[OBJECT OMITTED]
ENGAGEMENT AGREEMENT
This Agreement is effective as of the date of execution, by and between
Xxxxxxxxx.xxx Inc, 00 Xxxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx X0X 0X0
(referred to as "Company"), and entrenet2 Capital Advisors, LLC, 0000 Xxxxxx
Xxxxx, Xxxxx 000,Xxxxx Xxxx, Xxxxxxxxxx 00000 (referred to as "entrenet").
Company desires to have services provided by entrenet.
Therefore, the parties agree as follows:
1. DESCRIPTION OF SERVICES. Beginning on the Effective Date, entrenet will
provide the services, (collectively, the "Services") as described in
Exhibit A attached hereto and incorporated herein by reference.
2. PERFORMANCE OF SERVICES. The manner in which the Services are to be
performed and the specific hours to be worked by entrenet shall be
determined by entrenet. entrenet shall, and the Company will rely on
entrenet's promise to work as many hours as may be reasonably necessary
to fulfill entrenet's obligations under this Agreement.
3. PAYMENT. Company will pay a fee to entrenet for the Services in an
amount and under terms and conditions as described in Exhibit A.
4. TRANSACTION. For purposes of this Agreement, the term "Transaction"
shall mean, whether in one or a series of transactions: Any capital
financing, including without limitation, any financing for debt,
equity, capital stock (common or preferred), convertible instruments,
lines of credit and secured and/or unsecured debt; Any merger or
acquisition activity including without limitation, (i) the acquisition,
directly or indirectly, through purchases, sales, or otherwise, of any
or all portions of the securities of the Company by an investor or (ii)
any merger, consolidation, reorganization, recapitalization,
restructuring or other business combination involving the Company and
an investor.
5. CONSIDERATION. For purposes of this Agreement, the term "Consideration"
means the total proceeds and other consideration paid and to be paid or
contributed directly or indirectly, in connection with a Transaction
(which consideration shall be deemed to include amounts paid or to be
paid into escrow) to the Company and its shareholders, including,
without limitation: (i) cash; (ii) notes, securities, and other
property (including all options, warrants or other instruments or
arrangements convertible into or exercisable for any of the foregoing)
at the fair market value thereof; (iii) liabilities assumed; (iv)
payments to be made in installments; (v) amounts paid or payable under
management, consulting, supply, service, distribution, technology
transfer or licensing agreements, and real property or equipment lease
agreements, and agreements not to compete, and other similar
arrangements (including such payments to management), entered into
other than in the ordinary course of business; and (vi) contingent
payments, if actually paid (whether or not related to future earnings
or operations). The fair market value of non-cash consideration
consisting of securities shall be determined based upon (A) the closing
sale price for such securities on the registered national securities
exchange providing the primary market therein on the last trading day
prior to the date of receipt thereof by the Company or its
shareholders, (B) if such securities are not so traded, the average of
the closing bid and asked prices, as reported by the National
Association of Securities Dealers Automated Quotation System on the
last trading day prior to the date of receipt thereof by the Company or
its shareholders, or (C) if such securities are not so traded or
reported, agreement between the Company and entrenet. The fair market
value of any non-cash Consideration other than securities shall be
determined by agreement of the Company and entrenet. If all or any
portion of the Consideration is to be paid over time, then that portion
of the Transaction Fee attributable thereto shall be payable, in the
sole discretion of entrenet, either (i) as and when such payments are
made or (ii) upon consummation of a Transaction, calculated based on
the present value of such Consideration utilizing a discount rate of 7%
per annum.
6. ACCOUNTING AND INSPECTION RIGHTS. For all compensation referred to in
Exhibit A, it is further agreed that Company shall maintain written
records in sufficient detail for purposes of determining the amount of
Fees due entrenet. Company shall provide to entrenet a written
accounting that sets forth the manner in which Fee payments were
calculated. Upon 15 days notice, entrenet or entrenet's agent shall
have the right to inspect Company's records for the limited purpose of
verifying the calculation of Fee payments, subject to such restrictions
as Company may reasonably impose to protect the confidentiality of the
records. Such inspections shall be made at the company's principal
place of business during regular business hours as may be set by the
Company.
