EXHIBIT 10.1
CAPITAL STOCK PURCHASE AGREEMENT
This Agreement, dated as of October 15, 2002, is by and between Xxxxxxx X.
Xxxxxx and Xxxxxxxxx Xxxxxxxx (collectively, the "Shareholder") and Xxxxx
Xxxxxxxx, Xx. and Xxxxx Xxxxxxxx or their assigns (collectively, the "Buyer").
(The Shareholder and the Buyer may be referred to collectively as the
"Parties").
1. THE ACQUISITION
1.1. SALE OF THE SHARES. At the Closing to be held as provided in Section 2, the
Shareholder shall sell 4,000,000 shares (the "Shares") of common stock of
Sitestar Corporation (the "Company") to Buyer and Buyer shall purchase the
Shares from the Shareholder, free and clear of all Encumbrances other than
restrictions imposed by federal and state securities laws for the sum of
$100,000 (the "Purchase Price").
1.2. PAYMENT OF PURCHASE PRICE. At the Closing, Buyer shall pay the Purchase
Price to Seller in cash, check or by wire transfer to the designated account of
the Shareholder.
2. THE CLOSING.
2.1. PLACE AND TIME. The closing of the sale of the Shares shall take place at
Xxxxxx & Yap, 00000 Xxxx Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxx 00000 no later than 5
P.M. (California time) on or before October 15, 2002 or at such other place,
date and time as the Parties mutually agree (the "Closing").
2.2. DELIVERIES BY THE SHAREHOLDER. At the Closing, the Shareholder shall
deliver the following to Buyer:
a. Certificates representing the Shares, duly endorsed for transfer to Buyer and
accompanied by appropriate stock powers, with all necessary transfer tax and
other revenue stamps, acquired at Shareholder's expense. Shareholder agrees to
cure any deficiencies with respect to the endorsement of the certificates
representing the Shares owned by Shareholder or with respect to the stock power
accompanying such certificates.
b. Resignations as contemplated by Section 3.4.
c. As contemplated by Section 3.5, Shareholder's written request to the landlord
of the premises located in Xxxxxxx Oaks, California (the "Premises") for the
landlord's consent to assumption of the Premises lease by Shareholders. The
landlord's written consent to the assumption of the Premises lease shall be
provided to Buyer as soon as received by Shareholder from Landlord, which date
of receipt may be after the Closing.
d. All other documents, instruments and writings required by this Agreement to
be delivered by the Shareholder at the Closing, all of the Company's original
books of account and record, and any other documents or records relating to the
Company's business reasonably requested by Buyer in connection with this
Agreement.
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2.3. DELIVERIES BY BUYER. At the Closing, Buyer shall deliver the following
to the Shareholder:
a. The Purchase Price as set forth in Section 1.2.
b. All other documents, instruments and writings required by this Agreement to
be delivered by Buyer at the Closing.
3. CONDITIONS TO BUYER'S OBLIGATIONS. The obligations of Buyer to effect the
Closing shall be subject to the satisfaction at or prior to the Closing of the
following conditions, any one or more of which may be waived by the Buyer:
3.1. NO INJUNCTION. There shall not be in effect any injunction, order or decree
of a court of competent jurisdiction that prevents the consummation of the
transactions contemplated by this Agreement, that prohibits Buyer's acquisition
of the Shares or that will require any divestiture as a result of Buyer's
acquisition of the Shares or that will require all or any part of the business
of the Company to be held separate and no litigation or proceedings seeking the
issuance of such an injunction, order or decree or seeking to impose substantial
penalties on the Company or Buyer if this Agreement is consummated shall be
pending.
3.2. REPRESENTATIONS, WARRANTIES AND AGREEMENTS. The representations and
warranties set forth in this Agreement shall be true and complete in all
material respects as of the Closing Date as though made at such time, and the
Shareholder shall have performed and complied in all material respects with the
agreements contained in this Agreement required to be performed and complied by
them at or prior to the Closing.
3.3. REGULATORY APPROVALS. All licenses, authorizations, consents, orders and
regulatory approvals of Governmental Bodies necessary for the consummation of
Buyer's acquisition of the Shares shall have been obtained and shall be in full
force and effect.
