NATIONAL FINANCIAL COMMUNICATIONS
CORP. CONSULTING AGREEMENT
AGREEMENT made as of the 6th day of January, 2000 by and between KidsStuff
Catalog Co., maintaining its principal offices at 0000 Xxxxxxx Xxx XX, Xxxxx
Xxxxxx, XX 00000 (hereinafter referred to as "Client") and National Financial
Communications Corp. DBA/ OTC Financial Network, commonwealth of Massachusetts
corporation maintaining its principal offices at 0000 Xxxxx Xxxxx Xxx, Xxxxxxx,
XX 00000 (hereinafter referred to as the "Company").
W I T N E S S ET H : W I T N E S S ET H : WHEREAS, Company is engaged in
the business of providing and rendering public relations and communications
services and has knowledge, expertise and personnel to render the requisite
services to Client; and
WHEREAS, Client is desirous of retaining Company for the purpose of
obtaining public relations and corporate communications services so as to
better, more fully and more effectively deal and communicate with its
shareholders and the investment banking community.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, it is agreed as follows:
I. Engagement of Company. Client herewith engages Company and Company
agrees to render to Client public relations, communications, advisory and
consulting services.
A. The consulting services to be provided by the Company shall
include, but are not limited to, the development, implementation and
maintenance of an ongoing program to increase the investment community's
awareness of Client's activities and to stimulate the investment
community's interest in Client. Client acknowledges that Company's ability
to relate information regarding Client's activities is directly related to
the information provided by Client to the Company.
B. Client acknowledges that Company will devote such time as is
reasonably necessary to perform the services for Client, having due regard
for Company's commitments and obligations to other businesses for which it
performs consulting services.
II. Compensation and Expense Reimbursement.
A. Client will pay the Company, as compensation for the services
provided for in this Agreement and as reimbursement for expenses incurred
by Company on Client's behalf, in the manner set forth in Schedule A
annexed to this Agreement which Schedule is incorporated herein by
reference.
B. In addition to the compensation and expense reimbursement referred
to in Section 2(A) above, Company shall be entitled to receive from Client
a "Transaction Fee", as a result of any Transaction (as described below)
between Client and any other company, entity, person, group or persons or
other party which is introduced to, or put in contact with, Client by
Company. A "Transaction" shall mean merger, sale of stock, sale of assets,
consolidation or other similar transaction or series or combination of
transactions whereby Client or such other party transfer to the other, or
both transfer to a third entity or person, stock, assets, or any interest
in its business in exchange for stock, assets, securities, cash or other
valuable property or rights, or wherein they make a contribution of capital
or services to a joint venture, commonly owned enterprise or business
opportunity with the other for purposes of future business operations and
opportunities. To be a Transaction covered by this section, the transaction
must occur during the term of this Agreement or the one-year period
following the expiration of this Agreement and the Company must have a
written agreement signed by the Client acknowledging that the transaction
was introduced to Client by the Company.
The calculation of a Transaction Fee shall be based upon the total
value of the consideration, securities, property, business, assets or other
value given, paid, transferred or contributed by, or to, the Client and
shall equal 5% of the dollar value of the Transaction. The Transaction Fee
payable to the Company at closing will be in the same form of consideration
as that paid by or to the Client, as the case may be, in any such
Transaction.
Term and Termination. This Agreement shall be for a period of three
months commencing January 6, 2000 and terminating April 5, 2000. If the
Client does not cancel the contract during the term, the contract will be
automatically extended for an additional year. Either party hereto shall
have the right to terminate this Agreement upon 30 days prior written
notice to the other party after the first 90 days.
Treatment of Confidential Information. Company shall not disclose,
without the consent of Client, any financial and business information
concerning the business, affairs, plans and programs of Client which are
delivered by Client to Company in connection with Company's services
hereunder, provided such information is plainly and prominently marked in
writing by Client as being confidential (the "Confidential Information").
The Company will not be bound by the foregoing limitation in the event (i)
the Confidential Information is otherwise disseminated and becomes public
information or (ii) the Company is required to disclose the Confidential
Informational pursuant to a subpoena or other judicial order.
Representation by Company of other clients. Client acknowledges and
consents to Company rendering public relations, consulting and/or
communications services to other clients of the Company engaged in the same
or similar business as that of Client.
Indemnification by Client as to Information Provided to Company.
