Exhibit 10.08
CONSULTING AGREEMENT
THIS AGREEMENT is made effective the first day of January, 1999 between
Xxxxx Naturals / 4Health Inc. (hereafter referred to as "the Company"), Xxxx
Xxxxx (hereafter referred to as "Xxxxx"), and Xxxxxxx X. Driver (hereafter
referred to as "Driver"), an independent business advisor providing consulting
services to the Company.
RECITALS
The Company is engaged in the business of manufacturing nutritional
products and Driver is an independent business person having expertise in
providing advice to businesses in dealing with federal, state, local, and
international governments, business opportunities, business acquisition
strategy, securing investors for new business enterprises, and strategic
business planning.
The parties desire to enter into a relationship in which Driver will
provide advisory services as an independent business consultant to the Company.
The Company acknowledges that Driver is a partner in the law firm of Xxxxxx
Xxxxx LLP with important and substantial responsibilities to the law firm, and
therefore understands that he does not wish to be an employee of the Company,
but rather is willing to provide part-time services to the Company in a manner
which will not interfere with his responsibilities as a partner of Xxxxxx Xxxxx
LLP. The Company further acknowledges that Driver will provide the services
contemplated by this Agreement in an individual capacity as a business advisor,
rather than as a partner of Xxxxxx Xxxxx LLP.
NOW THEREFORE, in consideration of the mutual covenants contained herein,
the adequacy and sufficiency of which is hereby acknowledged, the parties agree
as follows:
1. RESPONSIBILITIES AND DUTIES. Driver will serve as a member of the
Company's Advisory Committee, and in such capacity will provide the equivalent
of two days of work time per week on a schedule which will not interfere with
his responsibilities to Xxxxxx Xxxxx LLP. This schedule will be mutually agreed
upon from time to time by the parties. In such capacity, Driver will:
a. Provide strategic advice regarding the Company's dealings with
federal, state, local, and international governments;
b. Establish and facilitate contact with important business leaders
and government policy makers, and assist the Company in developing and
implementing presentations to such persons;
c. Provide strategic advice on the Company's negotiations with other
substantial business entities;
d. Assist the Company to develop and implement strategies designed to
secure additional investors in the Company;
e. Assist the Company in resolving problems with employees of, and
consultants to, the Company;
f. Assist the Company in developing and implementing strategies to
recruit talented employees and consultants to the Company; and
g. Assist the Company in developing and implementing strategic and
tactical business plans.
2. COMPENSATION. For the services to be rendered under this Agreement,
Driver will be compensated as follows:
a. Upon execution of this Agreement, the Company will issue and
deliver to Driver 10,000 shares of the Common Stock of the Company;
b. For so long as this Agreement remains in effect, the Company
will issue and deliver to Driver 5,000 shares of the Common Stock of the
Company on each of the following dates: April 1, 1999; July 1, 1999;
October 1, 1999; January 1, 2000; April 1, 2000; July 1, 2000; October
1, 2000; January 1, 2001; April 1, 2001; July 1, 2001; October 1, 2001;
January 1, 2002; April 1, 2002; July 1, 2002; October 1, 2002; and
December 31, 2002.
c. Upon execution of this Agreement, the Company will issue and
deliver to Driver 250,000 Warrants of the Company in the form attached
hereto as Exhibit A, and exercisable at the common stock price in effect on
December 31, 1998. 15,625 of such Warrants will become exercisable by
Driver for so long as this Agreement remains in effect upon each of the
dates set forth in sub-section 2.b. above. Driver shall have the right to
exercise his purchase, conversion, and other rights under the terms of such
Warrants at any time after such Warrants become exercisable, but no later
than December 31, 2005.
d. Notwithstanding the provisions of sub-sections 2.b. and 2.c.
above:
(1) In the event this Agreement is terminated under the
provisions of section 3 hereafter by the Company as a result of a
material breach of this Agreement by Driver, or is terminated by
Driver for his convenience, all stock which has not previously been
earned under the provisions of sub-section 2.b. above, and all
Warrants which have not previously become exercisable under the
provisions of sub-section 2.c. above, will be forfeited by Driver to
the Company.
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(2) In the event this Agreement is terminated under the
provisions of section 3 hereafter by Driver as a result of a material
breach of this Agreement by the Company, or is terminated by the
Company for its convenience, or in the event of a change of control of
the Company as defined in the Company's Long Term Stock Incentive Plan
in effect on the date of this Agreement, all stock which has not
previously been earned under the provision of sub-section 2.b. above,
and all Warrants which have not previously become exercisable under
the provisions of sub-section 2.c. above, will become immediately
earned and/or exercisable by Driver.
e. In the event that any of the Company's lines of business are
spun-off into separate business entities, Driver will have the right to
receive Common Stock and Warrants in such separate business entities in the
same proportion that his Common Stock and Warrants in the Company bear to
the total issued and outstanding Common Stock and Warrants of the Company,
at the time that any such business lines are spun-off by the Company.