3.4. RESIGNATION OF OFFICERS AND DIRECTORS. Effective on the Closing Date, all
officers and directors shall have resigned as officers, directors and employees
of the Company and they shall, subject to compliance with Rule 14f-1 of the
Exchange Act, have appointed the designees of Buyer as officers and directors of
the Company. Buyer understands that such appointment shall require a filing and
distribution of a notice to the Company's shareholders in accordance with Rule
14f-1 of the Exchange Act.
3.5. LEASE. Effective as of the Closing Date, the Shareholder shall assume
responsibility for the Company's Premises lease and all ancillary items related
to that lease. In the event that Seller does not obtain the written consent of
the landlord for the assumption of such lease, Seller agrees to reimburse
Company for all payments made by Company on such lease after the Closing Date.
3.6. AUTHORIZATION. On or before the Closing Date, the Company must have taken
all actions necessary to authorize the transactions contemplated by this
Agreement.
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4. CONDITIONS TO THE SHAREHOLDER'S OBLIGATIONS. The obligations of the
Shareholder to effect the Closing shall be subject to the satisfaction at or
prior to the Closing of the following conditions, any one or more of which may
be waived by the Shareholder:
4.1. NO INJUNCTION. There shall not be in effect any injunction, order or decree
of a court of competent jurisdiction that prevents the consummation of the
transactions contemplated by this Agreement, that prohibits Buyer's acquisition
of the Shares or that will require all or any part of the business of the
Company or Buyer to be held separate and no litigation or proceedings seeking
the issuance of such an injunction, order or decree or seeking to impose
substantial penalties on the Company or Buyer if this Agreement is consummated
shall be pending.
4.2. REPRESENTATION, WARRANTIES AND AGREEMENTS. The representations and
warranties of Buyer set forth in this Agreement shall be true and complete in
all material respects as of the Closing Date as though made at such time, and
Buyer shall have performed and complied in all material respects with the
agreements contained in the Agreement required to be performed and complied with
by it at or prior to Closing.
4.3. REGULATORY APPROVALS. All licenses, authorizations, consents, orders and
regulatory approvals of Governmental Bodies necessary for the consummation of
Buyer's acquisition of the Shares shall have been obtained and shall be in full
force and effect.
4.4. CONSULTING AGREEMENT. On or before the Closing Date, the Company shall
enter into a consulting agreement with Xxxxxxx X. Xxxxxx in substantially the
form set forth in Exhibit 4.4 hereto. Both parties intend for Xxxxxxx X. Xxxxxx
to provide advisory services to the Company on an ongoing basis, in matters
including, but not limited to, investor relations, business development and
various corporate and strategic initiatives.
5. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER. The Shareholder represents
and warrants to Buyer that:
5.1. AUTHORIZATION. The Shareholder is authorized to enter into the transaction
contemplated by this Agreement. This Agreement constitutes a valid and binding
obligation of the Shareholder.
5.2. OWNERSHIP OF SHARES. The delivery of certificates to Buyer provided in
Section 2.2 will result in Buyer's immediate acquisition of record and
beneficial ownership of the Shares, free and clear of all Encumbrances subject
to applicable state and federal securities laws.
5.3. CONSENTS AND APPROVALS OF GOVERNMENTAL AUTHORITIES. Except with respect to
applicable state and federal securities laws, no consent, approval or
authorization of, or declaration, filing or registration with, any Governmental
Body is required to be made or obtained by the Shareholder in connection with
the execution, delivery and performance of this Agreement by the Shareholder or
the consummation of the sale of the Shares to Buyer.
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5.4. CAPITALIZATION. In the Shareholder's capacity as officer and director of
the Company, the Shareholder represents that the authorized capital stock of the
Company consists of 310,000,000 authorized shares of stock, par value $.001, of
which 300,000,000 are common shares and 10,000,000 are preferred shares, of
which 98,624,892 common shares and no preferred shares are presently issued and
outstanding. As of the Closing Date, there will not be outstanding any warrants,
options or other agreements on the part of the Company obligating the Company to
issue any additional shares of Equity Securities or any of its securities of any
kind.
5.5. FINANCIAL STATEMENTS. In the Shareholder's capacity as officer and director
of the Company, the Shareholder represents that the Financial Statements of the
Company on file with the SEC (the "Company's Financial Statements") are accurate
and complete in accordance with generally accepted accounting principles,
consistently applied. Except and to the extent reflected or reserved in the most
recent balance sheet included in the Company's Financial Statements, the Company
has no liability or obligation (whether accrued, to become due, contingent or
otherwise).