7. EXPENSE REIMBURSEMENT. entrenet shall be entitled to reimbursement from
Company as described in Exhibit A.
8. TERM/TERMINATION. This Agreement shall be effective upon signing and
shall have an initial term and such renewal terms as shall be described
in Exhibit A. The termination of this engagement is also defined in
Exhibit A.
9. RELATIONSHIP OF PARTIES. It is understood by the parties that entrenet
is an independent contractor with respect to Company, and not an
employee of Company. Company will not provide fringe benefits, such as
health insurance benefits, paid vacation, or any other employee
benefit, for the benefit of entrenet.
10. INDEMNIFICATION. Recognizing that entrenet's role under this Agreement
is advisory, by its acceptance of this Agreement the Company (i) agrees
to indemnify and hold harmless entrenet its directors, officers, agents
and employees ("Indemnified Persons") against all losses, claims,
damages, penalties, judgments, liabilities and expenses of every kind
whatsoever (including, without limitation, all fees and expenses of
litigation or preparation therefore, whether or not entrenet is a party
thereto) (collectively "Liabilities") which any of them may pay or
incur arising out of or related to the Transaction or services which
are the subject of this letter; and (ii) herby expressly and
irrevocably waives any and all rights and objections which it may have
against any Indemnified Persons in respect of any Liability arising out
of or relating to the Transaction or services which are the subject of
this letter, except to the extent in either (i) or (ii) such Liability
arises primarily from entrenet's gross negligence or willful
misconduct. The Company further agrees not to settle any claim,
litigation or proceeding relating to a Transaction (whether or not
entrenet is a party thereto) unless such settlement releases entrenet,
its officers, directors and employees from any and all liability in
respect of such Transaction. For the purposes of enforcing this
indemnity and with respect to all claims and disputes under or relating
to this Agreement, the Company and entrenet irrevocably submit to the
exclusive jurisdiction of the State and Federal Courts in the State of
California as the sole and exclusive forum for the resolution of such
claims and disputes and irrevocably waives any objection as to venue or
inconvenient forum. IF THIS LETTER OR ANY ACT, OMISSION OR EVENT
DESCRIBED IN THIS PARAGRAPH BECOMES THE SUBJECT OF A DISPUTE, THE
COMPANY AND ENTRENET EACH HERBY WAIVE TRIAL BY JURY. Without limiting
the generality of this Section, any liability of entrenet to the
Company hereunder together with any liability of entrenet under the
Agreement shall not exceed the amount of the aggregate fees paid to
entrenet under this Agreement.
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11. COOPERATION, CONFIDENTIALITY, ETC. (a) The Company shall furnish
entrenet with all information and data which entrenet shall reasonably
deem appropriate in connection with its activities on the Company's
behalf, and shall provide entrenet full access to the Company's
officers, directors, employees and professional advisors. The Company
recognizes and confirms that entrenet in acting pursuant to this
engagement will be using information in public reports and other
information provided by others, including information provided by the
Company, and that entrenet does not assume responsibility for, and may
rely without independent verification upon, the accuracy or
completeness of any such information. (b) the Company agrees that
entrenet's advice is for the use and information of the Company's
management and Board of Directors only and the Company will not
disclose such advice to others (except the Company's professional
advisors and except as required by law) or summarize or refer to such
advice without, in each case, entrenet's prior written consent.
