EXHIBIT 10.5
CONSULTING AGREEMENT
This Consulting Agreement (this "Agreement") is made as of June 30, 1999 by
NET VALUE HOLDINGS, INC., a Delaware corporation (the "Company"), and XXXX XXXX,
an individual resident of the State of California (the "Consultant").
RECITALS
Strategicus Partners, Inc. and the Company, expect to enter into a merger
transaction (the "Merger"), in which the Company will be the surviving
corporation. In connection with the Merger, the Company desires to retain the
Consultant, and the Consultant desires to provide services to the Company, upon
the terms and conditions set forth in this Agreement.
AGREEMENT
The parties, intending to be legally bound, hereby agree as follows:
1. DEFINITIONS
For the purposes of this Agreement, the following terms have the meanings
specified or referred to in this Section 1:
"Agreement" means this Consulting Agreement, as amended from time to time.
"Board of Directors" means the board of directors of the Company.
"Effective Date" means the date of the closing of the Merger between the
Company and Strategicus Partners, Inc., in which the Company shall be the
surviving corporation.
"Promissory Note" is defined as the Promissory Note executed and delivered
by the Consultant to the Company on or about June 29, 1999 in the original
principal amount of $267,000.
2. ENGAGEMENT
The Consultant will have such duties as are assigned or delegated to the
Consultant by the Board of Directors, and will initially perform services
equivalent to those performed by an Executive Vice President--Business
Development of the Company and will serve as a member of the Board of Directors.
The Consultant agrees to perform in good faith and to the best of his ability
all services which may be required of him hereunder and will devote his best
efforts and such business time, skill, attention and energies as are reasonably
necessary to perform his duties and responsibilities under this Agreement and to
promote the success of the Company's business.
3. RETAINER
The Consultant will be paid a monthly retainer of $500.00, which will be
payable on the last business day of each month during the term of this
Agreement.
4. EXPENSE REIMBURSEMENT
The Company will reimburse the Consultant for all reasonable expenses
incurred by the Consultant at the request of, or on behalf of, the Company in
the performance of the Consultant's duties pursuant to this Agreement, including
without limitation reasonable expenses incurred by the Consultant in attending
conventions, seminars, other business meetings and for promotional expenses,
provided that any such activities must be related to the Company's business and
all individual expenses (or those aggregated for a single convention, seminar or
other business trip) greater than $2,000 must be approved in advance by the
Board of Directors or the Chief Executive Officer. The Consultant must file
expense reports with respect to such expenses in accordance with the Company's
policies.
5. TERMINATION
5.1 RIGHT TO TERMINATE
The Company and/or Xxxxxx Xxxxx (in his sole discretion) may terminate
the Engagement and all of the Company's obligations under this Agreement at any
time and for any reason.
5.2 RIGHTS UPON TERMINATION
If the engagement is terminated, the Consultant shall have no further
rights against the Company hereunder, except for the right to receive (i) any
unpaid retainer with respect to the period prior to the effective date of
termination, (ii) reimbursement of expenses to which the Consultant is entitled,
and (iii) stock certificates for any shares of the Company's common stock owned
by the Consultant which vested prior to the effective date of termination.
6. NON-DISCLOSURE COVENANT
The Company and the Consultant acknowledge that the services to be
performed by the Consultant under this Agreement are unique and valuable and
that, as a result of the Consultant's engagement, the Consultant will be in a
relationship of confidence and trust with the Company and will come into
possession of "Confidential Information" (i) owned or controlled by the Company
and its subsidiaries and affiliates; (ii) in the possession of the Company and
its subsidiaries and affiliates and belonging to third parties; or (iii)
conceived, originated, discovered or developed, in whole or in part, by the
Consultant. As used herein "Confidential Information" means trade secrets and
other confidential or proprietary business, technical, personnel or financial
information of the Company, whether or not the Consultant's work product, in
written, graphic, oral or other tangible or intangible forms, including but not
limited to specifications, samples, records, data, computer programs, drawings,
diagrams, models, consumer names, ID's or e-mail addresses, business or
marketing plans, studies, analyses, projections and reports, communications by
or to attorneys (including attorney-client privileged communications), memos and
other materials prepared by attorneys or under their direction (including
attorney work product), and software systems and processes that are not readily
available to the public, even such items not specifically marked as a trade
secret or confidential, unless the Company advises the Consultant otherwise in
writing or unless the information has been shared by the Company with entities
not bound by non-disclosure
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agreements. In consideration of the fees to be paid or provided to the
Consultant by the Company under this Agreement, the Consultant agrees not to
directly or indirectly use or disclose to anyone, either during the term of this
Agreement or after the termination of this Agreement, except in the performance
of his duties as described in this Agreement or with the Company's prior written
consent, any Confidential Information of the Company. This non-disclosure
covenant does not apply to information (i) that is disclosed or becomes public
through another source; (ii) which the Consultant is required to disclose
pursuant to court order, subpoena or applicable law (provided that the
Consultant will use reasonable efforts to provide the Company with prompt notice
of any such requests or requirement so that the Company may seek an appropriate
protective order); or (iii) which is disclosed in any proceeding to enforce or
interpret this Agreement. The Consultant agrees that in the event of the
termination this Agreement for any reason, the Consultant will deliver to the
Company, upon request, all property belonging to the Company, including all
documents and materials of any nature pertaining to the Consultant's engagement
with the Company and will not take with him any documents or materials of any
description, or any reproduction thereof of any description, containing or
pertaining to any Confidential Information.
