EXHIBIT 10.1
AGREEMENT
between
COMPUDAWN, INC.
d/b/a XxXxxx.xxx
(hereinafter referred to as to "the Company")
and
INTERNET ALTERNATIVES, INC.
(hereinafter referred to as the "Consultant")
WHEREAS the Company is a public company involved the development, sale
and marketing of Computers and related items, and its common shares (the
"Shares") are traded on the Nasdaq Small Cap Market;
AND WHEREAS the Consultant provides business consulting services in
product development, distribution, e-commerce test marketing, and the
procurement of Internet traffic and strategic alliances in the e-commerce
industry.
AND WHEREAS the Company has retained the services of the Consultant to
provide ongoing consulting services as outlined in the attached Web Design and
Services Proposal (the "Proposal") and the Consultant has provided and continues
to provide such services to the Company;
NOW THEREFORE THIS AGREEMENT WITNESSETH that the parties hereto
covenant and agree with each other as follows;
1. The Consultant shall provide consulting services to the Company for a
period of one year from the date of execution of this agreement. For the purpose
of clarification, the consulting services to be provided by the Consultant shall
include, but necessarily be limited to, the following; see attached Proposal.
2. The Company agrees to compensate the Consultant for services rendered to
the Company through the issuance and delivery to the Consultant an aggregate of
200,000 of the Company's Shares by the Company as follows:
(a) 100,000 Shares (i) within five (5) business days after the date of
the effectiveness of the Company's registration statement on Form S-8 (the "Form
S-8") which the Company is required to file pursuant to Paragraph 8 hereof, (ii)
or, at the Consultant's option, within thirty five (35) days after the date
hereof if the Form S-8 has not been filed and declared effective by such time;
(b) 50,000 Shares on the ninetieth (90th) day after the date hereof;
and
(c) 50,000 Shares on the sixth (6th) month anniversary of the date
hereof.
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3. The Company agrees to reimburse the Consultant for proven out-of-pocket
expenses incurred by the Consultant pursuant to the performance of the Company's
duties under the terms of this agreement including but not limited to,
facsimile, postage, printing, photocopying and entertainment, provided that
expenses in excess of $50.00 per item must have been previously approved by the
Company. Reimbursable expenses shall be due and payable when billed to the
Company.
4. The Company agrees to indemnify and save harmless the Consultant and its
sole stockholder from and against any actions, proceedings, claims, judgments
and costs in respect of any matter or thing done or omitted to be done in good
faith (absent negligence) by the Consultant pursuant to the performance of the
Consultant's duties under the terms of this agreement. The Company shall make
available to the Consultant all information concerning the business, assets,
operations and financial condition of the company which the consultant
reasonably requests in connection with the performance of his obligations
hereunder. The Company further covenants that all information supplied to the
Consultant by the Company shall be true, accurate, complete and not misleading,
in all respects. The Consultant may rely on the accuracy of all such information
without independent verification.
5. The term of this agreement shall be two years commencing on the date
hereof.
6. The Company acknowledges the fact that the Consultant represents and may
continue to render consulting services to other companies which may or may not
have policies and conduct activities similar to those of the Company.
7. The Consultant shall not be required to devote any minimum or specific
expenditure of time in performing the services delineated in this Section
provided that the Consultant be reasonably accessible to the Company and shall
devote such efforts to the effective performance of such services as may be
commensurate therewith.
8. Immediately upon the execution hereof, the Company agrees that it will
commence the preparation of a Form S-8 to register (i) the issuance of the
Shares being issued by the Company to the Consultant in connection herewith if
such Shares are issued after the effective date of the Form S-8 or (ii) the
resale of Shares being issued by the Company to the Consultant in connection
herewith if such Shares are issued prior to the effective date of the Form S-8.
The Company shall file such registration statement within twenty (20) days
following the date hereof (the "Registration Period"). In connection with the
agreement made in favor of the Consultant herein, the Company represents that
(i) it is a reporting company under the Securities and Exchange Act of 1934, as
amended, (the "Exchange Act"), (ii) it has filed all reports it is required to
file under the Exchange Act during the twelve month period immediately preceding
this Agreement and hereby covenants with and to the Consultant that it will file
all such reports it is required to file under the Exchange Act during the twelve
month period immediately preceding this
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Agreement and hereby covenants with and to the Consultant that it will file all
such reports it is required to file thereunder within the time period prescribed
therefore under the Exchange Act, and (iii) it will not enter into any agreement
which will in any way conflict or interfere with the Consultant's rights
hereunder without first obtaining the written consent of the Consultant to
entering such agreement, which consent the Consultant shall not unreasonably
withhold.