Notwithstanding anything to the contrary contained in the foregoing, in
the event the Company is required by law to make any filings with any
governmental authority (including without limitation the Securities and
Exchange Commission) which mention entrenet or any disclosure to the
holder of its securities concerning entrenet, the Company shall afford
entrenet the opportunity to review such disclosure in advance and to
approve the form thereof, such approval not to be unreasonably withheld
or delayed. entrenet agrees that it will not, without the prior written
consent of the Company, disclose, to any third party any confidential
information provided by the Company to entrenet in connection with this
engagement, except to the extent (i) such disclosure is required by
applicable law, regulation or legal process, (ii) such information
becomes publicly known other than as a result of the breach by entrenet
of its obligations set forth in this sentence, and (iii) such
disclosure is requested or required by any bank regulatory authority
having jurisdiction over entrenet.
12. OTHER TRANSACTIONS. The Company acknowledges that entrenet and its
affiliates may have and may in the future have investment and
commercial banking, trust and other relationships with parties other
than the Company, which parties may have interests with respect to a
Transaction. Although entrenet in the course of such other
relationships may acquire information about the Transaction, potential
investors or such other parties, entrenet shall have no obligation to
disclose such information to the Company or to use such information on
the Company's behalf. Furthermore, the Company acknowledges that
entrenet may have fiduciary or other relationships whereby entrenet may
exercise voting power over securities of various persons, which
securities may from time to time include securities of the Company,
potential investors or to others with interests with respect to a
Transaction. The Company acknowledges that entrenet may exercise such
powers and otherwise perform its functions in connection with such
fiduciary or other relationships without regard to its relationship to
the Company hereunder.
13. ACKNOWLEDGMENT OF SERVICES PROVIDED. entrenet may include descriptions
of services provided by entrenet to the Company in entrenet's
promotional materials. entrenet shall also have the right to place
notices ("Tombstones") in financial and other newspapers and journals
at entrenet's own expense describing its services to Company under this
Agreement. entrenet may not otherwise publicly refer to the Company
without the Company's prior consent.
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14. NOTICES. All notices required or permitted under this Agreement shall
be in writing and shall be deemed delivered when delivered in person or
deposited in the United States mail, first class postage prepaid,
addressed as follows:
IF FOR COMPANY:
Xxxxxxxxx.xxx Inc
Declan French
Chairman and Chief Executive Officer
00 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx X0X 0X0
FAX - (000) 000-0000
EMAIL - xxxxxxx@xxxxxxxxx.xxx
IF FOR ENTRENET:
---------------
entrenet2 Capital Advisors, LLC
Xxxx Xxxxxxxxxx
Managing Director
0000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxx Xxxx, XX 00000
FAX - 000-000-0000
EMAIL - xxxx@xxxxx.xxx
Such addresses may be changed from time to time by either party, by
providing written notice to the other in the manner set forth above.
15. ARBITRATION AND CONSENT TO JURISDICTION. Any dispute and/or controversy
relating to or arising from the interpretation and/or application of
this Agreement shall be submitted at the request of the Company or
entrenet to a neutral arbitrator selected by the parties from a
mutually acceptable panel of arbitrators for a determination which
shall be final and binding as to the parties thereto. Arbitration shall
take place in the providence of Ontario, Canada. The decision and award
of the arbitrator may include the cost of the arbitration proceedings
and may include reasonable attorney fees for the successful party.
Nothing herein contained shall be deemed to affect the rights of any
Party to serve process in any manner other than as permitted by law.
16. ENTIRE AGREEMENT. This Agreement, along with any Exhibits attached
hereto, contains the entire agreement of the parties with respect to
the subject matter and supersedes any other agreement whether oral or
written which are not fully expressed herein, except for carryover
provisions of any previous executed agreements between entrenet and
Company.
17. AMENDMENT. This Agreement may be modified or amended if the amendment
is made in writing and is signed by both parties.
18. SEVERABILITY. If any provision of this Agreement shall be held to be
invalid or unenforceable for any reason, the remaining provisions shall
continue to be valid and enforceable. If a court finds that any
provision of this Agreement is invalid or unenforceable, but that by
limiting such provision it would become valid and enforceable, then
such provision shall be deemed to be written, construed, and enforced
as so limited.