5.6. LITIGATION. In the Shareholder's capacity as officer and director of the
Company, the Shareholder represents that there is no action, suit, inquiry,
proceeding or investigation by or before any court or Governmental Body pending
or threatened in writing against or involving the Company which is likely to
have a material adverse effect on the business or financial condition of the
Company. The Company is not subject to any judgment, order or decree that is
likely to have a material adverse effect on the business or financial condition
of the Company.
5.7. SUBSIDIARIES. In the Shareholder's capacity as officer and director of the
Company, the Shareholder represents that the Company has the following
subsidiaries: Xxxxxxxx.xxx, a Virginia corporation; Sitestar Applied
Technologies, a Nevada corporation; Xxxxxxxxx.xxx, a Virginia corporation;
Computers By Design, a Virginia corporation; FRE Enterprises, Inc., a Virginia
corporation, and Advanced Internet Services, Inc., a North Carolina corporation.
5.8. DISCLOSURE. In the Shareholder's capacity as officer and director of the
Company, the Shareholder represents that neither this Agreement, nor any
certificate, exhibit, or other written document or statement, furnished to the
Buyer by the Shareholder in connection with the transactions contemplated by
this Agreement contains or will contain any untrue statement of a material fact
or omits or will omit to state a material fact necessary to be stated in order
to make the statements contained herein or therein not misleading.
5.9. ABSENCE OF CERTAIN CHANGES. In the Shareholder's capacity as officer and
director of the Company, the Shareholder represents that since the date of the
last Company's Financial Statements, the Company has not:
a. suffered the damage or destruction of any of its properties or assets
(whether or not covered by insurance), which is materially adverse to the
business or financial condition of the Company or made any disposition of any of
its properties or assets other than in the ordinary course of business;
b. made any change or amendment in its certificate of incorporation or bylaws,
or other governing instruments;
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c. issued or sold any Equity Securities or other securities, acquired, directly
or indirectly, by redemption or otherwise, any such Equity Securities,
reclassified, split-up or otherwise changed any such Equity Security, or granted
or entered into any options, warrants, calls or commitments of any kind with
respect thereto;
d. organized any new Subsidiary or acquired any Equity Securities of any Person
or any equity or ownership interest in any business;
e. borrowed any funds or incurred, or assumed or become subject to, whether
directly or by way of guarantee or otherwise, any obligation or liability with
respect to any such indebtedness for borrowed money;
f. paid, discharged or satisfied any material claim, liability or obligation
(absolute, accrued, contingent or otherwise), other than in ordinary course of
business;
g. prepaid any material obligation having a maturity of more than 90 days from
the date such obligation was issued or incurred;
h. cancelled any material debts or waived any material claims or rights, except
in the ordinary course of business;
i. disposed or permitted to lapse any rights to the use of any material patent
or registered trademark or copyright or other intellectual property owned or
used by it;
j. granted any general increase in the compensation of officers or employees
(including any such increase pursuant to any employee benefit plan);
k. purchased or entered into any contract or commitment to purchase any material
quantity of raw materials or supplies, or sold or entered any contract or
commitment to sell any material quantity or property of assets, except (i)
normal contracts or commitments for the purchase of, and normal purchases of,
raw materials or supplies, made in the ordinary course of business, (ii) normal
contracts or commitments for the sale of, and normal sale of, inventory in the
ordinary course of business, and (iii) other contracts, commitments, purchases
or sales in the ordinary course of business;
l. made any capital expenditures or additions to property, plant or equipment or
acquired any other property assets (other than raw materials and supplies) at a
cost in excess of $10,000 in aggregate;
m. entered into any collective bargaining or union contract or agreement; or
n. other than the ordinary course of business, incurred any liability required
by generally accepted accounting principles to be reflected on a balance sheet
and material to the business or financial condition of the Company.
5.10. NO MATERIAL ADVERSE CHANGE. In the Shareholder's capacity as officer and
director of the Company, the Shareholder represents that since the Balance Sheet
Date, there has not been any material adverse change in the business or
financial condition of the Company.
