Exhibit 10.9
STRATEGIC CONSULTING AGREEMENT
THIS STRATEGIC CONSULTING AGREEMENT (this "AGREEMENT") is entered into
as of ________, 2002, by and among MINDARROW SYSTEMS, INC., a Delaware
corporation (the "COMPANY"), and EAST-WEST CAPITAL ASSOCIATES, INC., a
California corporation (the "CONSULTANT"). All capitalized terms not otherwise
defined in this Agreement shall have the meanings set forth in that certain
Securities Purchase Agreement dated ___________ by and among the Company, the
Consultant and the Purchasers (the "SECURITIES PURCHASE AGREEMENT").
WHEREAS:
A. The Company has sold and the Consultant wishes to purchase shares of
Common Stock to a group of accredited investors pursuant to that certain
Securities Purchase Agreement.
B. It is a condition of the Securities Purchase Agreement that the
Company enter into this Agreement with the Consultant.
C. Subject to the terms and conditions of this Agreement, the Company
desires to retain the Consultant to provide certain consulting services to the
Company, and the Consultant desires to provide such services.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, hereby agree
as follows:
1. SERVICES. The Consultant hereby agrees that, during the term of this
Agreement, as set forth in Section 4 of this Agreement, the Consultant
will:
1.1 provide the Company with the names of possible customer, partner
and/or joint venturer (collectively, the "STRATEGIC PARTNERS") and, if requested
by the Company, coordinate and make approaches to such Strategic Partners.
1.2 Revising an executive summary regarding the Company's business
(based on detailed information supplied by the Company to the Consultant) to be
provided to potential strategic Partners.
1.3 Assisting, at no cost to the Consultant and at the request of
the Company, in the negotiation of the principal terms with the potential
Strategic Partners and in the preparation of all contracts, documents, approvals
and related matters necessary to consummate a strategic alliance with a
Strategic Partner.
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1.4 during the first six months of this Agreement, provide the
Company with the services of Xxxx Xxxxxxx for up to ten (10) hours per week to
make possible Strategic Partner introductions; and
2. COVENANT. The Company hereby agrees that, in order to facilitate the
ability of the Consultant to carry out its respective duties under this
Agreement, the Company will cooperate with the Consultant, such cooperation to
include responding in a reasonable manner and in a reasonable amount of time to
all requests by the Consultant or its respective agents to furnish the
Consultant with all documentation, reports, notes and files and to give the
Consultant access to key employees of the Company, to the extent such
information or such key employees are relevant to the duties of the Consultant.
3. GRANT OF WARRANTS. In connection with the services to be provided
hereunder and the execution of the Securities Purchase Agreement, the Company
hereby grants to the Consultant warrants, in the form attached hereto as Exhibit
A (the "CONSULTING WARRANTS"), to purchase an aggregate of 6,000,000 shares of
the Common Stock of the Company. The Consulting Warrants shall be exercisable in
increments of 2,000,000 shares of Common Stock every six months at exercise
prices of $0.75, $1.00, and $1.25 per share, respectively. Notwithstanding the
foregoing, the Consulting Warrants exercisable at $0.75 per share shall only
become exercisable if and when the Company's common Stock trades for 20
consecutive trading days above an average closing price of $1.50. For tax
purposes only, the Company and the Consultant agree that the value of the
Consulting Warrants as of the date hereof is $100.00. Notwithstanding anything
to the contrary contained herein, the Consulting Warrants shall be owned free
and clear of all liens other than the liens created by the Consultant and any
breach of this Agreement shall not affect the Consultant's ownership rights of
the Consulting Warrants.
4. TERM.
4.1 Except as expressly set forth in this Section 4, this Agreement
shall continue in full force and effect until [DECEMBER 31, 2003], unless and
until terminated by mutual consent of the parties.
4.2 The Consultant shall cease to be a party to this Agreement and,
except as set forth in Section 4.3, shall be released of all of their rights and
obligations hereunder and this Agreement shall terminate upon any of the
following events:
(a) the Consultant (or a successor or permitted assign of the
Consultant, as the case may be) ceases to provide services to the Company of the
type described in Section 1 above, as determined in the sole discretion of the
Company's Board of Directors; or
(b) upon election of the Consultant in the event that the
Company materially breaches the terms of this Agreement and fails to cure such
breach within 30 days following written notice thereof.
