuPoll Holding Corp., a Nevada corporation and its
subsidiaries or affiliates (the "Company"), and GCH Capital, Ltd., a California
corporation ("Consultant").
WHEREAS, the Company desires to acquire or merge with other businesses,
dispose of businesses or assets, enter into strategic relationships, and/or
enter into investment banking relationships, and to secure valuable management
consulting to assist the Company in its operations, strategy and in its
negotiations with vendors, customers and strategic partners (the "Company
Objectives");
WHEREAS, the Company recognizes that the Consultant can contribute to
finding, analyzing, structuring and negotiating business sales and/or
acquisitions, joint ventures, alliances and other desirable projects, including
the Company Objectives, which contribution is of great value to the Company and
its shareholders;
WHEREAS, the Company believes it to be important both to the future
prosperity of the Company Objectives and to the Company's general interest to
retain Consultant, on a non- exclusive basis, and have Consultant available to
the Company for consulting services in the manner and subject to the terms,
covenants, and conditions set forth herein;
WHEREAS, in order to accomplish the foregoing, the Company and
Consultant desire to enter into this Agreement, effective as of April 23,2002,
to provide certain assurances as set forth herein.
NOW THEREFORE, in view of the foregoing and in consideration of the
premises and mutual representations, warranties, covenants and promises
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound hereby, agree as follows:
1. RETENTION. The Company hereby retains the Consultant during the
Consulting Period (as defined in Section 2 below), and Consultant
hereby agrees to be so retained by the Company, all subject to the
terms and provisions of this Agreement.
2. CONSULTING PERIOD. The Consulting Period shall commence on April
23,2002 and terminate no earlier than April 23,2004. After April
23,2004, either party may terminate this agreement upon at least 90
days prior written notice.
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3. DUTIES OF CONSULTANT. During the Consulting Period, the Consultant
shall use its reasonable and best efforts to perform those actions and
responsibilities necessary to assist the Company with achieving the
Company Objectives, as instructed by the Company from time to time,
including (i) identifying, analyzing, structuring and/or negotiating
business sales and/or acquisitions, including without limitation,
merger agreements, stock purchase agreements, and any other agreements
relating to such sales or acquisitions (provided that Consultant shall
not engage in any capital raising activities), (ii) assist the Company
in its corporate strategies, (iii) assist the Company in the
implementation of its business plan, (iv) assist the Company in the
negotiation, documentation and closing of strategic alliances,
partnerships, joint ventures, consulting agreements and agreements for
the sale of the Company's products, in each case as requested by the
Company (the "Services"). If the Company, in its sole and absolute
discretion, determines to undertake one or more transactions described
above, the Company shall use its best efforts to provide all necessary
financing required in order to purchase businesses approved by the
Company, including cash or securities. Consultant shall render such
Services diligently and to the best of its ability. Notwithstanding
anything herein to the contrary, Consultant shall not engage in any
capital raising activity, and shall not be responsible for selling, or
soliciting the sale of, any securities, or maintaining a market for the
Company's securities. The Company may engage such other consultants,
investment bankers or other advisers with respect to the activities set
forth in the immediately preceding sentence AS the Company shall deem
appropriate in its sole and absolute discretion, and Consultant shall
not be entitled to any fees or commissions arising out of the
activities of such other consultants, investment bankers or other
advisors, unless Consultant provides Services with respect to such
activities, subject to the limitations set forth in the second sentence
of Section 5(c) hereof.
4. OTHER ACTIVITIES OF CONSULTANT. The Company recognizes that Consultant
shall perform and be compensated for only those services that are
reasonably required to accomplish the goals and objectives set forth
herein, and that Consultant shall provide services to other businesses
and entities other than the Company. Consultant shall be free to
directly or indirectly own, manage, operate, join, purchase, organize
or take preparatory steps for the organization of, build, control,
finance, acquire, lease or invest or participate in the ownership,
management, operation, control or financing of, or be connected as an
officer, director, employee, partner, principal, manager, agent,
representative, associate, consultant, investor, advisor or otherwise
with (collectively, be "Affiliated" with), any business or enterprise,
or permit its name or any part thereof to be used in connection with
any business or enterprise, engaged in any business. Consultant may be
Affiliated with any entity or entities which may provide services to
the Company; provided, however, that the Company shall not be required
to engage any such entity Affiliated with Consultant for any purpose
whatsoever. In addition, the Company acknowledges
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that Consultant has a prior relationship with, and currently has
substantial business dealings with, Xxxxxxx Xxxxxxxx and entities
affiliated with her, and that Consultant will continue to work with Xx.
