CONSULTANT COMPENSATION AGREEMENT NO. 2
THIS CONSULTANT COMPENSATION AGREEMENT (the "Plan") is made as
of this 8th day of October, 1998, among Xxxxx Educational Systems,Inc., a
Delaware corporation ("Xxxxx"); and Xxxx X. Xxxxx and Xxxxxx X. Xxxxxxx, who
have executed and delivered this Plan by the execution and delivery of the
Counterpart Signature Pages which are designated as Exhibits "A" and "B"
hereof (collectively, the "Consultants").
WHEREAS, the Board of Directors of Xxxxx has adopted a written
compensation agreement for compensation of two individual Consultants who are
natural persons, both of whom are consultants; and
WHEREAS, Xxxxx has engaged the Consultants to provide services
at the request of and subject to the satisfaction of its management; and
WHEREAS, the Consultants have and will provide services at the
request and subject to the approval of the management of Xxxxx; and
WHEREAS, a general description of the nature of the services
performed and to be performed by the Consultants and the maximum value of such
services under this Plan are listed in the Counterpart Signature Pages; and
WHEREAS, Xxxxx and the Consultants intend that this Plan and
the services performed hereunder shall be made, requested and performed in
such a manner that this Plan shall be a "written compensation agreement" as
defined in Rule 405 of the Securities and Exchange Commission ("Commission")
pursuant to which Xxxxx xxx issue "freely tradeable" shares (except as may be
limited by "affiliate" status) of its common stock as payment for services
rendered pursuant to an S-8 Registration Statement to be filed with the
Commission by Xxxxx;
NOW, THEREFORE, in consideration of the mutual covenants and
promises contained herein, it is agreed:
Section 1
Compensation Plan
1.1 Employment. Xxxxx hereby employs the Consultants and the
consultants hereby accept such employment, and have and will perform the
services requested by management of Xxxxx to its satisfaction during the term
hereof. The services performed by the Consultants hereunder have been and
will be personally rendered by the Consultants, and no one acting for or on
behalf of the Consultants, except those persons normally employed by the
consultants in rendering services to others, such as secretaries, bookkeepers
and the like.
1.2 Independent Contractors. Regardless of the Consultants'
status as "employees" under Rule 405 of the Commission, all services rendered
by the Consultants hereunder have been rendered as independent contractors,
and the Consultants shall be liable for any FICA taxes, withholding or other
similar taxes or charges, and the Consultants shall indemnify and hold Xxxxx
harmless therefrom; it is understood and agreed that the value of all such
items has been taken into account by the Consultants in computing the billable
rate for the services the Consultants have rendered and agreed to render to
Xxxxx.
1.3 Term. All services performed at the request of Xxxxx by the
Consultants shall have been performed within two years from the date hereof,
at which time this Plan shall terminate, unless otherwise provided herein.
1.4 Payment. Xxxxx and the Consultants agree that Xxxxx shall
pay the invoices of the Consultants for the services performed under this Plan
by the issuance of shares of its common stock at a price of $1.75 per share;
provided, however, such shares of common stock shall be issued pursuant to and
shall be subject to the filing and effectiveness of a Registration Statement
on Form S-8 covering such shares with the Commission.
1.5 Invoices for Services. On the completion of rendering the
services performed by the Consultants hereunder, each of the Consultants shall
provide Xxxxx with a written invoice detailing the services duly performed.
Such invoice shall be paid by Xxxxx in accordance with Section 1.4 above,
subject to the satisfaction of the management of Xxxxx that the services have
been performed, and to the extent performed, that the performance was in a
satisfactory manner. The submission of an invoice for the services performed
by each of the Consultants shall be deemed to be a subscription by the
respective Consultants to purchase shares of common stock of Xxxxx at the
price outlined in Section 1.4 above, subject only to the filing and
effectiveness of a Registration Statement on Form S-8 covering such shares
with the Commission.
1.6 Common Stock Price. To the extent deemed required or
necessary and for all purposes of this Plan, the Consultants shall have an
"option" covering such shares of common stock at the per share price set forth
in paragraph 1.4 above during the term hereof, which may be paid and exercised
in services or cash; the Consultants assume the risk of any decrease in the
per share price or value of the shares of common stock of Xxxxx that may be
issued by Xxxxx for services performed by the Consultants hereunder, and the
Consultants agree that any such decrease shall in no way affect the rights,
obligations or duties of the Consultants hereunder.
1.7 Limitation on Services. None of the services rendered by
the Consultants and paid for by the issuance of shares of common stock of
Xxxxx shall be services related to any "capital raising" transaction.