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4.3 Each of (a) any and all accrued and unpaid obligations of the
Company owed under Section 3 above and (b) the provisions of Section 5.2 and
Sections 6.1 - 6.3 shall survive any termination or expiration of this Agreement
to the maximum extent permitted under applicable law.
5. EXPENSES; INDEMNIFICATION.
5.1 EXPENSES. The Company agrees to pay any actual expenses incurred
by the Consultant in connection with the Consultant's services under this
Agreement, including but not limited to any out-of-pocket expenses incurred by
the Consultant in connection with the Consultant's obligations hereunder, the
provision of services hereunder or the attendance at any meeting of the board of
directors (or any committee thereof) of the Company or any of its affiliates,
but not to exceed either the greater of (i) $10,000 annually or (ii) an amount
determined to be in the best interest of the Company by the Chief Executive
Officer. Notwithstanding the foregoing, if a member or employee of a Consultant
is a member of the board of directors, the Company shall pay only expenses
within the parameters of established Company policy.
5.2 INDEMNITY AND LIABILITY. In consideration of the execution and
delivery of this Agreement by the Consultant, the Company hereby agrees to
indemnify, exonerate and hold the Consultant, and each of its respective
partners, shareholders, affiliates, directors, officers, fiduciaries, employees
and agents and each of the partners, shareholders, affiliates, directors,
officers, fiduciaries, employees and agents of each of the foregoing
(collectively, the "INDEMNITEES") free and harmless from and against any and all
actions, causes of action, suits, losses, liabilities and damages, and expenses
in connection therewith, including without limitation attorneys' fees and
disbursements (collectively, the "INDEMNIFIED LIABILITIES"), incurred by the
Indemnitees or any of them as a result of, or arising out of, or relating to
this Agreement or any services performed under this Agreement, except for any
such Indemnified Liabilities arising on account of such Indemnitee's willful
misconduct and if and to the extent that the foregoing undertaking may be
unenforceable for any reason, the Company hereby agrees to make the maximum
contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law. None of the Indemnitees
shall be liable to the Company or any of its affiliates for any act or omission
suffered or taken by such Indemnitee that does not constitute gross negligence
and/or willful misconduct.
6. MISCELLANEOUS.
6.1 GOVERNING LAW. This Agreement may be governed by and construed
in accordance with the laws of the State of Delaware without regard to
principles of conflicts of law.
6.2 ARBITRATION. Any dispute or claim arising hereunder shall be
settled by arbitration. Any party may commence arbitration by sending a written
notice of arbitration to the other party. The notice will state the dispute with
particularity. The arbitration hearing shall be commenced thirty (30) days
following the date of delivery of notice of arbitration by one party to the
other, by a single neutral arbitrator appointed by the American Arbitration
Association ("AAA").
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The arbitration shall be conducted in Los Angeles, California in accordance with
the commercial arbitration rules promulgated by AAA, and the Consultant, on the
one hand, and the Company, on the other, shall retain the right to cross-examine
the opposing party's witnesses, either through legal counsel, expert witnesses
or both. The decision of the arbitrator shall be final, binding and conclusive
on all parties (without any right of appeal therefrom) and shall not be subject
to judicial review. As part of his decision, the arbitrator may allocate the
cost of arbitration, including fees of attorneys and experts, as he or she deems
fair and equitable in light of all relevant circumstances. Judgment on the award
rendered by the arbitrator may be entered in any court of competent
jurisdiction.