19. WAIVER OF CONTRACTUAL RIGHT. The failure of either party to enforce any
provision of this Agreement shall not be construed as a waiver or
limitation of that party's right to subsequently enforce and compel
strict compliance with every provision of this Agreement.
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20. APPLICABLE LAW. This Agreement shall be governed by the laws of the
State of California, excluding that body of law known as conflict of
laws.
XXXXXXXXX.XXX INC. ENTRENET(2) CAPITAL ADVISORS, LLC
/S/ Declan French /S/ Xxxx Xxxxxxxxxx
By ________________________________________ By: _______________________________
Declan French Xxxx Xxxxxxxxxx
Chairman and Chief Executive Officer Managing Director
November 5, 2001 November 5, 2001
Date Executed: _____________________________ Date Executed: ____________________
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EXHIBIT A
ADVISORY SERVICES PROVIDED BY ENTRENET
As a corporate advisor, entrenet will use its best efforts to assist Company in
achieving a successful Transaction. Such Transaction, as defined in paragraph
four (4) of this Agreement, includes without limitation: any capital financing,
debt financing, and/or merger/acquisition transactions.
entrenet will not act as a broker, but will assist in locating brokerage
services if required. entrenet will not participate in general advertising or
solicitation of the Company. Investors brought to the Company will be accredited
investors to the best of entrenet's knowledge.
In addition, entrenet SHALL NOT have authority to do the following:
o Hold any funds or securities in connection with a proposed sale of the
Company's securities;
o Bind or obligate the Company in any respect;
o Make any representations respecting the business or affairs of the
Company to any prospective investor or customer whether in connection
with investment or otherwise and entrenet agrees not to make any such
representations unless previously authorized by the Company in
writing; or
o Make any offers to sell equity, debt, or assets of the Company.
At the Company's request, entrenet may provide services beyond those listed
above; however, the Company shall pay to entrenet a separate consulting rate for
these additional services. The Company and entrenet shall agree on such rates,
in writing, prior to entrenet providing such services.
ENTRENET COMPENSATION.
TRANSACTIONS.
DEBT. Upon the successful completion of a debt Transaction, as defined in
paragraph 4 of this Agreement, initiated at any time prior to the
termination of this Agreement, the fees paid to entrenet shall be one and
one half percent (1.5%)(payable in cash) of gross Consideration as defined
in paragraph 5 of this Agreement.
EQUITY. Upon the successful completion of an equity or convertible debt
Transaction, as defined in paragraph 4 of this Agreement, initiated at any
time prior to the termination of this Agreement, the fees paid to entrenet
shall be four percent (4%) payable in cash of gross Consideration as
defined in paragraph 5 of this Agreement
MERGERS & ACQUISITIONS. Upon the successful completion of a merger,
acquisition or other business combination Transaction, as defined in
paragraph 4 of this Agreement, initiated at any time prior to the
termination of this Agreement, the fees paid to entrenet shall be four
percent (4%), payable in cash, of gross Consideration as defined in
paragraph 5 of this Agreement
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ESCROW.
All Fees, Common Stock Warrants, or other consideration earned in
conjunction a transaction are to be paid through the escrow account at
time of closing of the transaction.
EXPENSE REIMBURSEMENT
PRE-APPROVED EXPENSES.
The Company's prior approval, entrenet shall be entitled to reimbursement
from the Company for reasonable amounts of the following "out-of-pocket"
expenses: travel expenses, airfare, hotel, meals, printing & binding or
other expenses as shall be mutually agreed upon.
TERM
The term of the Agreement shall be twelve (12) months from date of signing. The
Agreement shall automatically renew for successive twelve (12) month terms,
unless either party provides 60 days written notice to the other party prior to
either the termination of the applicable initial term or any renewal terms.
For any sources introduced to the company prior to termination, the above
entrenet compensation schedule will remain in effect for two (2) years following
the termination date of this Agreement.
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