Xxxxxxxx on this and any other transaction that Consultant deems
desirable. The Company hereby waives any conflict of interest that may
arise from a relationship between Consultant and any entity with which
Consultant is Affiliated, or with Xxxxxxx Xxxxxxxx and any entity with
which she is Affiliated.
5. COMPENSATION. In consideration for Consultant entering into this
Agreement and the Services provided hereunder, the Company shall
compensate Consultant as follows:
a. Monthly Fees and Benefits:
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i. RETAINER. The Company shall issue to Consultant or
its designees a five-year warrant to purchase up to
960,000 shares of the Company's common stock,
exercisable at $0.01 per share. Such warrant shall
vest at the rate of 40,000 shares per month. The
Company shall have the right to redeem all or any
part of the unvested portion of such warrant at any
time for a payment in cash equal to $0.25 per share
of common stock issuable upon exercise of such
unvested portion of the warrant to be redeemed. The
common stock issuable upon exercise of this warrant
shall be registered on Form S-8, if available, or on
any other form of registration statement if Form S-8
is not available, as soon as practicable after the
date hereof.
ii. EXPENSES. The Company shall pay all reasonable
expenses incurred during the Consulting Period by the
Consultant for business purposes related to or in
furtherance of the goals and objectives of the
Company and/or the provision of the Services
(collectively, "Company Purposes"), including,
without limitation, expenses incurred with respect to
the Consultant's travel (including first class
travel), meals and entertainment and other customary
and reasonable expenses for Company Purposes. The
Company shall pay such expenses directly, or, upon
submission of bills, receipts and/or vouchers by the
Consultant, by direct reimbursement to the
Consultant. Notwithstanding the foregoing, the
Company shall not be required to reimburse any single
expense in excess of $500.00 which is not approved in
writing (including by e-mail) in advance by the
Company.
b. WARRANTS. The Company shall issue to Consultant or its
designees a warrant to purchase up to an aggregate of 500,000
shares of Common Stock at an exercise price of $0.25 per
share, which shall vest immediately, and which may be
exercised at any time after the date hereof, substantially in
the form attached hereto (the "Warrants"). The common stock
issuable upon exercise of the
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Warrants shall be registered by the Company at its expense AS
soon as practicable, as reasonably determined in good faith by
the Board of Directors of the Company, after the date hereof
on Form S-8, if available, or on any other form of
registration statement if Form S-8 is not available.
c. FEES FOR ACQUISITION OPPORTUNITIES. The Company shall pay to
the Consultant a fee equal to ten percent (1 0%) of the
aggregate consideration paid for any acquisition or sale by
the Company of any business, corporation or division (a
"Target"), and with respect to which acquisition either (i)
Consultant introduces the parties to the transaction to each
other, or (ii) Consultant provides any Services, including,
but not limited to, acquisitions by stock purchase agreement,
merger agreement, plan of reorganization, asset purchase
agreement or license agreement, which fee shall be paid to
Consultant when the consideration paid or received by the
Company is actually paid or received by the Company.
Notwithstanding the foregoing, Consultant shall not be
entitled to a fee under this Section 5(c) for any transaction
with respect to which (i) the Company provides written notice
to Consultant, prior to Consultant providing Services with
respect to such transaction, instructing Consultant not to
provide Services, and (ii) either (a) Consultant signs such
notice acknowledging receipt thereof, or (b) if Consultant
shall refuse to sign such notice, such notice is sent by
Federal Express, with signature acknowledging receipt
required, to Xxxxx Xxxxxxxx, Esq., Xxxxxxxx & Xxxxxx, 000 X.