7. NON-COMPETITION
During the term of this Agreement and for a one-year period after
termination of this Agreement for any reason, the Consultant agrees that he
shall not (a) work for or be interested in any business which serves as a
holding company primarily for the purpose of acquiring entities whose products
and services are delivered to consumers over the Internet ("Internet Entities"),
(b) engage or be interested in or receive any compensation from any business in
which the services to be rendered by the Consultant to such business directly
relates to services or products which are directly competitive with "primary"
services or products offered by the Company or a subsidiary or affiliate of the
Company at the effective date of the termination of this Agreement or (c) induce
or attempt to induce any employee, agent or customer of the Company or any of
its subsidiaries or affiliates to terminate or reduce the scope of his, her or
its relationship with the Company. A product or service shall be deemed
"primary" only if such service or product constitutes a primary component of the
core business of the Company or its majority-owned subsidiaries and affiliates
on the effective date of termination of this Agreement. For the purposes of this
Agreement, the term "work for or be interested in" a business means that the
Consultant is a stockholder, director, officer, employee, partner, individual
proprietor, lender or consultant with that business, but not if (i) his interest
is limited solely to the passive ownership of five percent (5%) or less of any
class of the equity or debt securities of a corporation whose shares are listed
for trading on a national securities exchange or traded in the over-the-counter
market, or (ii) he is interested in a company listed on Schedule 7 hereto, or
after termination hereof, works for such company; provided however, that so long
as this non-competition agreement is in effect, the Consultant shall not work
for a company listed on Schedule 7 if such company serves as a holding company
primarily for the purpose of acquiring Internet Entities. In the event that any
part of this Section 7 is adjudged invalid or unenforceable by any court of
record, board of arbitration or judicial or quasi judicial entity having
jurisdiction thereof by reason of length of time, geographical coverage,
activities covered, or for any other reason, then the invalid or unenforceable
provisions of this covenant shall be deemed reformed and amended to
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the maximum extent permissible under applicable law and shall be enforced and
enforceable as so amended in accordance with the intention of the parties as
expressed herein.
8. FORGIVENESS OF LOANS MADE TO CONSULTANT
The Company has made a loan to the Consultant in the principal amount of
$267,000, pursuant to the terms set forth in the Promissory Note. During the
term of this Agreement, the Company agrees that it shall take no action to
demand or collect the amounts due under the Promissory Note and that the
principal balance and accrued interest due under such Promissory Note shall be
forgiven and the Consultant shall be released from any further liability under
the Promissory Note in accordance with the schedule attached hereto as Schedule
8, which is incorporated by this reference and made a part hereof.
9. GENERAL PROVISIONS
9.1 INJUNCTIVE RELIEF AND ADDITIONAL REMEDY
The Consultant acknowledges that the injury that would be suffered by the
Company as a result of a breach of the provisions of any provision of Sections 6
and 7 of this Agreement would be irreparable and that an award of monetary
damages to the Company for such a breach would be an inadequate remedy.
Consequently the Company will have the right, in addition to any other rights it
may have, to obtain injunctive relief to restrain any breach or threatened
breach or otherwise to specifically enforce any provisions of Sections 6 and 7
of this Agreement, and the Company will not be obligated to post bond or other
security in seeking such relief.
9.2 WAIVER
The rights and remedies of the parties to this Agreement are cumulative and
not alternative. Neither the failure nor any delay by either party in exercising
any right, power, or privilege under this Agreement will operate as a waiver of
such right, power, or privilege, and no single or partial exercise of any such
right, power, or privilege will preclude any other or further exercise of such
right, power, or privilege or the exercise of any other right, power, or
privilege.
9.3 NOTICES
All notices, consents, waivers, and other communications under this
Agreement must be in writing and will be deemed to have been duly given when (a)
delivered by hand, (b) sent by facsimile (with written confirmation of receipt),
provided that a copy is mailed by registered mail, return receipt requested, or
(c) when received by the addressee, if sent by a nationally recognized overnight
delivery service (receipt requested), in each case to the appropriate addresses
and facsimile numbers set forth below (or to such other addresses and facsimile
numbers as a party may designate by notice to the other parties):
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If to the Company: netValue Holdings, Inc.
