EXHIBIT 10.12
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT ("Agreement") is entered into as of October 9,
1998 by and between FRAGRANCE EXPRESS, INC., a Nevada corporation, with offices
at 00 Xxxxxxx Xxxxx, Xxxxxxx, XX 00000 (the "Company") and Rothschild Reserve
International, Inc., and or its affiliates, successors or assigns ("Consultant")
WITNESSETH:
WHEREAS Consultant provides corporate growth development consulting
services;
WHEREAS the Company desires to engage the services of Consultant in
accordance with the terms and conditions set forth in this Agreement, and;
WHEREAS in the context of this Agreement, the term "Transaction" shall mean
issuance of stock or any other securities, spin-off or redeployment of assets,
or divisions, restructuring, or other transaction undertaken by the Company or
any person or entity acting together with or for the benefit of the Company. The
term "Value" shall mean the aggregate value of a Transaction, including present
and future cash, royalties, securities, warrants and any other form of payment
or dividend. "Consideration" shall mean all consideration paid to respective
parties, including cash, royalties, securities, warrants and any other form of
payment or dividend.
NOW, THEREFORE, in consideration of the mutual promises and conditions set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
1. Services
Consultant shall provide the following services to the Company:
A. Provide consulting and liaison services to the Company as requested in
connection with the establishment and implementation of a corporate
development growth plan (1) to procure near term and longer term
working capital for operations and expansion (2) to repay certain
debt. Such plans also may encompass other priorities as set forth by
both parties.
B. Provide consulting and liaison services to the Company in connection
with the implementation and completion of its corporate development
plan (including subsidiaries and affiliates), it being understood that
such services should not be construed as engaging in broker dealer
activities;
C. Review the present capital structure of the Company (including
subsidiaries and affiliates), its stock trading patterns, market
making activities, and external investment community information;
advise and coordinate the development and implementation of a plan to
maximize shareholder values; and work in conjunction with management
and legal counsel.
D. Assist, when requested by the Company, and monitor the Company's
investor relations activities which may include assistance in the
review and creation of corporate communications, press releases, and
presentations.
E. Review, comment and advise on all development and financial proposals
the Company receives during the term of this agreement when requested
by the Company.
F. Board participation if requested by the Company.
2. Compensation
If the Company is successful in raising short and/or long term capital
through the activities of Consultant, in consideration of the services
provided by Consultant under this Agreement, the Company agrees to pay the
following:
A. An initial flat fee payment of 250,000 Free-Trading shares (pre-split)
upon execution of this Agreement.
B. If the Company is successful in structuring its overall program and
objectives outlined in Paragraph 1 and such success is demonstrated by
the value of the common stock of the Company in the trading market,
the Company agrees to the following incentive compensation:
1. If the common stock of the Company trades at a closing bid price of
$1 (pre-split) on or by the close of trading on October 21, 1998, a
total of 62,500 (post-split) shares (50% Free-Trading shares / 50%
Rule 144 shares) to be paid to Consultant.
2. If the Common Stock of the Company trades at a closing bid price of
$4 (post-split) ($1 pre-split) for a period of twenty (20) days from
and after October 19,1998 (defined as a $4 closing bid price for a
minimum of 15 out of 20 trading days), a total of 62,500 post-split
shares (Free-Trading / 50% Rule 144) shall be paid to Consultant.
3. If the Common Stock of the Company trades at a closing bid price of
$5 (post-split) ($1.25 pre-split) for a period of twenty (20) days
from and after November 16,1998 (defined as a $4 closing bid price for
a minimum of 15 out of 20 trading days), a total of 62,500 post-split
shares (Free-Trading / 50% Rule 144) shall be paid to Consultant.
4. If the Common Stock of the Company trades at a closing bid price of
$5 (post-split) for a period of twelve (12) months after (2) and (3)
above, (defined as a $5 closing bid price for a minimum of 75% of the
trading days and within 80% of $5 during such time period), a total of
62,500 post-split shares (50% Free-Trading / 50% Rule 144) shall be
paid to Consultant.
C. If Consultant is successful in structuring a program under which the
Company raises money to meet the Company's cash needs in the
form of convertible debt, debt with warrants or similar incentive,
preferred stock or other equity participation and the Company is not
required to pay any fees to third parties, the Company agrees to the
following incentive compensation:
1. Payment equal to five percent (5%) of the Transaction Value
received by the Company; and
2. A bonus equivalent to one and one half percent (1.5%) of the
Transaction Value received by the Company payable in the form of a 3
year option to purchase Rule 144 Common Stock of the Company to be
issued at Market Price. (Example - $100,000 is raised, 1.5% equals
$1,500, Market Price at time of execution is $5/share, bonus equals
300 Rule 144 shares).
3. Expenses
The Company agrees to reimburse Consultant and its affiliates, for all
reasonable out-of-pocket expenses and costs incurred in connection with the
performance of its services under this Agreement including but not limited
to travel expenses, courier costs, postage, long distance telephone calls
and outside consultants, however all such expenses incurred shall be first
pre-approved in writing by the President of the Company. 4. Indemnification
The parties agree to execute an indemnity agreement, acceptable to both
parties which shall survive any termination of this Agreement. The Company
and Consultant each represent that they have the authority to enter into
this Agreement, and have obtained all necessary consents. Both further
represent that there are no existing agreements that would prohibit or
prevent the terms of the Agreement from being implemented.
5. Term
This Agreement may be terminated with cause by either party during the term
of the Incentive Program set forth in Paragraph 2 herein and may be
terminated without cause on by either party with 30 days written notice.
6. Governing Law
This Agreement shall be governed by and construed in accordance with the
laws of the State of Florida with jurisdiction and venue vested in the
County of Palm Beach.
7. Miscellaneous
This Agreement constitutes the entire agreement between us, and may not be
amended or modified except in writing signed by both parties hereto. If any
provision of this Agreement shall be held or made invalid by a statute,
rule, or otherwise, the remainder of this Agreement shall not be affected
thereby and, to this extent, the provisions of this Agreement shall be
deemed to be severable. This Agreement and the schedule hereto
have been drafted jointly by the parties and, in the event of any
ambiguities in the language hereof, there shall be no inference drawn in
favor of or against either party. The parties agree to submit any dispute
or claim and all counterclaims and cross claims arising from the
interpretation, performance, breach or any other aspect of this Agreement
or any of its terms or provisions to final binding arbitrations by a panel
of three arbitrators selected in accordance with the rules of the American
Arbitration Association in West Palm Beach, Florida in accordance with the
Commercial Arbitration Rules of the American Arbitration Association and
the Code of Civil Procedure; the arbitrator's decision shall be final and
conclusive and confirmed by way of court judgement. The prevailing party
shall be entitled to recover from the other party the cost of the
arbitration, including reasonable attorney's fees. Either party may
initiate an arbitration as provided in the Commercial Arbitration Rules and
the Code of Civil Procedure.
IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto
as of the date first written above.
ROTHSCHILD RESERVE FRAGRANCE EXPRESS, INC.,
INTERNATIONAL, INC., a Nevada Corporation
a Florida Corporation
BY:/s/ Xxxxxx X. Xxxxxxxxxx BY:/s/ Xxxxxx Xxxxx
-------------------------------- ----------------------
Xxxxxx X. Xxxxxxxxxx, President Xxx Xxxxx, President