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5.11. BROKERS OR FINDERS. The Shareholder has not employed any broker or finder
or incurred any liability for any brokerage or finder's fees or commissions or
similar payments in connection with the sale of the Shares to Buyer.
5.12. SECURITIES MATTERS. The Shares have not been registered under the Act, or
any state Act in reliance on exemptions therefrom.
6. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and warrants to
the Shareholder that:
6.1. AUTHORIZATION. This Agreement constitutes a valid and binding obligation
of Buyer, enforceable against it in accordance with its terms.
6.2. CONSENTS AND APPROVALS OF GOVERNMENTAL AUTHORITIES. No consent, approval
or authorization of, or declaration, filing or registration with, any
Governmental Body is required to be made or obtained by Buyer in connection with
the execution, delivery and performance of this Agreement by Buyer or the
consummation of the sale of the Shares to Buyer.
6.3. OTHER CONSENTS. No consent of any Person is required to be obtained by
Buyer to the execution, delivery and performance of this Agreement or the
consummation of the sale of the Shares to Buyer.
6.4. BROKERS OR FINDERS. Buyer has not employed any broker or finder or incurred
any liability for any brokerage or finder's fees or commissions or similar
payments in connection with the sale of the Shares to Buyer.
6.5. SECURITIES MATTERS. The Buyer hereby represents, warrants and covenants to
the Shareholder, as follows:
a. The Buyer understands that the Shares have not been registered under the Act,
or any state Act in reliance on exemptions therefrom.
b. The Shares are being acquired solely for the Buyer's own account, for
investment and are not being acquired with a view to or for the resale,
distribution, subdivision or fractionalization thereof, the Buyer has no present
plans to enter into any such contract, undertaking, agreement or arrangement and
the Buyer further understands that the Shares, may only be resold pursuant to a
registration statement under the Act, or pursuant to some other available
exemption.
c. The Buyer is an "accredited investor" as that term is defined in Regulation D
of the Act and has sufficient knowledge and experience in financial and business
matters to be capable of evaluating the merits and the risks of its investment
in the Shares and is able to bear the economic risk of its investment in the
Shares.
d. The Buyer acknowledges, in connection with the purchase of the Shares, that
no representation has been made by representatives of the Company regarding its
business, assets or prospects other than that set forth herein and that it is
relying upon the information set forth in the filings made by the Company
pursuant to Section 13 of the Exchange Act and such other representations and
warranties as set forth in this Agreement.
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7. FILINGS WITH GOVERNMENTAL AUTHORITIES. The Shareholder and Buyer shall (a)
file with applicable regulatory authorities any applications and related
documents required to be filed by them in order to consummate the contemplated
transaction and (b) cooperate with each other as they may reasonably request in
connection with the foregoing.
8. INDEMNIFICATION.
8.1. SHAREHOLDER. Shareholder, jointly and severally, shall indemnify, defend
and hold harmless Buyer from and against any and all demands, claims, actions or
causes of action, judgments, assessments, losses, liabilities, damages or
penalties and reasonable attorneys' fees and related disbursements
(collectively, "Claims") incurred by Buyer which arise out of or result from a
misrepresentation, breach of warranty, or breach of any covenant or agreement of
Shareholder contained herein or in the Schedules annexed hereto or in any deed,
exhibit, closing certificate, schedule or any ancillary certificates or other
documents or instruments furnished by Shareholder pursuant hereto or in
connection with the transactions contemplated hereby or thereby, including any
contingent liabilities of the Company occurring prior to the Closing that have
not been previously disclosed in SEC filings.
8.2. BUYER. Buyer, jointly and severally, shall indemnify, defend and hold
harmless Shareholder from and against any and all Claims, as defined at
subsection 8.1 above, incurred by Shareholder which arise out of or result from
a misrepresentation, breach of warranty or breach of any covenant of Buyer
contained herein or in the Schedules annexed hereto or in any deed, exhibit,
closing certificate, schedule or any ancillary certificates or other documents
or instruments furnished by Buyer pursuant hereto or in connection with the
transactions contemplated hereby or thereby.