No other compensation or benefits of any kind will be available to Driver under
the terms of this Agreement, except as agreed upon in writing by the parties.
3. TERM AND TERMINATION. This agreement shall take effect on January
1, 1999 and conclude on December 31, 2002, unless sooner terminated by Driver
or the Company pursuant to the provisions of this section. Subject to the
provisions of sub-section 2.d. above, either Driver or the Company may
terminate this Agreement, with or without a breach of this Agreement by the
other party, upon any of the dates set forth in sub-section 2.b. above, so
long as he or it provides a written notice of termination at least 90 prior
to such date. All common stock earned by Driver on such termination date
will be delivered to him, and he will have the right to exercise all Warrants
which become exercisable through such date, in accordance with the provisions
of section 2 above.
4. REIMBURSEMENT OF EXPENSES. Driver will be reimbursed by the Company
for all legitimate business expenses incurred by him (including but not limited
to first-class travel, hotel, rental car, and telephone expenses) so long as
such expenses are evidenced by statements, invoices, receipts, per diem reports,
or similar documents. Driver will reimburse the Company for any and all
payments made by the Company to him for reimbursement of expenses which are
ultimately determined by the Internal Revenue Service not to be deductible to
the Company.
5. INDEMNIFICATION.
a. BY THE COMPANY. In the event that any investigation, claim,
action, or proceeding of any nature is undertaken by any person or entity
alleging liability against Driver which relates to or arises out of this
Agreement, the Company agrees
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to indemnify and hold harmless Driver from all injuries, damages, and
losses sustained by Driver, including but not limited to, all reasonable
attorney fees and court costs. Such attorney fees and court costs shall be
reimbursed by the Company as they are incurred by Driver.
The Company further agrees that it will not, without Driver's prior
written consent (which will not be unreasonably withheld), settle,
compromise, or consent to the entry of judgment, unless such settlement,
compromise, or consent includes an unconditional release of Driver from all
liability arising out of such investigation, claim, action, or proceeding.
Without limiting the generality of the foregoing, the Company
expressly agrees that it will indemnify and hold harmless not only Driver,
but also Xxxxxx Xxxxx LLP, from all injuries, damages, and losses sustained
by it arising out of the services provided by Driver under this Agreement.
The Company further covenants that it will never xxx Xxxxxx Xxxxx LLP for
any injuries, damages, or losses arising out of the services provided by
Driver under this Agreement.
b. BY DRIVER. Driver agrees that he will indemnify and hold harmless
the Company, its officers, directors, and/or other persons having
responsibility for withholding of taxes, from all injuries, damages, and
losses sustained by such persons as a result of his failure to pay state
and federal taxes on the compensation earned by him under this Agreement,
including but not limited to all overdue taxes, penalties, interest,
attorney fees, and court costs. Such attorney fees and court costs shall
be reimbursed by Driver as they are incurred by the Company.
Driver further agrees that he will not, without the Company's prior
written consent (which will not be unreasonably withheld), settle,
compromise, or consent to the entry of judgment, unless such settlement,
compromise, or consent includes an unconditional release of the Company and
its officers, directors, and/or other persons having responsibility for
withholding of taxes from all liability.
6. RELATIONSHIP OF PARTIES.
a. Driver will report directly to Xxxxx or his designee in providing
services under this Agreement.
b. The Company shall exercise no direction and control over Driver's
activities in carrying out his responsibilities under this agreement, and
in all regards, Driver will be treated as an independent contractor to the
Company. Driver will retain discretion and judgment in determining the
means, methods and schedule for providing services under this Agreement, so
long as the Company's assigned responsibilities are carried out in a timely
and efficient manner. The Company may from time to time establish
deadlines, parameters, and specifications with regard to
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services performed for it by Driver, but will not oversee Driver's actual
work or instruct Driver about how the work will be performed.
c. The Company will not provide any equipment, supplies, or
benefits to Driver, other than the use of an office and support services
at the Company's corporate offices in Culver City, California.
d. DRIVER IS NOT ENTITLED TO ANY UNEMPLOYMENT OR WORKERS'
COMPENSATION INSURANCE BENEFITS UNDER THIS AGREEMENT, AND BOTH DRIVER AND
THE COMPANY WILL BE SEPARATELY RESPONSIBLE FOR MAINTAINING IN FORCE THEIR
OWN INSURANCE, INCLUDING BUT NOT LIMITED TO GENERAL LIABILITY INSURANCE,
HEALTH INSURANCE, AND DISABILITY INSURANCE, IN AN AMOUNT REASONABLY
NECESSARY TO COVER THE RISKS ASSOCIATED WITH THIS AGREEMENT. FURTHER,
DRIVER WILL NOT BE ENTITLED TO PARTICIPATE IN ANY PENSION OR PROFIT SHARING
PLANS OR WELFARE BENEFIT PROGRAMS MAINTAINED BY THE COMPANY FOR THE BENEFIT
OF ITS EMPLOYEES.