Xxxxxxxx Xxxxxx, Xxxxx 000, Xxx Xxxxxxx, Xxxxxxxxxx 00000. For
purposes hereof, the aggregate consideration paid shall
include all cash and stock paid to the seller or sellers of a
Target upon closing of the transaction in addition to any
contingent payments to the seller or sellers, including
without limitation, earnouts, as if all performance targets
are met, as well as any debts or liabilities assumed by the
Company, including without limitation any debts for which the
Company issues a guarantee. For purposes of clarity,
notwithstanding anything herein to the contrary, Consultant
shall not be entitled to any fee hereunder for services
performed in connection with or related to the acquisition of
AccuPoll, Inc. as described in that certain Term Sheet, dated
April 23,2002, between AccuPoll, Inc. and GCH Capital, Ltd.,
or any financing initiated by Xxxxxxx Xxxxxxxx or her
Affiliates.
d. THIRD PARTY COMMISSIONS. Consultant and/or its Affiliates
shall be entitled to share in any fees or commissions payable
by third parties on any transaction described in Section 5(c),
including, but not limited to, any fees payable to Consultant
by a third party lender, financing partner, or other party, or
a seller of a corporation or business, including, without
limitation, investment banking fees or commissions, business
brokerage fees or commissions, finders fees, or any other fee
payable by a third party to Consultant for any reason
including the
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identification of the Company as a potential purchaser or
seller of such corporation or business (a "Transaction
Commission"). The Company hereby waives any conflict of
interest that may arise due to any transaction wherein
Consultant receives such a Transaction Commission, including,
but not limited to, any conflict of interest which may arise
as a result of the dual representation by Consultant of the
seller or purchaser of a corporation or business on the one
hand, and the Company on the other.
e. FEES PAID IN COMMON STOCK. The Company, at its option, may pay
fees due under paragraph (c) of this Section 5 by issuance of
Restricted Common Stock or freely tradeable, registered Common
Stock. Restricted Common Stock shall be issued at a rate equal
to the lesser of (i) fifty percent (50%) of the Market Price
of the Company's common stock on the day prior to the closing
date of a transaction which entitles the Consultant to receive
such fees, or (ii) $0.50 per share. Freely tradeable,
registered Common Stock, pursuant to an effective and current
registration statement, shall be issued at the rate equal to
seventy percent (70%) of the Market Price of the Company's
common stock on the day prior to the closing date of a
transaction which entitles the Consultant to receive such
fees. For purposes of this Section 5(e), the term "Market
Price" as of a particular date shall mean the average of the
three lowest closing prices of the common stock of the Company
reported for the twenty trading days ending on the date in
question. All fees payable hereunder shall be paid within
seven business days following the closing date of a
transaction which entitles the Consultant to receive such
fees. In the event the Common Stock of the Company is not then
listed on a national securities exchange or market, then, at
the Consultant's option, the Company shall pay all fees due
under paragraph (c) of this Section 5 either (i) in the form
of, and based on the same value established by, the
consideration paid or received in the transaction triggering
such fees, or (ii) in cash.
6. REGISTRATION RIGHTS. In the event the Company shall at any time and
from time to time file a registration statement with the Securities and
Exchange Commission, if permitted by applicable securities laws, rules
and regulations applicable to the type of registration statement the
Company is filing, the Company shall register any shares of common
stock of the Company then beneficially owned by Consultant or its
Affiliates, or any Affiliates of the principals of Consultant. The
Company shall provide to Consultant not less than ten business day's
notice prior to any filing of any such registration statement, and
shall include on such registration statement such shares as may be
reasonably requested by Consultant, subject to any cutbacks reasonably
required by the managing underwriter of any fully underwritten offering
where the Company is not acting as the underwriter.
7. TERMINATION. Subject to the cure provisions contained herein, the
Company may
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terminate the Consulting Period upon written notice for Cause at any time.
Cause shall mean that during the Consulting Period, the Consultant engaged in
gross and willful misconduct that is materially and significantly injurious to
the Company, and, after written notice of such conduct, Consultant has failed to
cure such gross and willful misconduct within 30 days. Any termination pursuant
to this section shall be communicated by written Notice of Intended Termination.
For purposes of this Agreement, a "Notice of Intended Termination" shall mean a
notice which shall clearly state the specific termination provision in this
Agreement relied upon and shall set forth in reasonable and specific detail the
facts and circumstances claimed to provide a basis for termination of the
Consulting Period. No Notice of Intended Termination shall be valid unless it is
signed by at least a majority of the board of directors of the Company (the
"Board").
a. Not less than 15 days after receipt of the Notice of Intended
Termination, Consultant shall have the opportunity to a full,
complete and fair hearing in the presence of the entire Board.