8.3. METHODS OF ASSERTING CLAIMS FOR INDEMNIFICATION. All claims for
indemnification under this Agreement shall be asserted as follows:
A. THIRD PARTY CLAIMS. In the event that any Claim for which a party (the
"Indemnitee") would be entitled to indemnification under this Agreement is
asserted against or sought to be collected from the Indemnitee by a third party
the Indemnitee shall promptly notify the other party (the "Indemnitor") of such
Claim, specifying the nature thereof, the applicable provision in this Agreement
or other instrument under which the Claim arises, and the amount or the
estimated amount thereof (the "Claim Notice"). The Indemnitor shall have 30 days
(or, if shorter, a period to a date not less than ten days prior to when a
responsive pleading or other document is required to be filed but in no event
less than 10 days from delivery or mailing of the Claim Notice) (the "Notice
Period") to notify the Indemnitee (a) whether or not it disputes the Claim and
(b) if liability hereunder is not disputed, whether or not it desires to defend
the Indemnitee. If the Indemnitor elects to defend by appropriate proceedings,
such proceedings shall be promptly settled or prosecuted to a final conclusion
in such a manner as to avoid any risk of damage to the Indemnitee; and all costs
and expenses of such proceedings and the amount of any judgment shall be paid by
the Indemnitor.
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If the Indemnitee desires to participate in, but not control,
any such defense or settlement, it may do so at its sole cost and expense. If
the Indemnitor has disputed the Claim, as provided above, and shall not defend
such Claim, the Indemnitee shall have the right to control the defense or
settlement of such Claim, in its sole discretion, and shall be reimbursed by the
Indemnitor for its reasonable costs and expenses of such defense. Neither
Indemnitee nor Indemnitor shall be liable for any settlement of any Claim
without the prior written consent of the other party.
B. NON-THIRD PARTY CLAIMS. In the event that the Indemnitee should have a Claim
for indemnification hereunder which does not involve a Claim being asserted
against it or sought to be collected by a third party, the Indemnitee shall
promptly send a Claim Notice with respect to such Claim to the Indemnitor. If
the Indemnitor does not notify the Indemnitee within the Notice Period that it
disputes such Claim, the Indemnitor shall pay the amount thereof to the
Indemnitee. If the Indemnitor disputes the amount of such Claim, the controversy
in question shall be submitted to arbitration.
9. DEFINITIONS. As used in this Agreement, the following terms have the
meanings specified or referred to in this Section 9.
9.1. "ACT" - Securities Act of 1933, as amended.
9.2. "ENCUMBRANCES" - Any security interest, mortgage, lien, charge, adverse
claim or restriction of any kind, including, but not limited to, any restriction
on the use, voting, transfer, receipt of income or other exercise of any
attributes of ownership, other than a restriction on transfer arising under
federal or state securities laws.
9.3. "EQUITY SECURITIES" - Any stock or similar security, certificate of
interest or participation in any profit sharing agreement, reorganization
certificate of subscription, transferable share, voting trust certificate or
certificate of deposit for an equity security, limited partnership interest,
interest in a joint venture, or certificate of interest in a business trust; or
any security convertible, with or without consideration into such a security, or
carrying any warrant or right to subscribe to or purchase such a security; or
any such warrant or right; or any put, call, straddle, or other option or
privilege of buying such a security from or selling such a security to another
without being bound to do so.
9.4. "EXCHANGE ACT" - Securities Exchange Act of 1934, as amended.
9.5. "GOVERNMENTAL BODY" - Any domestic or foreign national, state or municipal
or other local government or multi-national body (including, but not limited to,
the European Economic Community), any subdivision, agency, commission or
authority thereof.
9.6. "PERSON" - Any individual, corporation, partnership, joint venture, trust,
association, unincorporated organization, other entity, or Governmental Body.
9.7. "SEC" - The United States Securities and Exchange Commission.
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9.8. "SUBSIDIARY" - With respect to any Person, any corporation of which
securities having the power to elect a majority of that corporation's Board of
Directors (other than securities having that power only upon the happening of a
contingency that has not occurred) are held by such Person or one or more of its
Subsidiaries.
