EXHIBIT 10.1
INDEPENDENT CONSULTING AGREEMENT
This Independent Consulting Agreement ("Agreement"), effective as of
this 11th day of September, 2006 ("Effective Date") is entered into by and
between XXXXXXX XXX, INC. an Illinois corporation (herein referred to as the
"Company") and SUMMIT FINANCIAL PARTNERS, LLC., an Indiana Limited Liability
Company (herein referred to as the "Consultant").
RECITALS
WHEREAS, the Company is a public corporation trading on the OTCBB and;
WHEREAS the Company desires to engage the services of Consultant to
represent the Company in investors' communications and public relations with
existing shareholders, brokers, dealers and other investment professionals as to
the Company's current and proposed activities, and to consult with management
concerning such Company activities;
NOW THEREFORE, in consideration of the promises and the mutual
covenants and agreements hereinafter set forth, the parties hereto covenant and
agree as follows:
1. TERM OF CONSULTANCY. The Company hereby agrees to retain the Consultant to
act in a consulting capacity to the Company, and the Consultant hereby agrees to
provide services to the Company commencing immediately and terminating on
December 11, 2007.
2. DUTIES OF CONSULTANT. The Consultant agrees that it will generally provide
the following specified consulting services through its officers and employees
during the term specified in Section 1, above.
(a) Consult with and assist the Company in developing and implementing
appropriate plans and means for presenting the Company and its business
plans, strategy and personnel to the financial community, establishing
an image for the Company in the financial community, and creating the
foundation for subsequent financial public relations efforts;
(b) Introduce the Company to the financial community, including, but
not limited to, retail brokers, buy side and sell side institutional
managers, portfolio managers, analysts, and financial public relations
professionals;
(c) With the cooperation of the Company, maintain an awareness during
the term of this Agreement of the Company's plans, strategy and
personnel, as they may evolve during such period, and consult and
assist the Company in communicating appropriate information regarding
such plans, strategy and personnel to the financial community;
(d) Assist and consult the Company with respect to its (i) relations
with stockholders, (ii) relations with brokers, dealers, analysts and
other investment professionals, and (iii) financial public relations
generally;
(e) Perform the functions generally assigned to stockholder relations
and public relations departments in major corporations, including
responding to telephone and written inquiries (which may be referred to
the Consultant by the Company); preparing press releases for the
Company with the Company's involvement and approval of press releases,
reports and other communications with or to shareholders, the
investment community and the general public; consulting with respect to
the timing, form, distribution and other matters related to such
releases, reports and communications; and, at the Company's request and
subject to the Company's securing its own rights to the use of its
names, marks, and logos, consulting with respect to corporate symbols,
logos, names, the presentation of such symbols, logos and names, and
other matters relating to corporate image;
(f) Upon and with the Company's direction and written approval,
disseminate information regarding the Company to shareholders, brokers,
dealers, other investment community professionals and the general
investing public;
(g) Upon and with the Company's direction, conduct meetings, in person
or by telephone, with brokers, dealers, analysts and other investment
professionals to communicate with them regarding the Company's plans,
goals and activities, and assist the Company in preparing for press
conferences and other forums involving the media, investment
professionals and the general investment public;
(h) At the Company's request, review business plans, strategies,
mission statements budgets, proposed transactions and other plans for
the purpose of advising the Company of the public relations
implications thereof; and
(i) Otherwise perform as the Company's consultant for public relations
and relations with financial professionals.
3. ALLOCATION OF TIME AND ENERGIES. The Consultant hereby promises to perform
and discharge faithfully the responsibilities which may be assigned to the
Consultant from time to time by the officers and duly authorized representatives
of the Company in connection with the conduct of its financial and public
relations and communications activities, so long as such activities are in
compliance with applicable securities laws and regulations. Consultant and staff
shall diligently and thoroughly provide the consulting services required
hereunder. Although no specific hours-per-day requirement will be required,
Consultant and the Company agree that Consultant will perform the duties set
forth herein above in a diligent and professional manner. The parties
acknowledge and agree that a disproportionately large amount of the effort to be
expended and the costs to be incurred by the Consultant and the benefits to be
received by the Company are expected to occur within or shortly after the first
two months of the effectiveness of this Agreement. It is explicitly understood
that neither the price of the Company's common stock, nor the trading volume of
the Company's common stock hereunder measure Consultant's performance of its
duties. It is also understood that the Company is entering into this Agreement
with Consultant, a corporation and not any individual member or employee
thereof, and, as such, Consultant will not be deemed to have breached this
Agreement if any member, officer or director of the Consultant leaves the firm
or dies or becomes physically unable to perform any meaningful activities during
the term of the Agreement, provided the Consultant otherwise performs its
obligations under this Agreement.