Not less than 10 days prior to the hearing, the Board shall
present to Consultant its reasons for the termination,
including the specific actions, inactions, omissions or other
facts relied upon by the Board in making its determination
that Consultant has engaged in gross and willful misconduct
and that the Company has the right to terminate this Agreement
for Cause. Consultant shall have the right to attempt to rebut
any evidence or allegations of wrongdoing at the hearing and
shall have the right to be represented, at Consultant's
expense, by counsel of Consultant's choice at such hearing.
After such hearing, should the Board determine that this
Agreement may properly be terminated for Cause, it shall issue
a written Final Notice of Termination to Consultant, signed by
at least a majority of the Board, setting forth in detail the
specific facts, conclusions and findings of the Board in
determining that Cause exists for the termination of this
Agreement. The Final Notice of Termination shall contain an
effective termination date, which effective termination date
shall be no less than thirty (30) days from the date of the
Final Notice of Termination. In the event of any termination
of this Agreement for any reason, including for Cause, any and
all fees paid, or required to be paid, to the Consultant prior
to the effective date of such Termination, including, without
limitation, the vested portion of any warrants issued
hereunder, shall be deemed fully earned and shall not be
refundable to the Company.
b. In the event the Company terminates this Agreement without
Cause as defined herein, and/or does not fully comply with the
termination and hearing procedures specified in paragraph 7(a)
herein, then the Company shall pay to Consultant, as
liquidated damages, at the Consultant's option, either (a)
$100,000, or (b) the greater of (i) 500,000 shares of Common
Stock which shall be registered with the
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Securities and Exchange Commission and freely tradable or (ii)
the total value of all fees and other compensation paid or
payable to Consultant over the twelve months prior to the date
of the Notice of Intended Termination.
8. NOTICE. Any notice required, permitted or desired to be given pursuant
to any of the provisions of this Agreement shall be deemed to have been
sufficiently given or served for all purposes if delivered in person or
sent by certified mail, return receipt requested, postage and fees
prepaid, or by national overnight delivery prepaid service to the
parties at their addresses set forth below. Any party hereto may at any
time and from time to time hereafter change the address to which notice
shall be sent hereunder by notice to the other party given under this
paragraph. The addresses of the parties are as follows:
TO CONSULTANT:
GCH Capital, Ltd.
000 X. Xxxxxxx Xxxxx, # 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
Tel: (000) 000-0000
Fax: (000) 000-0000
TO THE COMPANY:
ACCUPOLL, INC.
0000 Xxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: President
Tel: (000) 000-0000
Fax: (000) 000-0000
9. WAIVER. No course of dealing nor any delay on the part of either party
in exercising any rights hereunder will operate as a waiver of any
rights of such party. No waiver of any default or breach of this
Agreement or application of any term, covenant or provision hereof
shall be deemed a continuing waiver or a waiver of any other breach or
default or the waiver of any other application of any term, covenant or
provision.
10. DEFINITION OF "REASONABLE AND BEST EFFORTS." Reasonable and best
efforts shall not include the payment of any non-reimbursable
out-of-pocket costs or other payments by Consultant. Consultant shall
not guarantee, make any representation concerning (which representation
would survive the closing of any escrow or other transaction) or
warrant (i) the condition, performance, value, or profitability of any
business purchased, sold by, or
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otherwise considered for purchase or sale by the Company; (ii) the
validity or authorization of any capital stock purchased, sold by, or
otherwise considered for purchase or sale by the Company; (iii) the
market value of any capital stock, business or assets purchased or sold
by, or otherwise considered for purchase or sale by the Company; (iv)
the ability to finance, refinance or otherwise mortgage or encumber any
business or corporation purchased, sold by, or otherwise considered for
purchase or sale by the Company; (vi) that Consultant will find or
present any business or corporation which the Company will consider,
approve or ultimately purchase or be able to purchase; or (vii) the
covenants, representations or warranties of any party to any stock
purchase, asset purchase, merger or other agreement entered into by the
Company with any third party.