10. NOTICES.
Any notice, request, instruction, or other document required by the terms of
this Agreement, or deemed by any of the Parties hereto to be desirable, to be
given to any other party hereto shall be in writing and shall be given by
personal delivery, overnight delivery, or mailed by registered or certified
mail, postage prepaid, with return receipt requested, to the addresses of the
Parties as follows:
To "Shareholder": Xxxxxxx X. Xxxxxx
00000 Xxxxxxx Xxxx., Xxxxx 0000
Xxxxxxx Xxxx, Xxxxxxxxxx 00000
Xxxxxxxxx Xxxxxxxx
00000 Xxxxxxx Xxxx., Xxxxx 0000
Xxxxxxx Xxxx, Xxxxxxxxxx 00000
To "Buyer": Xxxxx Xxxxxxxx, Xx. and Xxxxx Xxxxxxxx
With Copy To: Xxxxxx & Yap
00000 Xxxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Fax: (000) 000-0000
Attn: Xxxxx Xxxxxx, Esq.
The persons and addresses set forth above may be changed from time to time by a
notice sent as aforesaid. If notice is given by personal delivery or overnight
delivery in accordance with the provisions of this Section, said notice shall be
conclusively deemed given at the time of such delivery provided a receipt is
obtained from the recipient. If notice is given by mail in accordance with the
provisions of this Section, such notice shall be conclusively deemed given upon
receipt and delivery or refusal.
11. MISCELLANEOUS.
11.1. EXPENSES. Each party shall bear its own expenses incident to the
preparation, negotiation, execution and delivery of this Agreement and the
performance of its obligations hereunder.
11.2. CAPTIONS. The captions in this Agreement are for convenience of reference
only and shall not be given any effect in the interpretation of this Agreement.
11.3. NO WAIVER. The failure of a party to insist upon strict adherence to any
term of this Agreement on any occasion shall not be considered a waiver or
deprive that party of the right thereafter to insist upon strict adherence to
that term of any other term of this Agreement. Any waiver must be in writing.
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11.4. EXCLUSIVE AGREEMENT; AMENDMENT. This Agreement supersedes all prior
agreements among the parties with respect to its subject matter with respect
thereto and cannot be changed or terminated orally.
11.5. COUNTERPARTS. This Agreement may be executed in two or more counterparts,
each of which shall be considered an original, but all of which together shall
constitute the same instrument.
11.6. GOVERNING LAW, VENUE. This Agreement and (unless otherwise provided) all
amendments hereof and waivers and consents hereunder shall be governed by the
internal law of the State of California, without regard to the conflicts of law
principles thereof. Venue for any cause of action brought to enforce any part of
this Agreement shall be in the state or federal court closest to Orange County,
California.
11.7. BINDING EFFECT. This Agreement shall inure to the benefit of and be
binding upon the Parties hereto and their respective successors and assigns.
11.8. PUBLICITY. Except as otherwise required by law, none of the Parties hereto
shall issue any press release or make any other public statement, in each case
relating to, connected with or arising out of this Agreement or the matters
contained herein, without obtaining the prior approval of the other to the
contents and the manner of presentation and publication thereof.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
and entered into as of the date first above written.
SHAREHOLDER
/S/ XXXXXXX X. XXXXXX
---------------------
Xxxxxxx X. Xxxxxx, an individual
/S/ XXXXXXXXX XXXXXXXX
----------------------
Xxxxxxxxx Xxxxxxxx, an individual
BUYER
/S/ XXXXX XXXXXXXX, XX.
-----------------------
Xxxxx Xxxxxxxx, Xx., an individual
/S/ XXXXX XXXXXXXX
-----------------------
Xxxxx Xxxxxxxx, an individual
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EXHIBIT 4.4
CONSULTING AGREEMENT
This Consulting Agreement (this "Agreement") is made and entered into
as of October 15, 2002, by and between Sitestar Corporation, a Nevada
corporation (hereinafter referred to as the "Company") and Xxxxxxx X. Xxxxxx, an
individual (hereinafter referred to as the "Consultant") (collectively, the
"Parties").
RECITALS
WHEREAS, Consultant has certain management consulting experience
pertaining to corporate structure, marketing, strategic alliances, and other
matters relating to the management and growth of companies; and
WHEREAS, the Company wishes to engage the services of the Consultant to
assist the Company in managing its business operations, investor relations and
growth.