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4. REMUNERATION.
4.1 (a) For undertaking this engagement, for previous services
rendered, and for other good and valuable consideration, the Company
agrees to sell to Consultant 1,736,111 (One Million Seven Hundred
Thirty Six Thousand One Hundred Eleven) restricted shares of the
Company's Common Stock ("Common Stock") at $0.072 per share for a total
purchase price of $125,000 (One Hundred Twenty Five Thousand Dollars).
The purchase price shall be payable by wire transfer of immediately
available funds on or before September 25, 2006. In addition, the
Company shall issue, or have issued, to the Consultant 2,763,889 (Two
Million Seven Hundred Sixty Three Thousand Eight Hundred Eighty Nine)
shares of Common Stock (all shares, collectively, the "Shares"). The
Shares are to be issued to Consultant's principals in the following
manner: - Xxxxxxx X. Xxxxxxxxx 3,150,000 shares, Xxxx X. Xxxxx 900,000
shares and Xxxxxxx X. Xxxxxx 450,000 shares. The aforementioned
principals shall be included in the aforementioned definition of
Consultant. These Shares shall be fully paid and non-assessable and
stock certificates representing these Shares shall be delivered by
overnight courier upon receipt of the wire transfer of $125,000.
(b) Consultant agrees that the Company may, in its sole
discretion, cause one or more shareholders of the Company to deliver
any of or all of the Shares to be issued and delivered to Consultant
hereunder.
4.2 The Shares referenced in Section 4.1 constitute payment for
Consultant's agreement to consult to the Company for the twelve month
period set forth in Section 1 and for services to be rendered hereunder
and no further amounts are due by the Company for services to be
rendered by Consultant hereunder. Consultant agrees and understands
that if during the term of this Agreement, Consultant performs
substantial services for any direct competitor of the Company, the
Shares issued to Consultant hereunder will be forfeited.
4.3 Company and Consultant acknowledge and agree that for purposes of
the Company's internal accounting practices, the Company may desire to
allocate all or a portion of the Shares referenced in Section 4.1 to
any number of the services provided by the Consultant to the Company
under this Agreement consistent with the United States generally
accepted accounting practices. Accordingly, Consultant agrees to
cooperate with the Company, and will provide to the Company reasonable
support and documentation in connection with any such allocation
process.
4.4 Company warrants that the Shares issued to Consultant under this
Agreement by the Company shall be or have been validly issued, fully
paid and non-assessable and that the Company's board of directors has
or shall have duly authorized the issuance and any transfer of them to
Consultant.
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4.5 Consultant acknowledges that the Shares to be issued pursuant to
this Agreement have not been registered under the Securities Act of
1933, as amended (the "Securities Act") and are "restricted securities"
within the meaning of Rule 144 of the Act. As such, the Shares may not
be resold or transferred unless the Company has received an opinion of
counsel and in form reasonably satisfactory to the Company that such
resale or transfer is exempt from the registration requirements of that
Securities Act. The Company will provide Consultants with Rule 144
opinions per the request of Consultants and only after the one year
hold period has expired.
4.6 In connection with the acquisition of the Shares, each Consultant
represents and warrants to the Company, to the best of its/his
knowledge, as follows:
(a) Each of them has been afforded the opportunity to ask questions of
and receive answers from duly authorized officers or other
representatives of the Company concerning an investment in the Shares,
and any additional information that each of them has requested.
(b) Each of their investment in restricted securities is reasonable in
relation to its/his net worth, which is in excess of ten (10) times the
Consultant's cost basis in the Shares. Each of them has had experience
in investments in restricted and publicly traded securities, and each
of them has had experience in investments in speculative securities and
other investments that involve the risk of loss of investment. Each of
them acknowledges that an investment in the Shares is speculative and
involves the risk of loss. Each of them has the requisite knowledge to
assess the relative merits and risks of this investment without the
necessity of relying upon other advisors, and each of them can afford
the risk of loss of his entire investment in the Shares. Each of them
is an accredited investor, as that term is defined in Regulation D
promulgated under the Securities Act.
(c) Each of them is acquiring the Shares for its/his own account for
long-term investment and not with a view toward resale or distribution
thereof except in accordance with applicable securities laws.