11. SUCCESSORS; BINDING; AGREEMENTS. Prior to the effectiveness of any
succession (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business
and/or assets of the Company, or the sale of all or a controlling
interest in the capital stock of the Company, the Company will require
the successor to expressly assume and agree to perform this Agreement
in the same manner and to the same extent that the Company would be
required to perform it if no such succession had occurred. As used in
this Agreement, "Company" shall mean the Company as defined above and
any successor to its business and/or assets which executes and delivers
the Agreement provided for in this Section 11 or which otherwise
becomes bound by all the terms and provisions of this Agreement by
operation of law or otherwise.
12. SURVIVAL OF TERMS. Notwithstanding the termination of this Agreement
for whatever reason, the provisions hereof shall survive such
termination, unless the context requires otherwise.
13. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be AN original, but all
of which together shall constitute one and the same instrument. Any
signature by facsimile shall be valid and binding as if an original
signature were delivered.
14. CAPTIONS. The caption headings in this Agreement are for convenience of
reference only and are not intended and shall not be construed as
having any substantive effect.
15. GOVERNING; LAW. This Agreement shall be governed, interpreted and
construed in accordance with the laws of the state of California
applicable to agreements entered into and to be performed entirely
therein. Any suit, action or proceeding with respect to this Agreement
shall be brought exclusively in the state courts of the state of
California or in the federal courts of the United States which are
located in Los Angeles, California. The parties hereto hereby agree to
submit to the jurisdiction and venue of such courts for the
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purposes hereof. Each party agrees that, to the extent permitted by
law, the losing party in a suit, action or proceeding in connection
herewith shall pay the prevailing party its reasonable attorneys' fees
incurred in connection therewith. THE PARTIES HEREBY WAIVE ANY RIGHT TO
TRIAL BY JURY IN ANY PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OF THE CONTEMPLATED TRANSACTIONS, WHETHER NOW EXISTING
OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR
OTHERWISE. THE PARTIES AGREE THAT ANY OF THEM MAY FILE A COPY OF THIS
PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY
AND BARGAINED-FOR AGREEMENT AMONG THE PARTIES IRREVOCABLY TO WAIVE
TRIAL BY JURY AND THAT ANY PROCEEDING WHATSOEVER BETWEEN THEM RELATING
TO THIS AGREEMENT OR ANY OF THE CONTEMPLATED TRANSACTIONS SHALL INSTEAD
BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING
WITHOUT A JURY.
16. ENTIRE APREEMENT/MODIFICATIONS. This Agreement constitutes the entire
agreement between the parties and supersedes all prior understandings
and agreements, whether oral or written, regarding Consultant's
retention by the Company; provided, however, that all fees previously
earned andor paid to Consultant under prior agreements shall be deemed
earned, and shall be in addition to any fees payable hereunder. This
Agreement shall not be altered or modified except in writing, duly
executed by the parties hereto. This Agreement replaces and supersedes
that certain Consulting Agreement, by and between AccuPoll, Inc., a
Delaware corporation and Consultant, dated as of the same date hereof,
which is between Consultant and a wholly-owned subsidiary of the
Company.
17. WARRANTY. The Company and Consultant each hereby warrant and agree that
each is free to enter into this Agreement, that the parties signing
below are duly authorized and directed to execute this agreement, and
that this Agreement is a valid, binding and enforceable against the
parties hereto.
18. SEVERABILITY. If any term, covenant or provision, or any part thereof,
is found by any court of competent jurisdiction to be invalid, illegal
or unenforceable in any respect, the same shall not affect the
remainder of such term, covenant or provision, any other terms,
covenants or provisions or any subsequent application of such term,
covenant or provision which shall be given the maximum effect possible
without regard to the invalid, illegal or unenforceable term, covenant
or provision, or portion thereof. In lieu of any such invalid, illegal
or unenforceable provision, the parties hereto intend that there shall
be added as part of this Agreement a term, covenant or provision as
similar in terms to such invalid, illegal or unenforceable term,
covenant of provision, or part thereof, as may be possible and be
valid, legal and enforceable.
[signature page follows]
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IN WITNESS HEREOF, the parties hereto have duly executed and delivered
this Agreement as of the day and year first above written.
ACCUPOLL HOLDING CORP., GCH CAPITAL, LTD.,
a NEVADA CORPORATION a CALIFORNIA CORPORATION
By: /s/ Xxxxxx Xxxxxx /s/ Xxxx Xxxxxx
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Xxxxxx Xxxxxx Name: Xxxx Xxxxxx
Chief Executive Officer Title: Corp. Secretary
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