NOW, THEREFORE, in consideration of the mutual promises herein
contained, the Parties hereto hereby agree as follows:
1. CONSULTING SERVICES
Attached hereto as Exhibit A and incorporated herein by this reference is
a description of the services to be provided by the Consultant hereunder (the
"Consulting Services"). Consultant hereby agrees to utilize its best efforts in
performing the Consulting Services, however, Consultant makes no warranties,
representations, or guarantees regarding any corporate strategies attempted by
the Company or the eventual effectiveness of the Consulting Services.
2. TERM OF AGREEMENT
This Agreement shall be in full force and effect commencing thirty (30)
days from the date hereof. This Agreement has a term of one (1) year beginning
thirty (30) days from the date hereof. This Agreement shall be renewed
automatically for succeeding terms of one year each unless either party gives
notice to the other at least thirty (30) days prior to the expiration of any
term of their intention not to renew this Agreement. Either party hereto shall
have the right to terminate this Agreement without notice in the event of the
death, bankruptcy, insolvency, or assignment for the benefit of creditors of the
other party. Consultant shall have the right to terminate this Agreement if
Company fails to comply with the terms of this Agreement, including without
limitation its responsibilities for fees as set forth in this Agreement, and
such failure continues unremedied for a period of thirty (30) days after written
notice to the Company by Consultant. The Company shall have the right to
terminate this Agreement upon delivery to Consultant of notice setting forth
with specificity facts comprising a material breach of this Agreement by
Consultant. Consultant shall have 30 days to remedy such breach.
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3. TIME DEVOTED BY CONSULTANT
It is anticipated that the Consultant shall spend a maximum of fifteen
(15) hours per week in order to perform the obligations of Consultant hereunder.
The Company understands that this amount of time may vary and that the
Consultant may perform Consulting Services for other companies.
4. PLACE WHERE SERVICES WILL BE PERFORMED
The Consultant will perform most services in accordance with this
Agreement at Consultant's offices. In addition, the Consultant will perform
services on the telephone and at such other place(s) as necessary to perform
these services in accordance with this Agreement.
5. COMPENSATION TO CONSULTANT
The Consultant's compensation for the Consulting Services shall be as set
forth in Exhibit B attached hereto and incorporated herein by this reference.
6. INDEPENDENT CONTRACTOR
Both Company and the Consultant agree that the Consultant will act as an
independent contractor in the performance of his duties under this Agreement.
Nothing contained in this Agreement shall be construed to imply that Consultant,
or any employee, agent or other authorized representative of Consultant, is a
partner, joint venturer, agent, officer or employee of Company. Consultant
hereby acknowledges that Consultant will be responsible to pay his own income
taxes for any compensation received from the Company and will receive a copy of
the Form 1099 that the Company filed with the IRS reporting that compensation.
7. CONFIDENTIAL INFORMATION
The Consultant and the Company acknowledge that each will have access to
proprietary information regarding the business operations of the other and agree
to keep all such information secret and confidential and not to use or disclose
any such information to any individual or organization without the
non-disclosing Parties prior written consent. It is hereby agreed that from time
to time Consultant and the Company may designate certain disclosed information
as confidential for purposes of this Agreement.
8. INDEMNIFICATION
Each Party (the "Indemnifying Party") agrees to indemnify, defend, and
hold harmless the other Party (the "Indemnified Party") from and against any and
all claims, damages, and liabilities, including any and all expense and costs,
legal or otherwise, caused by the negligent act or omission of the Indemnifying
Party, its subcontractors, agents, or employees, incurred by the Indemnified
Party in the investigation and defense of any claim, demand, or action arising
out of the work performed under this Agreement; including breach of the
Indemnifying Party of this Agreement. The Indemnifying Party shall not be liable
for any claims, damages, or liabilities caused by the sole negligence of the
Indemnified Party, its subcontractors, agents, or employees.
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The Indemnified Party shall notify promptly the Indemnifying Party of
the existence of any claim, demand, or other matter to which the Indemnifying
Party's indemnification obligations would apply, and shall give them a
reasonable opportunity to settle or defend the same at their own expense and
with counsel of their own selection, provided that the Indemnified Party shall
at all times also have the right to fully participate in the defense. If the
Indemnifying Party, within a reasonable time after this notice, fails to take
appropriate steps to settle or defend the claim, demand, or the matter, the
Indemnified Party shall, upon written notice, have the right, but not the
obligation, to undertake such settlement or defense and to compromise or settle
the claim, demand, or other matter on behalf, for the account, and at the risk,
of the Indemnifying Party.