Client acknowledges that Company, in the performance of its duties, will be
required to rely upon the accuracy and completeness of information supplied
to it by Client's officers, directors, agents and/or employees. Client
agrees to indemnify, hold harmless and defend Company, its officers, agents
and/or employees from any proceeding or suit which arises out of or is due
to the inaccuracy or incompleteness of any material or information supplied
by Client to Company.
Indemnification by Company as to Activity of Company. Company agrees
that it will indemnify and hold the client, its officers, agent, and
employees harmless from and against any claims which arise out of the
activities of the Company including but not limited to any statements or
representations made by Company which conflicts or is contrary to
information provided to Company by client or otherwise relates to
activities of the Company.
Independent Contractor. It is expressly agreed that Company is acting
as an independent contractor in performing its services hereunder. Client
shall carry no workers compensation insurance or any health or accident
insurance on Company or consultant's employees. Client shall not pay any
contributions to social security, unemployment insurance, Federal or state
withholding taxes nor provide any other contributions or benefits, which
might be customary in an employer-employee relationship.
Non-Assignment. This Agreement shall not be assigned by either party
without the written consent of the other party.
Notices. Any notice to be given by either party to the other hereunder
shall be sufficient if in writing and sent by registered or certified mail,
return receipt requested, addressed to such party at the address specified
on the first page of this Agreement or such other address as either party
may have given to the other in writing.
Entire Agreement. The within agreement contains the entire agreement
and understanding between the parties and supersedes all prior
negotiations, agreements and discussions concerning the subject matter
hereof.
Modification and Waiver. This Agreement may not be altered or modified
except by writing signed by each of the respective parties hereof. No
breach or violation of this Agreement shall be waived except in writing
executed by the party granting such waiver.
Law to Govern; Forum for Disputes. The Company and the Client agree
that any legal disputes that may occur between the Company and the Client,
and that arise out of, or are related in any way to, the Company contract
with the Client and/or its performance of services under the Contract or
the termination of this contract, and which disputes cannot be resolved
informally, shall be resolved exclusively through final and binding private
arbitration before an arbitrator mutually selected by the Company and the
Client with each party to bear its own costs and attorney fees. If the
Company and the Client are unable to agree upon an arbitrator within
twenty-one (21) days after either party made a demand for arbitration, the
matter will be submitted for arbitration to the Boston office of the
American Arbitration Association pursuant to the rules governing contract
dispute resolution in effect as of December 1, 1998. Notwithstanding the
foregoing, in no event shall a demand for arbitration be made after the
date when institution of legal or equitable proceedings based on such
claim, dispute, or other matter in question would be barred by the
applicable statutes of limitation.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the day and year first written above.
National Financial Communications Corp.
By: /s/ Xxxxxxxx Xxxxx
Xxxxxxxx Xxxxx, President
Kids Stuff Catalog Co.
By: /s/ Xxxx Xxxxxx
Xxxx Xxxxxx, Authorized Agent
SCHEDULE A-1 Payment for services and reimbursement of expenses.
SCHEDULE A-2 Grant of options in advance of services rendered and
reimbursement of expenses
SCHEDULE A-1
PAYMENT FOR SERVICES
AND REIMBURSEMENT OF EXPENSES
A. For the services to be rendered and performed by Company
during the term of the Agreement, Client shall pay to Company the sum of
$7,000per month payable on the first day of each month.
B. Client shall also reimburse Company for all reasonable and
necessary out-of-pocket expenses incurred in the performance of its duties for
Client upon presentation of statements setting forth in reasonable detail the
amount of such expenses. Company shall not incur any expense for any single item
in excess of $250 either verbally or written except upon the prior approval of
the Client. Company agrees that any travel, entertainment or other expense which
it may incur and which may be referable to more than one of its clients
(including Client) will be prorated among the clients for whom such expense has
been incurred.
National Financial Communications Corp.
By: /s/ Xxxxxxxx Xxxxx
Xxxxxxxx Xxxxx, President
Kids Stuff Catalog Co.
By: /s/ Xxxx Xxxxxx
Xxxx Xxxxxx, Authorized Agent
SCHEDULE A-2
GRANT OF OPTIONS TO NATIONAL FINANCIAL COMMUNICATIONS CORP. IN ADVANCE
OFSERVICES RENDERED
X. Xxxxx of Options and Option Exercise Price. As compensation for the
services to be rendered by Company hereunder, Client herewith issues and
grants to Company stock options (the "Options") to purchase an aggregate of
270,000 shares of Client's Common Stock at an exercise price of $.54 per
share. In the event this agreement is terminated by Client on or before
April 6, 2000, then 135,000 of the aforementioned options are cancelled.
