EXHIBIT 10.14
AMENDED AND RESTATED CONSULTING AND INDEMNITY AGREEMENT
This Amended and Restated Consulting Agreement (this "Agreement"), is made and
entered into as of this 30th day of June, 2006 by and between Bluestar Health,
Inc., a Colorado corporation ("Bluestar" or the "Company") and Xxxxxx Xxxxxxx,
an individual ("Xxxxxxx" or the "Consultant").
RECITALS
WHEREAS, the Company has previously entered into multiple agreements with
Xxxxxxx in connection with the unsuccessful attempted acquisition of Gold Leaf
Homes, Inc., among which are a Consulting Agreement dated February 13, 2006 and
an Indemnity Agreement dated October 15, 2005; and
WHEREAS, the Company and Xxxxxxx desire to recognize the changed circumstances
caused by the rescission of the Gold Leaf transaction and revise certain of
their contractual arrangements accordingly and retroactively.
NOW, THEREFORE, in consideration of the mutual promises herein contained, the
parties hereto hereby agree as follows:
1. TERMINATION OF PRIOR AGREEMENTS
The Company and Xxxxxxx hereby agree that the following prior agreements or
obligations are terminated in their entirety with no further obligation or
liability on the part of either the Company or Xxxxxxx to the other except as is
specifically contained in this Agreement:
a) Consulting Agreement dated February 13, 2006
b) Indemnity Agreement dated October 15, 2005
c) Transitional Agreement dated February 13, 2006
d) Escrow Agreement dated February 13, 2006
e) Promissory Note to Xxxxxxx for $130,000 dated October 15, 2005
f) Promissory Note to Xxxxxxx for $150,000 dated February 26, 2006
2. CONSULTING SERVICES
The Company hereby authorizes, appoints and engages the Consultant, and
Consultant agrees to be available to consult with the Company's officers and
directors from March 1, 2006 for a minimum of the next eighteen (18) months
following the date of this Agreement, on projects agreed to in writing by the
parties. The Company may request Consultant to work on projects in the following
areas (the "Consulting Services"):
(a) Provide counsel regarding mergers and acquisitions, recapitalizations,
and restructurings; and
(b) Provide office space, telephone, internet and general office and
administrative support services and supplies.
Throughout this Agreement, the term "Consultant" shall include any and all
employees or independent contractors of Consultant that performs services for
the Company.
1
3. TERM OF CONSULTING AGREEMENT
This Agreement shall be in full force and effect from March 1, 2006 for a
period of eighteen (18) months, or until the Company's acquisition transaction
with Zeon Fuel, Inc. closes, whichever occurs later. At the end of the term,
this Agreement will automatically terminate.
4. INDEMNIFICATION
(a) Company shall issue to Xxxxxxx 1,000,000 shares of its common stock in
consideration of Xxxxxxx'x agreement to indemnify the Company. The shares will
not be registered with the Securities and Exchange Commission and will be
subject to substantial restrictions and limitations on resale.
(b) Xxxxxxx shall indemnify and hold harmless the Company and its
directors, officers, and employees from any Loss (defined below) related in any
way or arising from:
(i) the physical therapy business previously operated by the Company
or any of its subsidiaries, specifically including but not limited to:
Bluestar Health, Inc. (CO), Bluestar Physical Therapy, Inc. (TX) and
Bluestar P.T., Inc. (TX); and
(ii) a $70,000 debt owed by the Company to Rick's Cabaret, plus any
interest and penalties thereon;
(iii) The following specific amounts payable or contingent liabilities
(related to events prior to February 13, 2006) plus any interest,
penalties or related Losses:
Amounts Payable
---------------
PARTY AMOUNT
Accrued Items - Mississippi Clinic $52,500
Accrued Items - Canton Clinic 5,700
Note Payable - Hibernia Bank 44,380
Note Payable - Merchant Farmers 11,258
Note Payable - Rick's Cabaret 70,000
Settlement - Xxxxx Xxxx 15,000
A/P - Computershare Trust Co. 2,097
X/X - Xxxxxx Xxxxxxxxx 000
X/X - ADP 368
2
A/P - Mac Experts 305
Lease - Tower Executive Suites 1,389
Miscellaneous Items 2,788
Total Specific Liabilities $206,456
Contingent Liabilities Include
------------------------------
PARTY
Bank One / Arrow Financial Services
Bank of America
Xxxxxxxx Group
Xxxxxx Xxxxxx LLP / Valor Entertainment
ADP / Levy Diamond Bello
Xxxx Xxxxxx & Associates
Christian, Xxxxx & Xxxxxx
Healthquest and related parties
(c) "Losses" shall include:
(i) any expense, liability, contractual obligation, account payable,
or loss, including attorney fees, judgments, fines,F ERISA excise
taxes and penalties, and amounts paid or to be paid in settlement;
(ii) any interest, assessments, or other charges imposed on any of the
items in part (i) of this subsection (c); and
(iii) any federal, state, local, or foreign taxes imposed as a result
of the actual or deemed receipt of any payments under this Agreement
paid or incurred in connection with investigating, defending, being a
witness in, participating in (including on appeal), or preparing for
any of the foregoing in any proceeding relating to any Loss or in the
enforcement of this Agreement.