The rights and obligations of the Parties under this section shall be
binding upon and inure to the benefit of any successors, assigns, and heirs of
the Parties.
9. COVENANTS OF CONSULTANT
Consultant covenants and agrees with the Company that, in performing
Consulting Services under this Agreement, Consultant will:
(a) Comply with all federal and state securities and corporate laws;
(b) Not make any representations other than those authorized by the
Company; and
(c) Not publish, circulate or otherwise use any solicitation
materials, investor mailings, or updates other than materials provided by or
otherwise approved by the Company.
10. MISCELLANEOUS
(A) Any controversy arising out of or relating to this Agreement or any
modification or extension thereof, including any claim for damages and/or
rescission shall be settled by arbitration in Los Angeles County, California in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association before a panel of three arbitrators. The arbitrators sitting in any
such controversy shall have no power to alter or modify any express provisions
of this Agreement or to render any award which by its terms effects any such
alteration, or modification subject to 10(G). This Section 10 shall survive the
termination of this Agreement.
(B) If either party to this Agreement brings an action on this Agreement,
the prevailing party shall be entitled to reasonable expenses therefore,
including, but not limited to, attorneys' fees and expenses and court costs.
(C) This Agreement shall inure to the benefit of the Parties hereto,
their administrators and successors in interest. This Agreement shall not be
assignable by either party hereto without the prior written consent of the
other.
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(D) This Agreement contains the entire understanding of the Parties and
supersedes all prior agreements between them.
(E) This Agreement shall be constructed and interpreted in accordance
with and the governed by the laws of the State of California.
(F) No supplement, modification or amendment of this Agreement shall be
binding unless executed in writing by the Parties. No waiver of any of the
provisions of this Agreement shall be deemed, or shall constitute, a waiver of
any other provision, whether or not similar, nor shall any waiver constitute a
continuing waiver. No waiver shall be binding unless executed in writing by the
party making the waiver.
(G) If any provision hereof is held to be illegal, invalid or
unenforceable under present or future laws effective during the term hereof,
such provision shall be fully severable. This Agreement shall be construed and
enforced as if such illegal, invalid or unenforceable provision had never
comprised a part hereof, and the remaining provisions hereof shall remain in
full force and effect and shall not be affected by the illegal, invalid or
unenforceable provision or by its severance herefrom.
IN WITNESS WHEREOF, the Parties hereto have placed their signatures
hereon on the day and year first above written.
SITESTAR CORPORATION, XXXXXXX X. XXXXXX
a Nevada corporation
BY: Xxxxxxx X. Xxxxxx
ITS:
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EXHIBIT A
DESCRIPTION OF CONSULTING SERVICES
Consultant shall perform the following services pursuant to the terms of
this Agreement:
(1) General management consulting services, including but not limited to:
(a) advising and assisting on investor relations;
(b) advising and assisting on business development initiatives;
and
(c) advising on various corporate management initiatives.
(2) Consulting on matters of the board of directors of the Company,
including but not limited to:
(a) assisting the board of directors in developing policies and
procedures; and
(c) assisting the board of directors of the Company in mergers,
acquisitions, and other business combinations.
The above services will be further defined and delineated by the
Company's board of directors from time to time as necessary.
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EXHIBIT B
TERMS OF COMPENSATION
The Consultant's compensation hereunder shall be as follows:
1. MONTHLY ADVISORY FEES. A monthly fee of $3,000 shall be paid to the
Consultant on the fifth day of each month beginning with the effective date of
this Agreement and continuing until this Agreement is terminated as set forth in
paragraph 2 hereinabove.
2. EXPENSES. Consultant shall be reimbursed for all out-of-pocket
expenses upon submission of receipts or accounting to the Company, including,
but not limited to, all travel expenses, research material and charges, computer
charges, long-distance telephone charges, facsimile costs, copy charges,
messenger services, mail expenses and such other Company related charges as may
occur exclusively in relation to the Company's business as substantiated by
documentation. Any expenditure above $100 will require oral or written
pre-approval of the Company.
SITESTAR CORPORATION, XXXXXXX X. XXXXXX
a Nevada corporation
BY: Xxxxxxx X. Xxxxxx
ITS:
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