5. FINDERS FEE. Consultant has agreed to Introduce the Company to third parties
described herein, for the purpose of evaluating a potential transaction
involving either an equity or debt financing (a "Financing") transaction . The
Company agrees, for itself, and on behalf of its directors, officers, employees,
agents, advisors, affiliates or their respective representatives, to compensate
Consultant in the event that the Company consummates a Financing Transaction
with a third party described herein within three years from the date of
introduction as indicated below;
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5.1 TERMS OF COMPENSATION.
a. FEE.
i. It is understood that in the event Consultant directly Introduces
Company to a person or entity, not already having a preexisting
relationship with the Company, with whom Company, or its
nominees, ultimately finances or causes the completion of a
Financing with a person or entity, Company agrees to compensate
Consultant for such services with a "finder's fee" in the amount
of 7% of total gross funding provided by such lender or equity
purchaser, such fee to be payable in cash.
ii. It is understood that in the event Consultant Introduces Company
to an intermediary or broker dealer, not already having a
preexisting relationship with Company, with whom Company, or its
nominees, ultimately finances or causes the completion of a
Financing with a person or entity, Company agrees to compensate
Consultant for such services with a "finder's fee" in the amount
of 3% of total gross funding provided by such intermediary or
broker dealer, such fee to be payable in cash. This will be in
addition to any fees payable by Company to said intermediary or
broker dealer, if any, which shall be per separate agreements
negotiated between Company and such other intermediary or broker
dealer.
iii. Company agrees that said compensation to Consultant shall be paid
in full at the time said financing or acquisition/merger is
closed, such compensation to be transferred by Company to
Consultant within five (5) business days of the closing of a
financing transaction.
iv. Consultant agrees that the fees described in subparagraphs 5.1a(
i)-(ii) are non-cumulative.
b. INTRODUCTION. For the purposes of this Agreement, a person described
in subparagraphs 5.1(a)(i)-(ii) herein shall be considered to have
been "Introduced" to the Company through Consultant if the person was
Introduced to the Company or its officer or directors directly by
Consultant or his agents. Consultant will notify Company, in writing,
of the name and address of the introduced party that it makes for
potential sources of financing within 3 days of introduction via
confirmed delivery of a facsimile memo or email, the receipt of which
shall be confirmed by the Company by return of said facsimile written
memo or email. The Company shall confirm receipt of Consultant's
written memo or email as soon as practicable after receipt. If Company
has a preexisting relationship with such nominee and believes such
party should be excluded from this Agreement, then Company will notify
Consultant immediately within five (5) business days of the Company's
confirmed receipt of Consultant's notification of such introduced
party via facsimile memo or email. Consultant shall confirm receipt of
any and all exclusions as soon as practicable after receipt.
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c. Status. IT IS SPECIFICALLY UNDERSTOOD THAT CONSULTANT IS NOT AND DOES
NOT HOLD ITSELF OUT BE A BROKER/DEALER, BUT IS MERELY A "FINDER" IN
REFERENCE TO THE COMPANY PROCURING FINANCING SOURCES. IN THE EVENT THE
CONSULTANT IS DEEMED TO BE A BROKER/DEALER INCONSISTENT WITH THE
REPRESENTATION HEREIN, THEN THE INDEMNIFICATION PROVISIONS OF
PARAGRAPH 8 SHALL APPLY TO ANY FINES, SUSPENSIONS, DE-LISTINGS OR
OTHER CONSEQUENCES INCURRED BY THE COMPANY AS A RESULT OF THE SERVICES
PROVIDED OR CONTRACTED FOR IN THIS AGREEMENT. THE CONSULTANT WILL ONLY
BE INTRODUCING THE COMPANY TO SUCH POTENTIAL ENTITIES AND WILL NOT BE
RESPONSIBLE FOR THE STRUCTURING OF ANY TRANSACTION. Any obligation to
pay a "Finder's Fee" hereunder shall survive the merging, acquisition,
or other change in the form of entity of the Company and to the extent
it remains unfulfilled shall be assigned and transferred to any
successor to the Company. The Company agrees that no reference to the
Consultant will be made in any press release or advertisement of any
transaction without the express approval, in writing, of such release
by Consultant.
