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EXHIBIT 10.1
CONSULTING AGREEMENT
This Consulting Agreement ("Agreement") is made effective this 22nd day
of October, 1996, between Xxxxxxx Marches, with offices at 000 Xxxxxx Xxxxx,
Xxx-Xxx, Xxxxxxxxxx 00000 ("Consultant") and The Tracker Corporation of America,
with its principal place of business at 000 Xxxxxx Xxxxxx Xxxx, Xxxxx 0000,
Xxxxxxx, Xxxxxxx, Xxxxxx X0X 0X0 ("Client").
RECITALS
WHEREAS, Client desires to retain Consultant to provide advice and to consult
with Client's management concerning its growth strategy, its financial public
relations communication obligation, and provide advice on future capital
structure.
WHEREAS, Client desires to retain Consultant to perform these services for the
period as specified below.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and adequacy of which is expressly acknowledged, Client and Consultant
agree as follows:
1. ENGAGEMENT OF CONSULTANT
Client hereby retains Consultant in the following areas:
A. To assist in enhancing Client's financial public relations
communication;
B. To provide advice and expertise to further Clients growth;
C. To provide advice and expertise to Client regarding future
capital structure including introduction to potential merger and
acquisition candidates and strategic partners.
D. To assist Client in attaining a SmallCap Nasdaq listing
All of the foregoing services collectively are referred to herein as
the "Consulting Services." Consultant accepts Client's engagement and
agrees to perform the consulting service set forth in this section 1.
Consultant acknowledges receipt of Amendment Four to Client's
Registration Statement filed October 18, 1996 (SEC File No. 33-99686)
(the "Registration Statement").
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2. COMPENSATION
(a) Client shall pay Consultant one hundred thousand (100,000) shares
of Client's Common Stock; and
(b) Client shall pay Consultant by allowing Consultant to purchase
options to buy Client's Common Stock. The right to buy said options shall be
deemed as the consideration for which Consultant shall perform the Consulting
Services. Consultant is fully aware and understands that the value of
Consultant's compensation as defined by the Agreement is variable and may be
altered by natural market forces of Client's stock and that such an agreement is
acceptable to Consultant. Consultant shall have the following options available
to him:
Consultant shall be accorded the indivisible sequential options to
purchase a total of Nine Hundred Thousand (900,000) shares of the Common Stock
of the Client for the price of the par value of the stock ($0.001) per share
payable in cash upon exercise by wire transfer of funds when the Closing Quoted
Bid Price and the Specified Minimum Number of Business Days at the Bid are met
as follows:
No. of Days from date
Number of Common Shares Closing Quoted Bid of signing of
Available to purchase Price ("Bid") of Specified Minimum Agreement before
at par value ($.001) Client's Common No. of Business Option Expires
Option per share Stock Days at Bid ("Expiration Period")
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1 100,000 $0.50 5 days 120 days
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2 100,000 $0.75 5 days 120 days
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3 100,000 $1.00 5 days 120 days
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4 100,000 $1.50 5 days 1 year
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5 100,000 $1.75 5 days 1 year
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6 100,000 $2.00 5 days 1 year
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7 100,000 $2.25 5 days 1 year
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8 100,000 $2.50 5 days 1 year
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9 100,000 $2.75 5 days 1 year
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Options must be exercised in sequential order (i.e. option 1 before option 2,
option 2 before option 3, etc.) otherwise subsequent options expire. Each option
shall expire if not exercised within the Expiration Period specified above.
Consultant shall not be allowed to exercise any fractional amount of option.
Upon notice of impending delivery of the certified funds to exercise Options on
any or all of the seven indivisible options, Client shall cause to be issued
shares in amounts commensurate with the number of shares so exercised and shall
simultaneously exchange stock for certified funds at Client's office.
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(c) The Client shall use its best efforts to register all Common Stock
and Options payable to Consultant under this Agreement pursuant to a Regulation
S-8 filing with the Securities and Exchange Commission, on a timely basis.
3. TERM OF AGREEMENT, EXTENSIONS AND RENEWALS.
This Consulting Agreement and Consultant's obligation to continue
providing Consulting Services, as defined herein, shall remain in full force and
effect for one (1) year from the date of signing this Agreement. Client shall
retain the exclusive right to determine in its judgment whether any extension or
renewal shall be granted to Consultant.
4. TERMINATION OF AGREEMENT BY THE CLIENT.
Despite anything to the contrary contained in this Agreement hereunder,
Client may terminate this Agreement and Consultant's consulting arrangement if
any of the following events occur.