(d) Xxxxxxx shall provide, in Xxxxxxx'x reasonable discretion, either
provide a defense from any claim which would constitute a Loss, or discharge the
claim in order to indemnify the Company. The Company shall provide Xxxxxxx with
prompt notice of any asserted claim or Loss in order to permit Xxxxxxx to
indemnify and defend the Company from Loss.
3
5. COMPENSATION TO CONSULTANT
(a) The Consultant's compensation for the Consulting Services shall be
$11,000 per month ("Consulting Compensation") commencing April 1, 2006, and
continuing for each full or partial month of the term of this Agreement.
(b) The Consulting Compensation shall be paid in shares of the common stock
of Company in an amount equal to the Consulting Compensation due at the end of
each months divided by the closing price of the common stock on the last trading
day of the month. The shares will not be registered with the Securities and
Exchange Commission and will be subject to substantial restrictions and
limitations on resale.
Consultant understands that NO DEDUCTION FOR FEDERAL, STATE OR OTHER
GOVERNMENTAL SUBDIVISION TAXES OR CHARGES OF ANY TYPE WILL BE MADE FROM THE
AMOUNT DUE CONSULTANT UNDER THE TERMS OF THIS AGREEMENT. CONSULTANT FULLY AND
COMPLETELY UNDERSTANDS THAT IT IS SOLELY AND TOTALLY RESPONSIBLE FOR THE PAYMENT
OF ALL SUCH TAXES OR CHARGES. At the end of the calendar year, Consultant shall
receive a Form 1099 notifying the Internal Revenue Service of all compensation
paid to Consultant by the Company.
The Company hereby agrees to pay the following expenses of Consultant:
(c) Business expenses. The Company shall pay Consultant for all reasonable
business expenses incurred by Consultant in the course of performing the
consulting duties described in this Agreement. Consultant shall obtain the prior
approval of Company prior to incurring any expenses in excess of $500. Expense
reimbursements shall be subject to review of appropriate supporting documents.
6. CONFIDENTIALITY
Consultant will maintain in confidence and will not, directly or indirectly,
disclose or use, either during or after the term of this Agreement, any
proprietary information or confidential information or know-how belonging to the
Company, whether or not it is in written or permanent form, except to the extent
necessary to perform the services under this Agreement. On termination of
Consultant's services to the Company, or at the request of the Company before
termination, Consultant shall deliver to the Company all material in
Consultant's possession relating to the Company's business. The obligations
concerning proprietary information extend to information belonging to customers
and suppliers of the Company about whom the Consultant may have gained knowledge
as a result of performing services for the Company.
7. TERMINATION
The Company shall have the right to terminate this Agreement at any time in the
event of the death, bankruptcy, insolvency, or assignment for the benefit of
creditors of the Consultant. Consultant shall have the right to terminate this
Agreement at any time if the Company fails to comply with the terms of this
Agreement, including without limitation its responsibilities for compensation as
set forth in this Agreement. Other than as described herein, this Agreement can
only be terminated in a writing signed by both parties.
4
8. REPRESENTATIONS AND WARRANTIES OF CONSULTANT
Consultant represents and warrants to and agrees with the Company that:
(a) This Agreement has been duly authorized, executed and delivered by
Xxxxxxx. This Agreement constitutes the valid, legal and binding obligation of
Xxxxxxx, enforceable in accordance with its terms, except as rights to indemnity
hereunder may be limited by applicable federal or state securities laws, and
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting creditor's rights generally; and
(b) The consummation of the transactions contemplated hereby will not
result in any breach of the terms or conditions of, or constitute a default
under, any agreement or other instrument to which Xxxxxxx is a party, or violate
any order, applicable to Xxxxxxx, of any court or federal or state regulatory
body or administrative agency having jurisdiction over Xxxxxxx or over any of
its property, and will not conflict with or violate the terms of Xxxxxxx'x
current employment or any other arrangements to which Xxxxxxx is a party.
9. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY
The Company hereby represents, warrants, covenants to and agrees with Xxxxxxx
that:
This Agreement has been duly authorized, and executed by the Company and is a
binding obligation of the Company, enforceable in accordance with its terms,
except as rights to indemnity hereunder may be limited by applicable federal or
state securities laws, except in each case as such enforceability may be limited
by bankruptcy, insolvency, reorganization or similar laws affecting creditor's
rights generally.
10. INDEPENDENT CONTRACTOR
Both the 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 the Company. Neither
party hereto shall have any authority to bind the other in any respect vis a vis
any third party, it being intended that each shall remain an independent
contractor and responsible only for its own actions.
11. REGISTRATION OF SHARES
Xxxxxxx may request registration of all shares issued pursuant to this Agreement
at any time after the sixth month following termination of the Agreement. If the
Company is current in its reporting with the Securities and Exchange Commission,
under the Exchange Act of 1934 ("34 Act") the Company shall use reasonable
efforts to effect the registration under the Securities Act of 1933 ("33 Act")
5
as soon as practicable, and in any event within sixty (60) days of receiving
Xxxxxxx'x notice. The Company shall not be obligated to effect, or to take any
action to effect, any registration pursuant to this Section 11 if the Chief
Executive Officer in consultation with the board of directors of the Company,
determines in good faith that it would be seriously detrimental to the Company
and its stockholders for such registration statement to be filed and it is
therefore essential to defer the filing. In this event, the Company may defer
the taking of action with respect to such a filing for a period of not more than
90 days after Xxxxxxx'x request to register. The Company shall have the
discretion to select the form of registration to be utilized and whether to
include shares of Xxxxxxx in a registration of shares offered by the Company or
other selling shareholders.
All reasonable expenses (other than underwriting discounts and commissions)
incurred in connection with registrations, filings or qualifications pursuant to
this Section 11, including, without limitation, all registration, filing and
qualification fees, printers' and accounting fees, fees and disbursements of
counsel for the Company shall be paid by the Company.
12. ASSIGNMENT
This contract shall inure to the benefit of the parties hereto, their heirs,
administrators and successors in interest. This Agreement shall not be
assignable by either party hereto without the prior written consent of the
other.
13. CHOICE OF LAW AND VENUE
This Agreement and the rights of the parties hereunder shall be governed by and
construed in accordance with the laws of the State of Texas including all
matters of construction, validity, performance, and enforcement and without
giving effect to the principles of conflict of laws. Any action brought by any
party hereto shall be brought within the County of Xxxxxx, State of Texas.
14. ENTIRE AGREEMENT
Except as provided herein, this Agreement, including exhibits, contains the
entire agreement of the parties, and supersedes all existing negotiations,
representations, or agreements and all other oral, written, or other
communications between them concerning the subject matter of this Agreement.
There are no representations, agreements, arrangements, or understandings, oral
or written, between and among the parties hereto relating to the subject matter
of this Agreement that are not fully expressed herein.
15. SEVERABILITY
If any provision of this Agreement is unenforceable, invalid, or violates
applicable law, such provision, or unenforceable portion of such provision,
shall be deemed stricken and shall not affect the enforceability of any other
provisions of this Agreement.
6
16. CAPTIONS
The captions in this Agreement are inserted only as a matter of convenience and
for reference and shall not be deemed to define, limit, enlarge, or describe the
scope of this Agreement or the relationship of the parties, and shall not affect
this Agreement or the construction of any provisions herein.
17. COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of which shall
be deemed an original, but all of which shall together constitute one and the
same instrument.
18. MODIFICATION
No change, modification, addition, or amendment to this Agreement shall be valid
unless in writing and signed by all parties hereto.
19. ATTORNEYS FEES
Except as otherwise provided herein, if a dispute should arise between the
parties including, but not limited to arbitration, the prevailing party shall be
reimbursed by the non-prevailing party for all reasonable expenses incurred in
resolving such dispute, including reasonable attorneys' fees.
20. NOTICES
Any notice, request, demand, or other communication given pursuant to the terms
of this Agreement shall be deemed given upon delivery, and may only be delivered
or sent via hand delivery, facsimile, or by overnight courier, correctly
addressed to the addresses of the parties indicated below or at such other
address as such party shall in writing have advised the other party.
If to the Company: Bluestar Health, Inc.
00000 Xxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxx Xxxx, XX, 00000
Attn: President
Facsimile No.: (000) 000-0000
If to Consultant: Xxxxxx Xxxxxxx
00000 Xxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first written above.
Bluestar Health, Inc., Consultant - Xxxxxxx
a Colorado corporation
By: ___________________________ ______________________________
Xxxxxxx X. Xxxxxxxxx, President Xxxxxx Xxxxxxx
7