e. DRIVER IS OBLIGATED TO PAY ALL LOCAL, STATE AND FEDERAL TAX
OBLIGATIONS AS A SELF-EMPLOYED INDIVIDUAL ON ALL COMPENSATION PAID UNDER
THIS AGREEMENT.
f. This agreement will not be construed as creating any sort of
partnership or joint venture relationship between Driver and the Company.
In conformity therewith, neither party shall be liable for any obligation
made or incurred by the other party, unless made or incurred pursuant to
the terms of a separate agreement. Any employees who may be hired by
Driver will not be treated as employees of the Company for purposes of
federal and state unemployment taxes, federal and state withholding taxes,
federal social security, medicare taxes and worker's compensation
insurance.
7. SEVERABILITY. If any provision of this Agreement is declared void or
otherwise unenforceable, the remainder of the provision of this Agreement shall
remain in full force and effect.
8. ASSIGNABILITY. The parties acknowledges that the relationship of the
parties is personal in nature among Driver and the existing officers of the
Company, and therefore that this Agreement shall not be assigned by Driver or
the Company without the express written consent of the other party.
9. CONSTRUCTION. The parties agree that this Agreement will be construed
according to the laws of the State of Colorado, and that any court having
appropriate subject-matter jurisdiction in the State of Colorado shall have
exclusive jurisdiction over any action or proceeding arising under this
Agreement.
10. ENTIRE AGREEMENT. This Agreement contains the entire agreement
between the parties relative to services to be provided by Driver to the
Company. All previous representations and agreements between Driver and the
Company relative to such
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services are hereby merged in and superseded by this Agreement. This Agreement
may not be altered or modified except by an express written agreement among the
parties. Notwithstanding the foregoing, this Agreement shall have no effect on
certain stock options which were previously granted to Driver by the Company on
July 16, 1996.
11. ATTORNEY FEES. The parties agree that in the event of any dispute
arising out of this Agreement, any court or arbitrator resolving the dispute
shall award to the prevailing party his or its costs and reasonable attorney
fees incurred in resolving such dispute.
12. NOTICES. Any notices required to be given under this agreement shall
be deemed to have been properly given if mailed by certified mail to the party
entitled to notice at the following addresses, or to any subsequent address
which is communicated by one party to the other under the provisions of this
section:
Xxxx Xxxxx, President and Chief Executive Officer
Xxxxx Naturals / 4Health Inc.
00000 X. Xxxxxxxxx Xxxxxxxxx
Xxxxxx Xxxx, Xxxxxxxxxx 00000
Xxxxxxx X. Driver
0000 Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000.
Proof of service of such notice shall be a receipt for certified mail showing
the date of mailing.
13. REPRESENTATION AND WARRANTY. As a signatory to this Agreement, Xxxxx
hereby represents and warrants that:
a. He has obtained the approval of the Board of Directors and
Compensation Committee of Xxxxx Naturals / 4Health, Inc. for the issuance
of Common Stock and granting of Warrants of the Company to Driver as
compensation for the services to be provided under this Agreement; and
b. He will secure the opinion of securities counsel for the Company
that the issuance of Common Stock and granting of Warrants of the Company
under this Agreement is in compliance with all applicable requirements of
the United States securities laws, as well as all state securities laws
which may apply, and that such Common Stock and Warrants have been properly
issued and granted by the Company.
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14. PUBLIC ANNOUNCEMENTS. Prior to any press release or other public
disclosure relating to the services to be performed by Driver under this
Agreement, the parties will confer about whether such public disclosure is
appropriate, and if so, will reach an agreement about the contents of any such
disclosure. Except as required by any applicable law, rule, or regulation, no
party shall make any public announcement regarding the relationship of the
parties which arises out of this Agreement without the prior written consent of
the other party(ies).
IN WITNESS WHEREOF, the parties have executed this Agreement with full
knowledge of each and every provision set forth herein.
Xxxxx Naturals / 4Health, Inc.:
By: /s/ Xxxx Xxxxx /s/ Xxxxxxx X. Driver
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President Xxxxxxx X. Driver, Individually
/s/ Xxxx Xxxxx
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Xxxx Xxxxx, Individually
Subscribed and sworn to before me this 1 day of February, 1999, by Xxxx
Xxxxx and Xxxxxxx X. Driver.
/s/ Xxxxxxxxxx X. Xxxxxx
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Notary Public
My Commission Expires: April 26, 2002
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[STAMP]
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