The Options are exercisable upon and subject to the terms and conditions
contained herein. The Options are exercisable during the period commencing
on the date hereof and ending three years subsequent to the termination
date of this Agreement. The Client will use its best efforts to register
the underlying shares for resale under SEC regulations and requirements.
B. Manner of Exercise. Exercise of any of the Options by Company shall
be by written notice to Client accompanied by Company's certified or bank
check for the purchase price of the shares being purchased. Upon receipt of
such notice and payment, Client shall promptly cause to be issued, without
transfer or issue tax to the option holder or other person entitled to
exercise the option, the number of shares for which the Option has been
exercised, registered in the name of Company. Such shares, when issued,
shall be fully paid and non-assessable.
C. Option Shares. Company acknowledges that any shares which it may
acquire from Client pursuant to the exercise of the Options provided for
herein will not have been registered pursuant to the Securities Act of1933,
as amended (the "Securities Act"), and therefore may not be sold or
transferred by Company except in the event that such shares are the subject
of a registration statement or any future sale or transfer is, in the
opinion of counsel for Client, exempt from such registration provisions.
Company acknowledges that any shares which it may acquire pursuant to the
exercise of the Options will be for its own account and for investment
purposes only and not with a view to the resale or redistribution of same.
Company further consents that the following legend be placed upon all
certificates for shares of Common Stock, which may be issued to Company
upon the exercise of the Options:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDERTHE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") AND MAY NOT
BE SOLD OROTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENTUNDER THE ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION
THATSUCH REGISTRATION IS NOT REQUIRED."
Company further consents that no stop transfer instructions being
placed against all certificates may not be issued to it upon the exercise of the
Options.
(i) If the Client executes a Registration during the term of the
contract, then the Company's shares will be added to this Registration at
no cost to the Company. The Client shall bear all costs and expenses
attributable to such registration, excluding fees and expenses of Company's
counsel and any underwriting or selling commission. Client shall maintain
the effectiveness of such registration throughout the term of this
Agreement and for a 120-day period thereafter.
(ii) Notwithstanding the foregoing, if the Shares issuable upon
exercise of the Options are not otherwise registered under the Securities
Act and the Client shall at any time after the date hereof propose to file
a registration statement under the Securities Act, which registration
statement shall include shares of Common Stock of Client or any selling
shareholder, Client shall give written notice to Company of such proposed
registration and will permit Company to include in such registration all
Shares which it has acquired as of the date of such notice. The Client
shall bear all costs and expenses attributable to such registration,
excluding fees and expenses of Company's counsel and any underwriting or
selling commission.
D. Adjustments in Option Shares.
(i) In the event that Client shall at any time sub-divide its
outstanding shares of Common Stock into a greater number of shares, the
Option purchase price in effect prior to such sub-division shall be
proportionately reduced and the number of shares of Common Stock
purchasable shall be proportionately increased. In case the outstanding
shares of Common Stock of Client shall be combined into a smaller number of
shares, the Option purchase price in effect immediately prior to such
combination shall be proportionately increased and the number of shares of
Common Stock purchasable shall be proportionately reduced.
(ii) In case of any reclassification or change of outstanding shares
of Common Stock issuable upon exercise of this Option (other than change in
par value, or from par value to no par value, or from no par value to par
value, or as a result or a subdivision or combination), or incase of any
consolidation or merger of the Client with or into another corporation
(other than a merger in which the Client is the continuing corporation and
which does not result in any reclassification or change of outstanding
shares of Common Stock, other than a change in number of the shares
issuable upon exercise of the Option) or in case of any sale or conveyance
to another corporation of the property of the Client as an entirety or
substantially as an entirety, the Holder of this Option shall have the
right thereafter to exercise this Option into the kind and amount of shares
of stock and other securities and property receivable upon such
reclassification, change, consolidation, merger, sale or conveyance by a
holder of the number of shares of Common Stock of the Client for which the
Option might have been exercised immediately prior to such
reclassification, change, consolidation, merger, sale or conveyance. The
above provisions shall similarly apply to successive reclassifications and
changes of shares of Common Stock and to successive consolidations,
mergers, sales or conveyances.
(iii) The Company reserves the right to assign these options to a
third party at its own discretion.
National Financial Communications Corp.
By: /s/ Xxxxxxxx Xxxxx
Xxxxxxxx Xxxxx, President
Kids Stuff Catalog Co.
By: /s/ Xxxx Xxxxxx
Xxxx Xxxxxx, Authorized Agent