6.3 WAIVER OF JURY TRIAL. TO THE MAXIMUM EXTENT THEY MAY LEGALLY DO
SO, THE PARTIES TO THIS AGREEMENT HEREBY EXPRESSLY WAIVE ANY RIGHT TO TRIAL BY
JURY OF ANY CLAIM, DEMAND, ACTION, CAUSE OF ACTION, OR PROCEEDING ARISING UNDER
OR WITH RESPECT TO THIS AGREEMENT, OR IN ANY WAY CONNECTED WITH, OR RELATED TO,
OR INCIDENTAL TO, THE DEALINGS OF THE PARTIES HERETO WITH RESPECT TO THIS
AGREEMENT, OR THE TRANSACTIONS RELATED HERETO, IN EACH CASE WHETHER NOW EXISTING
OR HEREAFTER ARISING, AND IRRESPECTIVE OF WHETHER SOUNDING IN CONTRACT, TORT, OR
OTHERWISE. TO THE EXTENT THEY MAY LEGALLY DO SO, THE PARTIES TO THIS AGREEMENT
HEREBY AGREE THAT ANY SUCH CLAIM, DEMAND, ACTION, CAUSE OF ACTION, OR PROCEEDING
SHALL BE DECIDED BY A COURT TRIAL WITHOUT A JURY AND THAT ANY PARTY HERETO MAY
FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE OTHER PARTY OR PARTIES HERETO TO WAIVER OF ITS OR
THEIR RIGHT TO TRIAL BY JURY.
6.4 INDEPENDENT CONTRACTOR. The Consultant is an independent
contractor. This Agreement shall not create the relationship of employer and
employee, a partnership, or a joint venture. The Company shall not control or
direct the details and means by which the Consultant performs its business and
services. The Consultant shall determine the number of days and hours of its
work as well as the number of assistants, partners or employees utilized by the
Consultant in its responsibilities under this Agreement. The Consultant shall be
solely responsible for the amount of wages, benefits, work schedules and/or any
other conditions of any of either Consultant's assistants, partners or
employees. Finally, the Consultant is an independent contractor and not an
employee of the Company and agrees to comply with all federal and state tax and
Social Security legislation as applicable to independent contractors. The
Consultant has no authority to bind the company or incur any obligation on
behalf of the Company.
6.5 SUCCESSORS AND ASSIGNS. Nothing in this Agreement, express or
implied, is intended to confer upon any party other than the parties hereto any
rights, remedies, obligations, or liabilities under or by reason of this
Agreement, except as expressly provided in this Agreement. The rights of either
party shall not be assigned or transferred either voluntarily or by operation of
law without the other party's written consent, nor shall the duties of either
party be delegated in whole
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or in part either voluntarily or by operation of law without the other party's
written consent. Any unauthorized assignment, transfer or delegation shall be of
no force or effect.
6.6 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, and signature pages may be delivered by facsimile, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
6.7 HEADINGS. The headings used in this Agreement are for
convenience of reference and shall not form part of, or affect the
interpretation of, this Agreement.
6.8 NOTICES. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon personal delivery to the party to be notified, two days
after deposit with an overnight courier service or five days after deposit with
the United States Post Office, by first class mail, postage prepaid and
addressed to the party to be notified at the address indicated for such party on
the signature page hereof, or at such other address as such party may designate
by ten (10) days' advance written notice to the other parties.
6.9 EXPENSES. If any action at law or equity is necessary to enforce
or interpret the terms of this Agreement, the prevailing party shall be entitled
to reasonable attorneys' fees and costs and necessary disbursements in addition
to any other relief to which such party may be entitled.
6.10 ENTIRE AGREEMENT, AMENDMENTS AND WAIVERS. This Agreement and
the documents referred to herein constitute the full and entire understanding
and agreement among the parties with regard to the subjects hereof and thereof.
Any term of this Agreement may be amended and the observance of any term of this
Agreement may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the Company
and the Consultant.
6.11 SEVERABILITY. If any provision of this Agreement shall be
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement or the validity or enforceability of this Agreement
in any other jurisdiction.
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STRATEGIC CONSULTING AGREEMENT
COMPANY SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned, being duly authorized, has
executed this Agreement on behalf of the Company as of the date first above
written.
MINDARROW SYSTEMS, INC.
By:
-----------------------------------
Name: Xxxxxx Xxxxxx
Title: Chief Executive Officer
Address: 0000 Xxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxx Xxxxx, XX 00000
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STRATEGIC CONSULTING AGREEMENT
THE CONSULTANT'S SIGNATURE PAGE
EAST-WEST CAPITAL ASSOCIATES, INC.
By:
-----------------------------------
Name: Xxxx Xxxxxxx
Title: Chairman
Address: 00000 Xxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxx Xxxxxxx, XX 00000
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