Xxx Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
With a copy to: Klehr, Harrison, Xxxxxx, Xxxxxxxxx & Xxxxxx
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx
Facsimile No.: (000) 000-0000
If to the Consultant: Xxxx Xxxx
000 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Facsimile No.: 000-000-0000
9.4 ENTIRE AGREEMENT; AMENDMENTS
This Agreement and the documents reference herein, contain the entire
agreement between the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings, oral or written, between the
parties hereto with respect to the subject matter hereof. This Agreement may not
be amended orally, but only by an agreement in writing signed by the parties
hereto.
9.5 GOVERNING LAW
This Agreement will be governed by the laws of the State of Delaware
without regard to conflicts of laws principles.
9.6 JURISDICTION
Any action or proceeding seeking to enforce any provision of, or based on
any right arising out of, this Agreement may be brought against either of the
parties in the courts of the State of Delaware, or, if it has or can acquire
jurisdiction, in the United States District Court for the District of Delaware,
and each of the parties consents to the jurisdiction of such courts (and of the
appropriate appellate courts) in any such action or proceeding and waives any
objection to venue laid therein. Process in any action or proceeding referred to
in the preceding sentence may be served on either party anywhere in the world.
9.7 ASSIGNABILITY, BINDING NATURE
This Agreement shall be binding upon and inure to the benefit of the
parties and their respective successors, heirs (in the case of the Consultant)
and assigns. No rights or obligations of
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the Consultant under this Agreement may be assigned or transferred by the
Consultant other than his rights to compensation and benefits, which may be
transferred only by will or operation of law.
9.8 SURVIVAL
The respective rights and obligations of the parties hereunder shall
survive any termination of the Consultant's employment to the extent necessary
to the intended preservation of such rights and obligations.
9.9 PRIOR AGREEMENTS
The Consultant represents and warrants to the Company that there are no
restrictions, agreements or understandings of any kind whatsoever to which the
Executive is a party, or by which he is bound, which would inhibit, prevent or
make unlawful his execution of this Agreement, and his execution and performance
of this Agreement shall not constitute a breach of any contract, agreement or
understanding, whether oral or written, to which he is a party or by which he is
bound.
9.10 ACKNOWLEDGMENT
The Consultant hereby acknowledges and certifies that he has read the terms
of this Agreement, that he has been informed by the Company that he should
discuss it with an attorney of his choice, and that he understands its terms and
effects. The Consultant further acknowledges that based on his training and
experience, he has the capacity to earn a livelihood by performing services as
an employee or otherwise in a business that does not violate the provisions of
Section 7.
9.11 SECTION HEADINGS, CONSTRUCTION
The headings of Sections in this Agreement are provided for convenience
only and will not affect its construction or interpretation. All references to
"Section" or "Sections" refer to the corresponding Section or Sections of this
Agreement unless otherwise specified. All words used in this Agreement will be
construed to be of such gender or number as the circumstances require. Unless
otherwise expressly provided, the word "including" does not limit the preceding
words or terms.
9.12 SEVERABILITY
If any provision of this Agreement is held invalid or unenforceable by any
court of competent jurisdiction, the other provisions of this Agreement will
remain in full force and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and effect to the
extent not held invalid or unenforceable.
9.13 COUNTERPARTS
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This Agreement may be executed in one or more counterparts, each of which
will be deemed to be an original copy of this Agreement and all of which, when
taken together, will be deemed to constitute one and the same agreement. This
Agreement (and all other agreements, documents, instruments and certificates
executed and/or delivered in connection herewith) may be executed by facsimile
signatures, each of which shall be deemed an original copy of this Agreement (or
other such agreement, document, instrument and certificate).
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IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
as of the date above first written above.
NETVALUE HOLDINGS, INC.
/s/ Xxxxxx X. Xxxxx
-------------------------------
By: Xxxxxx X. Xxxxx
Its: President
/s/ Xxxx Xxxxx
-------------------------------
Xxxx Xxxx, Individually
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SCHEDULE 7
CONSULTING AGREEMENT
None.
SCHEDULE 8
CONSULTING AGREEMENT
The principal and interest due under the Promissory Note executed and
delivered by the Consultant shall be forgiven and the Consultant shall be
released from any further liability as follows:
1. One-third (33.3%) of the principal and interest due under the
Promissory Note will be forgiven on the first anniversary of the Effective Date;
2. One-third (33.3%) of the principal and interest due under the
Promissory Note will be forgiven on the second anniversary of the Effective
Date; and
3. One-third (33.3 %) of the principal and interest due under the
Promissory Note will be forgiven on the third anniversary of the Effective Date.