(a) Client can terminate this Agreement any time subsequent to ninety
(90) days from date of this Agreement, for any reason, upon fifteen
(15) days written notice to Consultant. However, once the Bid price of
Client's Common Stock is two dollars ($2.00) or above for five (5)
business days then this Agreement cannot be terminated except for cause
as noted in 4(b)
(b) Client can terminate this Agreement if in the judgment of a third
party, disinterested and duly appointed Mediator, Consultant's actions
or conduct would make it unreasonable to require Client to retain
Consultant. Said Mediator shall have been elected by mutual agreement
of both Client and Consultant. such acts include, but are not limited
to, dishonesty, illegal activities, activities harmful to the
reputation of the Client, and/or activities which create civil or
criminal liability for the Client.
5. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION.
In consideration for the Client entering into this Agreement,
Consultant agrees that the following items used in the Client's business are
secret, confidential, unique, and valuable, were developed by Client at great
cost and over a long period of time, and disclosure of any of the items to
anyone other than Client's officers, agents, or authorized employees will cause
Client irreparable injury.
A. Non public financial information, accounting information, plans of
operation, possible mergers or acquisitions prior to the public
announcement;
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B. Customer lists, call lists, and other confidential customer data;
C. Memoranda, notes, records concerning the technical processes conducted
by Client:
D. Sketches, plans, drawings and other confidential research and
development data.
Neither party shall disclose or otherwise reveal to any third party
without the express written consent of the other party the specific terms or
existence of this Agreement, except where required by law.
6. DUE DILIGENCE
Client shall supply and deliver to Consultant information relating to
its business, as may be reasonably requested by Consultant, to enable Consultant
to make such investigation of Client and its business prospects. Client shall
also make available to Consultant names, addresses, and telephone numbers as
Consultant may need to verify or substantiate any such information provided.
7. BEST EFFORTS BASIS.
Consultant agrees that he will at all times faithfully and to the best
of his experience, ability and talents, perform all the duties that may be
required of and from Consultant pursuant to the terms of this Agreement.
Consultant does not guarantee that his efforts will have any impact on Client's
business or that any subsequent financial improvement will result from
Consultant's efforts.
8. CLIENT'S RIGHT TO APPROVE CONSULTANT'S ACTIONS.
Client expressly retains the right to approve, in its sole discretion,
each and every transaction entered into by Consultant that involves Client as a
party. Consultant and Client mutually agree that Consultant is not authorized to
enter into agreements on behalf of Client.
9. EXPENSE.
Client shall pay Consultant $10,000 per month payable in the Common
Stock of the Client for administrative expenses on the fifth business day of the
month succeeding the performance of Consultant's services.. The amount of shares
of Common Stock shall equal $10,000 divided by the average five (5) day Bid
price immediately preceding the 15th day of each month for the term of this
Agreement. Client shall reimburse Consultant for all other pre-approved
expenses.
10. REPRESENTATIONS AND WARRANTIES OF CONSULTANT.
Consultant hereby represents and warrants to Client that:
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A. Prior Experience. Consultant has extensive experience in the areas
of the services he is to perform hereunder and has performed the
services contemplated by this Agreement.
B. Information. No representation or warranty contained herein nor a
statement in any document, certificate or schedule furnished or to be
furnished pursuant to this Agreement by Consultant, or in connection
with the transaction contemplated hereby, contains or contained any
untrue statement of material fact.
C. Prior Consent to Marketing Publications. Consultant agrees to
provide Client with a facsimile copy or original transcript of any
publication, writing, sound recording or any other media type
(collectively referred to herein as "Media") created by Consultant or
any agent or assign of Consultant, where such Media is needed to be
used for marketing of Client or Client's business. Consultant shall
obtain Client's approval on the use of any such Media prior to
disseminating Media to any third parties.
11. CONSULTANT IS NOT AN AGENT OR EMPLOYER.
Consultant's obligations under this Agreement consist solely of the
Consulting Services described herein. In no event shall Consultant be considered
to act as the agent of Client or otherwise represent or bind Client. For
purposes of this Agreement, Consultant is an independent contractor. All final
decisions with respect to acts of Client or its affiliates, whether or not made
pursuant to or in reliance on information or advice furnished by Consultant
hereunder, shall be those of Client or such affiliates and Consultant shall
under no circumstances be liable for any expense incurred or loss suffered by
Client as a consequence of such action or decisions.
12. MISCELLANEOUS
A. Authority
The execution and performance of this Agreement has been duly
authorized by all requisite corporate action. This Agreement constitutes a valid
and binding obligation of the parties hereto.
B. Amendment
This Agreement may be amended or modified at any time and in any manner
but only by an instrument in writing executed by the parties hereto.
C. Waiver
All the rights and remedies of either party under this Agreement are
cumulative and not exclusive of any other rights and remedies provided by law.
No delay or failure on the
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part of either party in the exercise of any right or remedy arising from a
breach of this Agreement shall operate as a waiver of any subsequent right or
remedy arising from a subsequent breach of this Agreement. The consent of any
party where required hereunder to any act or occurrence shall not be deemed to
be a consent to any other act or occurrence.