6. NON-EXCLUSIVE AGREEMENT. Notwithstanding the foregoing or anything to the
contrary stated herein, the Company and Consultant agree that this Agreement
shall be exclusive only to the Investors and otherwise shall not prohibit the
Company from entering into any other stock purchase or any other agreement with
parties other than the Investors, nor shall this Agreement prohibit the Company
from entering into any investment banking relationship, merger agreement, or
underwriting agreement with any other party. If the Company completes a
Transaction with a person described in subparagraphs 5.1(a)(i)-(ii) herein
Introduced to the Company through Consultant during the term of this Agreement
and with whom the Company did not have a pre-existing relationship at the time
of the Introduction, the Company shall pay Consultant concurrently with the
closing of such Transaction the cash due pursuant to Section 5.
7. INDEMNIFICATION OF CONSULTANT. The Company warrants and represents that all
oral communications, written documents or materials furnished to Consultant or
the public by the Company with respect to financial affairs, operations,
profitability and strategic planning of the Company are accurate in all material
respects and Consultant may rely upon the accuracy thereof without independent
investigation. The Company will protect, indemnify and hold harmless Consultant
against any claims or litigation including any damages, liability, cost and
reasonable attorney's fees as incurred with respect thereto resulting from
Consultant's communication or dissemination of any said information, documents
or materials excluding any such claims or litigation resulting from Consultant's
communication or dissemination of information not provided or authorized by the
Company. The Company shall indemnify and hold harmless Consultant and its
officers, directors, agents and employees from any loss, damage or liability
resulting from Company's violation of the terms of this Agreement or any
agreement between the Company and any of the Investors regarding the Investment.
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8. INDEMNIFICATION OF COMPANY. Consultant agrees to indemnify, defend and hold
harmless Company and its officers, directors, agents and employees from any
loss, damage or liability resulting from Consultant's violation of the terms of
this Agreement, Consultant's violation of any agreement between the Company and
any of the Investors regarding the Investment, or Consultant's negligence,
recklessness, bad faith or intentional misconduct including violations of any
securities act or regulations, bodily injury or property damage claims relating
to the engagement of Consultant herein.
9. CONFIDENTIALITY. To the extent that, in connection with this engagement, we
come into possession of any proprietary or confidential information of the
Company, we will not disclose such information to any third party without the
Company's consent, except (a) as may be required by law, regulation, judicial or
administrative process, or in accordance with applicable professional standards,
or in connection with litigation pertaining hereto, or (b) to the extent such
information (i) shall have otherwise become publicly available (including,
without limitation, any information filed with any governmental agency and
available to the public) other than as the result of a disclosure by Consultants
in breach hereof, (ii) is disclosed by the Company to a third party without
substantially the same restrictions as set forth herein, (iii) becomes available
to us on a non-confidential basis from a source other than the Company which we
believe is not prohibited from disclosing such information to us by obligation
to the Company, (iv) is known by us prior to its receipt from the Company
without any obligation of confidentiality with respect thereto, or (v) is
developed by us independently of any disclosures made by the Company to
Consultants of such information.
10. INDEPENDENT CONTRACTOR. In providing services to the Company under this
Agreement, Consultant shall be an independent contractor, and no party to this
Agreement shall make any representations or statements indicating or suggesting
that the joint venture, partnership, or other such relationship exist between
Consultant and the Company. Consultant shall not be entitled to make any
comments or create any obligations on behalf of the Company without the
Company's prior written consent.
11. AMENDMENT. This Agreement may be amended or modified at any time and in any
manner only by an instrument in writing executed by the parties hereto.
12. HEADINGS. This section and subsection headings in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
13. ASSIGNMENT. This Agreement nor any right created by it may be assigned by
Consultant without the prior written consent of the Company.
14. COUNTERPARTS. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute on and the same instrument.
15. SEVERABILITY. If any part of this Agreement is deemed to be unenforceable
the balance of this Agreement shall remain in full force and effect.
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16. ASSIGNABILITY. Company shall assure that in the event of any merger,
acquisition, or similar change of form of entity that its successor entity shall
agree to complete all obligations, if any, to Consultant. Consultant shall not
assign its rights or delegate its duties hereunder without the prior written
consent of Company.
17. EXPENSES. Consultant agrees to pay for all its expenses (phone, travel,
mailing, faxing, labor, etc.), not including extraordinary items (luncheons or
dinners to large groups of investment professionals, investor conference calls,
print advertisements in publications, etc.) approved by the Company in writing
prior to its incurring an obligation for reimbursement. The Company agrees and
understands that Consultant will not be responsible for preparing or mailing due
diligence and/or investor packages on the Company, and that the Company will
have some means to prepare and mail out investor packages at the Company's
expense.
