CONSULTING AGREEMENT
This Consulting Agreement ("Agreement"), effective as of the 24th day of
August 2004 ("Effective Date") is entered into by and between CONSPIRACY
ENTERTAINMENT HOLDINGS, INC., a Utah corporation (herein referred to as the
"Company") and XXXXX XXXXXXXXX, an individual residing at 0 Xxxxxx Xxxx, Xxxxxx,
XX 00000 (herein referred to as the "Consultant").
RECITALS
WHEREAS, the Company is a publicly-held corporation with its common stock
traded on the NASDAQ OTCBB; and
WHEREAS, Company desires to engage the services of Consultant to represent
the company as an advisory consultant, and to consult with management concerning
related financial and marketing Company matters;
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 engages the Consultant to furnish the
advisory and consulting services specified herein, and the Consultant hereby
accepts such engagement and agrees to provide such services, on the terms and
conditions herein set forth for the period commencing on August 24th, 2004 and
ending on November 31, 2004 (the "Consulting Period").
2. RESPONSIBILITIES 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) During the Consulting Period, the Consultant shall furnish the
Company with advisory and consulting services relating to financial
matters and sales and marketing to be reasonably requested by the
Company. For the purpose of this Agreement, the term "Company" shall
include also any corporation which is a successor in interest to me
Company, whether by reason of merger, consolidation, and/or purchase
or acquisition of substantially all of the Company's assets or
otherwise.
(b) During the Consulting Period, the Consultant shall be available to
furnish such services, at the request of the Company, during normal
business hours.
(c) In performance of these duties, the Consultant shall provide the
Company with the benefits of his best judgment and efforts. It is
understood and acknowledged by the parties that the value of the
Consultant's advice is not measurable in any quantitative manner,
and that the amount of time spent rendering such consulting advice
shall be determined according to the Consultant's reasonable
discretion, except as may be necessary for the Company to achieve
its objectives.
(d) Nothing herein contained shall be construed to limit or restrict the
Consultant in conducting business with respect to himself or others,
or in rendering advice to others, subject to the confidentiality
obligations set forth below.
Consulting Agreement - Page 1 of 5
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
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.
4. REMUNERATION.
4.1 (a) For undertaking this engagement, for previous services rendered, and
for other good and valuable consideration, the Company agrees to issue, or
have issued, to the Consultant a "Commencement Bonus" of $55,250
(hereinafter, the "Cash") plus 500,000 shares of the Company's Common
Stock with piggyback registration rights (hereinafter, the "Shares"). This
Commencement Bonus shall be fully paid and non-assessable and shall be
paid and issued to Consultant within 7 days of execution of this
Agreement.
(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 Company understands and agrees that Consultant has foregone significant
opportunities to accept this engagement and that the Company derives substantial
benefit from the execution of this Agreement and the ability to announce its
relationship with Consultant. The Commencement Bonus, therefore, constitutes
payment for Consultant's agreement to consult to the Company and is a
nonrefundable, non-apportionable, and non-ratable retainer and is not a
prepayment for future services. If the Company decides to terminate this
Agreement prior to November 31, 2004, for any reason whatsoever, it is agreed
and understood that Consultant will not be requested or demanded by the Company
to return any of the Shares or Cash paid to it as Commencement Bonus referred to
in paragraph 4.1(a) hereunder.
4.3 Notwithstanding anything else in this Agreement to the contrary, 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
Commencement Bonus 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.
Consulting Agreement - Page 2 of 5
4.5 Consultant acknowledges that neither the Shares, nor their underlying
shares, have been issued pursuant to this Agreement have not been registered
under the Securities Act of 1933, as amended (the "Securities Act") and
accordingly 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.
4.6 In connection with the acquisition of the Shares, Consultant represents and
warrants to Company, to the best of his knowledge, as follows:
(a) Consultant 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 the Consultant has requested.
(b) Consultant's investment in restricted securities is reasonable in
relation to the Consultant's net worth. Consultant has had experience in
investments in restricted and publicly traded securities, and Consultant
has had experience in investments in speculative securities and other
investments that involve the risk of loss of investment. Consultant
acknowledges that an investment in the Shares is speculative and involves
the risk of loss. Consultant has the requisite knowledge to assess the
relative merits and risks of this investment without the necessity of
relying upon other advisors, and Consultant can afford the risk of loss of
his entire investment in the Shares.
(c) Consultant is acquiring the Shares for the Consultant's own account
for long-term investment and not with a view toward resale or distribution
thereof except in accordance with applicable securities laws.
5. INDEMNIFICATION. 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.
6. 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.
Consulting Agreement - Page 3 of 5
7. 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.
8. 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.
9. 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.
10. 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.
11. NOTICES. All notices, requests, and other communications hereunder shall be
deemed to be duly given if sent by overnight express mail addressed to the other
party at the address as set forth herein below:
TO THE COMPANY:
---------------
Conspiracy Entertainment Holdings, Inc.
000 Xxxxx Xxxxxx Xxxx.
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
TO THE CONSULTANT:
------------------
Xxxxx Xxxxxxxxx
0 Xxxxxx Xxxx
Xxxxxx, XX 00000
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.
12. CHOICE OF LAW, JURISDICTION AND VENUE. This Agreement shall be governed by,
construed and enforced in accordance with the laws of the State of Utah. The
parties agree that Los Angeles, California will be the venue of any dispute and
will have jurisdiction over all parties.
13. 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
Los Angeles, California, 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.
Consulting Agreement - Page 4 of 5
14. 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.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
AGREED TO:
COMPANY:
Conspiracy Entertainment Holdings, Inc.
By: /S/ XXXXX XXXXXX
----------------------------------------------------
Name: Xxxxx Xxxxxx
Title: Chief Financial Officer and Duly Authorized Agent
CONSULTANT:
Xxxxx Xxxxxxxxx
By: /S/ XXXXX XXXXXXXXX
----------------------------------------------------
Name: Xxxxx Xxxxxxxxx
Consulting Agreement - Page 5 of 5