D. Assignment
Neither party to this Agreement may not assign any right or obligation
created hereunder without the prior written consent of the other;
E. Notices:
Any notice or other communication required or permitted by this
Agreement must be in writing and shall be deemed to be properly given when
delivered in person to an officer of the other party, when deposited in the
United States mails for transmittal be certified or registered mail, postage
prepaid or when deposited with a public telegraph company for transmittal or
when sent by facsimile transmission, charges prepared provided that the
communication is addressed:
(i) In the case of Client to: (ii) In the case of Consultant to:
Xxxx X. Xxxxxxxxx Xxxxxxx Marches
Executive Vice President & CFO M & M Group, Inc.
000 Xxxxxx Xxxxxx Xxxx, Xxxxx 0000 000 Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxx, Xxxxxx Xxx-Xxx, Xxxxxxxxxx, 00000
or to such other person or address designated by the parties to receive notice.
F. Headings and Captions
The headings of paragraphs are included solely for convenience. If a
conflict exists between any heading and the text of this Agreement, the text
shall control.
G. Entire Agreement
This instrument and the exhibits to this instrument contain the entire Agreement
between the parties with respect to the transaction contemplated by the
Agreement. It may be executed in any number of counterparts but the aggregate of
the counterparts together constitute only one and the same instrument.
H. Effect of Partial Invalidity
In the event that any one or more of the provisions contained in this Agreement
shall for any reason be held to be invalid, illegal, or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provisions of this Agreement, but this
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Agreement shall be constructed as if it never contained any such invalid,
illegal or unenforceable provisions.
I. Controlling Law
The validity, interpretation and performance of this Agreement shall be
controlled by and construed under the laws of the State of Arizona.
J. Attorney's Fees.
If any action at law or in equity, including an action for declaratory
relief, is brought to enforce or interpret the provisions of this Agreement, the
prevailing party shall be entitled to recover actual attorney's fees from the
other party. The attorney's fees may be ordered by the court in the trial of any
action described in this paragraph or may be enforced in a separate action
brought for determining attorney's fees.
K. Time is of the Essence.
Time is of the essence for each and every provision hereof this
Agreement and of each and every provision of this Agreement.
L. Mutual Cooperation
The parties hereto shall cooperate with each other to achieve the
purpose of this Agreement and shall execute each other and further documents and
take such other and further actions as may be necessary or convenient to effect
the transactions described herein.
M. Further Actions.
At any time and from time to time, each party agrees, at its or their
expense, to take actions and to execute and deliver documents as may be
reasonably necessary to effectuate the purposes of this Agreement.
N. Indemnification.
(a) The Client shall indemnify and hold harmless the Consultant, from
and against any and all losses, claims, liabilities, expenses and damages, joint
or several (including any and all investigative, legal and other expenses
reasonably incurred in connection with, and any amount paid in settlement of,
any action suit or proceeding or any claim asserted) to which it, or any of them
may become subject under the Act or other Federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims,
liabilities, expenses or damages arise out of or are based on (i) any untrue
statement or alleged untrue statement of any material fact contained in (A) any
preliminary prospectus, the Registration Statement or the Prospectus or any
amendment or supplement or supplement to the Registration Statement or the
Prospectus and (B) any application or
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other document, or any amendment or supplement thereto, executed by the Client
based upon written information furnished by or on behalf of the Client filed in
any jurisdiction in order to qualify the Shares under the securities or Blue Sky
laws thereof or filed with the Commission or any securities association or
securities exchange (each, an "Application") or (ii) the omission or alleged
omission to state in any Preliminary Prospectus, the Registration Statement or
the Prospectus or any supplement to the Registration Statement or the Prospectus
or any Application a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances in which they were
made, not misleading; provided however that such indemnity with respect to any
Preliminary Prospectus shall not inure to the benefit of the Consultant to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or omission of a material fact contained in such
Preliminary Prospectus that was corrected in the Prospectus (or any amendment or
supplement thereto), unless such failure to deliver the Prospectus (as amended
or supplemented) was the result of noncompliance by the Client with its
agreement to deliver such amended Prospectus to the Consultant. This indemnity
agreement will be in addition to any liability which the Client may otherwise
have. The Client will not, without the prior written consent of the Consultant
(which consent will not be unreasonably withheld), settle or compromise or
consent to the entry of any judgment in any pending or threatened claim, action,
suit or proceeding in respect of which indemnification may be sought hereunder
(whether or not the Consultant is a party to each claim, action, suit or
proceeding), unless such settlement, compromise or consent includes an
unconditional release of the Consultant from all liability arising out of such
claim, action, suit or proceeding.