18. REPRESENTATIONS. Consultant represents that it is not required to maintain
any licenses and registrations under federal or any state regulations necessary
to perform the services set forth herein. Consultant acknowledges that, to the
best of its knowledge, the performance of the services set forth under this
Agreement will not violate any rule or provision of any regulatory agency having
jurisdiction over Consultant. Consultant acknowledges that, to the best of its
knowledge, Consultant and its officers and directors are not the subject of any
investigation, claim, decree or judgment involving any violation of the SEC or
securities laws. Consultant further acknowledges that it is not a securities
Broker Dealer or a registered investment advisor. Company acknowledges that, to
the best of its knowledge, that it has not violated any rule or provision of any
regulatory agency having jurisdiction over the Company. Company acknowledges
that, to the best of its knowledge, Company is not the subject of any
investigation, claim, decree or judgment involving any violation of the SEC or
securities laws.
19. LEGAL REPRESENTATION. Each of Company and Consultant represents that they
have consulted with independent legal counsel and/or tax, financial and business
advisors, to the extent that they deemed necessary.
20. STATUS AS INDEPENDENT CONTRACTOR. Consultant's engagement pursuant to this
Agreement shall be as independent contractor, and not as an employee, officer or
other agent of the Company. Neither party to this Agreement shall represent or
hold itself out to be the employer or employee of the other. Consultant further
acknowledges the consideration provided hereinabove is a gross amount of
consideration and that the Company will not withhold from such consideration any
amounts as to income taxes, social security payments or any other payroll taxes.
All such income taxes and other such payment shall be made or provided for by
Consultant and the Company shall have no responsibility or duties regarding such
matters. Neither the Company nor the Consultant possesses the authority to bind
each other in any agreements without the express written consent of the entity
to be bound.
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21. ATTORNEY'S FEE. If any legal action or any arbitration or other proceeding
is brought for the enforcement or interpretation of this Agreement, or because
of an alleged dispute, breach, default or misrepresentation in connection with
or related to this Agreement, the successful or prevailing party shall be
entitled to recover reasonable attorneys' fees and other costs in connection
with that action or proceeding, in addition to any other relief to which it or
they may be entitled.
22. WAIVER. The waiver by either party of a breach of any provision of this
Agreement by the other party shall not operate or be construed as a waiver of
any subsequent breach by such other party.
23. NOTICES. All notices, requests, and other communications hereunder, unless
otherwise indicated herein, shall be deemed to be duly given if in writing and
by U.S. mail certified, return receipt requested, postage prepaid or delivered
by overnight courier addressed to the other party at the address as set forth
herein below:
XXXXXXX XXX, INC. SUMMIT FINANCIAL PARTNERS, LLC:
Xxxxxxxxx X. XxXxxx, President Xxxxxxx X. Xxxxxxxxx, President
00 Xxxx Xxxxxxxx Xxxxxx 00000 Xxxx Xxxxxxx Xxxx., Xxxxx 000
Xxxxxxxx, XX 00000 Carmel, IN. 46032
It is understood that either party may change the address to which notices for
it shall be addressed by providing notice of such change to the other party in
the manner set forth in this paragraph.
24. CHOICE OF LAW. This Agreement shall be governed by, construed and enforced
in accordance with the laws of the State of Indiana.
25. ARBITRATION. Any controversy or claim arising out of or relating to this
Agreement, or the alleged breach thereof, or relating to Consultant's activities
or remuneration under this Agreement, shall be settled by binding arbitration in
Indianapolis, IN in accordance with the applicable rules of the American
Arbitration Association, Commercial Dispute Resolution Procedures, and judgment
on the award rendered by the arbitrator(s) shall be binding on the parties and
may be entered in any court having jurisdiction.
26. COMPLETE AGREEMENT. This Agreement contains the entire agreement of the
parties relating to the subject matter hereof. This Agreement and its terms may
not be changed orally but only by an agreement in writing signed by the party
against whom enforcement of any waiver, change, modification, extension or
discharge is sought.
SIGNATURES APPEAR ON FOLLOWING PAGE
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
AGREED TO:
COMPANY: XXXXXXX XXX, INC.
By: /s/ Xxxxxxxxx X. XxXxxx
------------------------------------------------
Name: Xxxxxxxxx X. XxXxxx
Title: President, and its Duly Authorized Agent
CONSULTANT: SUMMIT FINANCIAL PARTNERS, LLC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: President and its Duly Authorized Agent
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