9. The parties hereto agree that all final decisions with respect to
consultation, advice and services rendered by the Consultant to the Company
shall rest exclusively with the Company and the Consultant covenants not to
release any printed material relating to the Company into the public domain
without the consent of the Company. The Company further convenants to cooperate
fully and timely with the Consultant to enable the Consultant to perform its
obligations hereunder.
10. The Consultant hereby represents and warrants to the Company:
(a) It is a corporation duly organized and validity existing
under the laws of the Bahamas. It is qualified as a foreign corporation in all
jurisdictions where it is required to so qualify. It has full corporate power
and authority to execute and deliver this Agreement and to perform its
obligations and further approvals are necessary.
(b) The execution, delivery and performance of this Agreement
by the Consultant has been duly authorized by the Consultant's Board of
Directors, and no further approvals are necessary.
(c) That neither the execution of this Agreement nor
performance hereunder will (i) violate, conflict with or result in a breach of
any provisions of, or constitute a default (or an event which, with notice or
lapse of time or both, would constitute a default) under the terms, conditions
or provisions of the consultant's Certificate of Incorporation or By-laws, or
any contract, agreement or other instrument or obligation to which the
consultant is a party, or by which it may be bound, or (ii) violate any order,
judgment, writ, injunction or decree applicable to the Consultant.
(d) All of the Consultant's issued and outstanding capital
shares are beneficially owned by one natural person, Xxxxxxx Xxxxx (the "Sole
Stockholder"). The Sole Stockholder owns such capital stock directly and not as
a nominee for any other person or entity. The Consultant meets the definition of
"employee" of the Company under Form S-8 General Instruction A(1)(a)(1), and as
such, the Consultant is eligible to be issued, and/or to sell securities
registered on a registration statement on Form S-8.
(e) In connection with the acquisition of the Shares by the
Consultant from the Company, and the issuance of such Shares by the Company to
the Consultant, if the Shares are issued prior to the effective date of the Form
S-8, the Consultant does hereby represent and warrant to the Company as follows:
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(i) Acquisition for Account. The Consultant represents and
warrants that the Shares purchased by it are being acquired for
its
own account, for investment purposes and not with a view to any
distribution within the meaning of the Securities Act of 1933, as
amended (the "Securities Act"). The Consultant will not sell,
assign, mortgage, pledge, hypothecate, transfer or otherwise
dispose of any of the Shares unless (A) a registration statement
under the Securities Act with respect thereto is in effect and
the prospectus included therein meets the requirements of Section
10 of the Securities Act, or (B) the Company has received a
written opinion of its counsel that, after an investigation of
the relevant facts, such counsel is of the opinion that such
proposed sale, assignment, mortgage, pledge, hypothecation,
transfer or disposition does not require registration under the
Securities Act or any state securities law.
(ii) No Registration. The Consultant understands that the
issuance of the Shares is not being registered under the
Securities Act and the Shares must be held indefinitely unless
they are subsequently registered thereunder or an exemption from
such registration is available.
(iii) Investor Status. The Consultant represents and
warrants further that (A) it is either an "accredited investor,"
as such term is defined in Rule 501(a) promulgated under the
Securities Act, or, either alone or with its purchaser
representative, has such knowledge and experience in financial
and business matters that it is capable of evaluating the merits
and risks of the acquisition of the Shares; (B) it is able to
bear the economic risks of an investment in the Shares,
including, without limitation, the risk of the loss of part or
all of its investment and the inability to sell or transfer the
Shares for an indefinite period of time; (C) it has adequate
financial means of providing for current needs and contingencies
and has no need for liquidity in its investment in the Shares;
and (D) it does not have an overall commitment to investments
which are not readily marketable that is excessive in proportion
to net worth and an investment in the Shares will not cause such
overall commitment to become excessive.
(iv) Review of Material. The Consultant has reviewed the
Company's Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1998, the Company's Quarterly Reports on Form 10-QSB
for the three-month periods ended March 31 and June 30, 1999 and
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the Company's Current Reports on Form 8-K for events dated May
12, June 9, June 29, July 6, July 27, and October 12, 1999 and
has been afforded the opportunity to obtain such information
regarding the Company as it has reasonably requested to evaluate
the merits and risks of the Consultant's investment in the
Shares. No oral or written representations have been made or oral
information furnished to the Consultant or its advisers in
connection with the investment in the Shares.
(v) Legend. The Consultant acknowledges that the following
restrictive legend will be placed on any instrument, certificate
or other document evidencing the Shares:
"The shares represented by this certificate have not
been registered under the Securities Act of 1933.
These shares have been acquired for investment and
not for distribution. They may not be sold, assigned,
mortgaged, pledged, hypothecated, transferred or
otherwise disposed of without an effective
registration statement for such shares under the
Securities Act of 1933 or an opinion of counsel for
the Company that registration is not required under
such Act."