(b) The Consultant shall indemnify and hold harmless the Client, and
its directors, officers, associates, affiliates, employees and agents, and each
person, if any, controlling the Client or any of its affiliates, within the
meaning of Section 15 of the Securities Act of 1933, as amended (the "Act") or
Section 20 of the Exchange Act of 1935, as amended (the "Exchange Act"), from
and against any and all losses, claims, liabilities, expenses and damages, joint
or several (including any and all investigative, legal and other expenses
reasonably incurred in connection with, and any amount paid in settlement of ,
any action, suit or proceeding or any claim asserted) to which it, or any of
them, may become subject under the Act or other Federal or state statutory law
or regulation, at common law or otherwise, insofar as such losses, claims,
liabilities, expenses or damages arise out of or are based on any statement or
alleged statement made by the Consultant which is not based upon information
furnished to the Consultant by the Company.
(c) A party that proposes to assert the right to be indemnified under
this Section will promptly after receipt of notice of commencement of any action
against such party in respect of which a claim is to be made against an
indemnifying party or parties under this Section, notify such indemnifying party
of the commencement of such action, enclosing a copy of all papers served, but
the omission so to notify the indemnifying party will not relieve it from any
liability that is may have to any indemnified party under the foregoing
provisions of this Section unless, and only to the extent that, such omission
results in the forfeiture of substantive rights or defenses by the indemnifying
party. If any such action is
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brought against any indemnified party and it notifies the indemnifying party of
its commencement, the indemnifying party will be entitled to participate in and,
to the extent that it elects by delivering written notice to the indemnified
party promptly after receiving notice of the commencement of the action from the
indemnified party, to assume the defense of the action, with counsel
satisfactory to the indemnified party, and after notice from the indemnifying
party to the indemnified party of its election to assume the defense, the
indemnifying party will not be liable to the indemnified party for any legal or
other expenses except as provided below and except for the reasonable costs of
investigation subsequently incurred by the indemnified party in connection with
the defenses. The indemnified party will have the right to employ its own
counsel in any such action, but the fees, expenses, and other charges of such
counsel will be at the expense of such indemnified party unless (1) the
employment of counsel by the indemnified party has been authorized in writing by
the indemnifying party, (2) the indemnified party has reasonably concluded
(based on advice of counsel) that there may be legal defenses available to it
that are different from or in addition to those available to the indemnifying
party, (3) a conflict or potential conflict exists (based on advice of counsel
to the indemnified party and the indemnifying party (in which case the
indemnifying party will not have the right to direct the defense of such action
on behalf of the indemnified party) or (4) the indemnifying party has not in
fact employed counsel to assume the defense of such action within a reasonable
time after receiving notice of the commencement of the action, in each of which
cases the reasonable fees, disbursements and other charges of counsel will be at
the expense of the indemnifying party or parties. It is understood that the
indemnifying party shall not in connection with any proceeding or related
proceeding in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of ore than one separate firm admitted to
practice in such jurisdiction at any one time for such indemnified party or
parties. All such fees, disbursements and other charges will be reimbursed by
the indemnifying party promptly as they are incurred.
(d) The Client will not, without the prior written consent of the
Consultant (which consent will not be unreasonably withheld), settle or
compromise or consent tot he entry of any judgment in any pending or threatened
claim, action, suit or proceeding in respect of which indemnification may be
sought hereunder (whether or not the Consultant is a party to such claim,
action, suit or proceeding), unless such settlement, compromise or consent
includes an unconditional release of the Consultant from all liability arising
out of such claim, action, suit, or proceeding. An indemnifying party will not
be liable for any settlement or any action or claim effected without its written
consent (which consent will not be unreasonably withheld).
(e) The Consultant will not, without the prior written consent of the
Client (which consent will not be unreasonably withheld), settle or compromise
or consent to the entry of any judgment in any pending or threatened claim,
action, suit or proceeding in respect of which indemnification may be sought
hereunder (whether or not the Client is a party to such claim, action, suit or
proceeding), unless such settlement, compromise or consent includes an
unconditional release of the Client from all liability arising out of such
claim, action, suit or proceeding. An indemnifying party will not be liable for
any settlement
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or any action or claim effected without its written consent (which consent will
not be unreasonably withheld).
O. No Third Party Beneficiary.
Nothing in this Agreement, expressed or implied, is intended to confer
upon any person, other than the parties hereto and their successors, any rights
or remedies under or by reason of this Agreement, unless this Agreement
specifically states such intent.
P. Facsimile Counterparts.
If a party signs this Agreement and transmits an electronic facsimile
of the signature page to the other party, the party who receives the
transmission may rely upon the electronic facsimile as a signed original of this
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement. DATED this
22nd day of October, 1996.
Client
The Tracker Corporation of America,
a Delaware corporation
By: /s/ Xxxxx Xxxxx
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Name: Xxxxx Xxxxx
Title: President
Consultant
/s/ Xxxxxxx Marches
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Name: Xxxxxxx Marches
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