(vi) Company Reliance. The Consultant acknowledges that
counsel to the Company will be relying, and may rely, upon the
foregoing in connection with its opinion of counsel with regard
to the issuance of the Shares to the Consultant and any
subsequent transfer of the Shares by the Consultant and agrees to
advise the Company and the Company's counsel in writing in the
event of any change in any of the foregoing.
(vii) Confirmation of Representations. If the Company
requires, the Consultant will reconfirm the foregoing
representations, with such additions to Paragraph (a)(iv) to
reflect additional review material, if any, at the time of
issuance.
11. The Consultant and the Sole Stockholder, jointly and severally, agrees
to indemnify, hold harmless and defend, the Company and each of its directors
and officers against any and all liabilities, damages, claims actions or
proceedings whatsoever (and all costs and expenses of defending against same or
enforcing this provision) (collectively, the "Claims") suffered by, or brought
against, such indemnified party(ies) arising out of any breach of the
Consultant's representations contained in paragraphs 10(d) and (e) hereof. In
addition, the Consultant shall indemnify such indemnified party(ies) against any
and all Claims suffered or brought against such indemnified party(ies) arising
out of any breach of the Consultant's representations in paragraphs 10(a), (b)
and (c) hereof.
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This paragraph does not limit any other remedies the Company or any other
indemnified party may have under this agreement or otherwise at law or in equity
for breach of such representations or any other provisions hereof.
12. The Consultant is retained by the Company only for the purposes and to
the extent set forth in this Agreement, and its relationship is that of an
independent contractor.
13. Time shall be of the essence of this agreement and every part thereof
and no extensions or variations of this agreement shall operate as a waiver of
this provision.
14. (a) The Consultant agrees that it at all times hereafter will hold in a
fiduciary capacity and in strict confidence all information, data and documents
received from the Company (collectively, "Information") and will not, without
the consent of the Company, use or disclose, directly or indirectly, the
Information in any manner whatsoever, in whole or in part during and after the
term of this Agreement. Notwithstanding the foregoing, the obligations under
this paragraph 14(a) to maintain such confidentiality shall not apply to any
Information (i) that is in the public domain at the time furnished by the
Company, (ii) that becomes in the public domain thereafter through any means
other than as a result of any act of the Consultant or which constitutes a
breach of this Agreement, or (iii) that is required by applicable law to be
disclosed by the Consultant.
(b) The parties agree that the remedy at law in any breach or threatened
breach of the provisions of paragraph 14(a) will be inadequate and the Company
shall, in addition to any other remedies under this agreement or otherwise which
it may have, be entitled to injunctive relief to compel the Consultant to
perform or refrain from action required or prohibited thereunder.
15. Notwithstanding anything to the contrary in this Agreement or the
attached Proposal, the Company shall not be required to pay the Consultant any
compensation for the Consultant's services described in this Agreement,
including without limitation those described in the attached Proposal, except
for the Shares as provided in paragraph 2 hereof.
16. This Agreement sets forth the entire agreement between the parties with
respect to the subject matter hereof. This Agreement is binding on the parties
and their respective successors and assigns, provided however that the
Consultant may not assign this agreement without the prior written consent of
the Company. This Agreement shall be governed and construed in accordance with
the laws of the State of Florida. The Consultant and the Company both agree to
binding arbitration in the event that a dispute arises regarding the time of
issuance and manner of delivery to the Consultant of the Shares in the Company.
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17. Notices shall be addressed to Internet Alternatives, Inc. at;
Internet Alternatives, Inc.
Euro Canadian Center
PO Box N-3742
Nassau, Bahamas
Notices shall be addressed to CompuDawn, Inc. at:
CompuDawn, Inc.
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxxxx Xxxxx, Xxxxxxx 00000
Attention: Chairman of the Board
Notices shall be addressed to Xxxx Xxx Xxxxx at:
Xxxx Xxx Xxxxx
c/o Internet Alternatives, Inc.
Euro Canadian Center
P.O. Box N-3742
Nassau, Bahamas
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IN WITNESS WHEREOF the parties have caused their duly authorized
officers to execute this agreement this 17th day of November 1999.
COMPU-XXXX, INC.
d/b/a XxXxxx.xxx
By: /s/ Xxxx X. Theale
---------------------------------
INTERNET ALTERNATIVES, INC.
By: /s/ Xxxxxxx Xxxxx
---------------------------------
WITH RESPECT TO SECTION 11 ONLY:
/s/ Xxxxxxx Xxxxx
---------------------------------
XXXXXXX XXXXX
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