1.8 Delivery of Shares. On submission of an invoice for
services actually performed by the respective Consultants, and duly verified
to the satisfaction of Xxxxx, and subject to the filing and effectiveness of a
Registration Statement on Form S-8 of the Commission covering such shares, one
or more stock certificates representing such shares shall be delivered to the
respective Consultants at the addresses listed on the Counterpart Signature
Pages, unless another address shall be provided to Xxxxx in writing prior to
the issuance of such shares.
1.9 Adjustments in the Number of Shares of Common Stock and
Price Per Share. Xxxxx and the Consultants agree that the per share price of
shares of common stock that may be issued by Xxxxx to the Consultants for
services performed under this Plan has been arbitrarily set by Xxxxx; however,
in the event Xxxxx shall undergo a merger, consolidation, reorganization,
recapitalization, declare a stock dividend of its shares of common stock or
cause to be implemented a forward or reverse stock split which affects the
present number of issued and outstanding shares of common stock of Xxxxx prior
to the issuance of shares to the Consultants, that the per share price and the
number of shares issuable to the Consultants for services actually rendered
hereunder after such event shall be appropriately adjusted to reflect any such
event.
1.10 Effective Date. The Effective Date of the Plan for each of
the Consultants shall be the date set forth on the respective Counterpart
Signature Pages.
1.11 Conditions. The Plan is subject to the following condition,
to-wit:
The number of shares of common stock to be issued under the
Plan shall in no event exceed 10% of the total issued and
outstanding shares of common stock of the Company on the
date of issuance.
Section 2
Representations and Warranties of Xxxxx
Xxxxx represents and warrants to, and covenants with, the
Consultants as follows:
2.1 Corporate Status. Xxxxx is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and is licensed or qualified as a foreign corporation in all states in which
the nature of its business or the character or ownership of its properties
makes such licensing or qualification necessary.
2.2 Compensation Plan. The Board of Directors of Xxxxx has duly
adopted a written compensation agreement as defined in Rule 405 of the
Commission pursuant to which Xxxxx xxx issue "freely tradeable" shares of its
common stock on the exercise of options as payment for services rendered, or
for cash subject to the filing and effectiveness of an S-8 Registration
Statement to be filed with the Commission by Xxxxx.
2.3 Registration Statement on Form S-8. Xxxxx shall engage the
services of a competent professional to prepare and file a Registration
Statement on Form S-8 with the Commission to cover the shares of common stock
to be issued under the Plan; shall cooperate with such professional in every
manner whatsoever to the extent reasonably required or necessary so that such
Registration Statement shall be competently prepared, which such Registration
Statement shall not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements made therein,
in light of the circumstances under which they were made, not misleading, and
which such Registration Statement shall become effective immediately upon its
filing; such Registration Statement shall be prepared at the sole cost and
expense of Xxxxx; and Xxxxx will provide to the Consultants prior to the
issuance and delivery of any such shares of common stock a copy of such
Registration Statement, the Compensation Plan adopted by its Board of
Directors, all quarterly, annual or current reports or other documents
incorporated by reference into such Registration Statement and any other
similar reports filed or publicly disseminated following the effective date of
any such Registration Statement.
2.4 Federal and State Securities Laws, Rules and Regulations.
Xxxxx shall fully comply with any and all federal or state securities laws,
rules and regulations governing the issuance of any such shares of common
stock.
2.5 Limitation on Services. Xxxxx shall not request the
Consultants to perform any services in connection with any "capital raising"
transaction under this Plan.
2.6 Reports With the Commission. Xxxxx is required to file
reports with the Commission pursuant to Section 13 of the Securities Exchange
Act of 1934, as amended (the "1934 Act"), and Xxxxx has or will file with the
Commission all reports required to be filed by it forthwith, and shall
continue to file such reports with the Commission so long as required, but for
a period of not less than one year; and such reports are or will be true and
correct in every material respect.
2.7 Corporate Authority and Due Authorization. Xxxxx has full
corporate power and authority to enter into this Plan and to carry out its
obligations hereunder. Execution of this Plan and performance by Xxxxx
hereunder have been duly authorized by all requisite corporate action on the
part of Xxxxx, and this Plan constitutes a valid and binding obligation of
Xxxxx and performance hereunder will not violate any provision of the Articles
of Incorporation, Bylaws, agreements, mortgages or other commitments of Xxxxx.
Section 3
Representations and Warranties of the Consultants
Each of the Consultants represents and warrants to, and
covenants with, Xxxxx as follows:
3.1 Employment. Each of the Consultants hereby accepts
employment by Xxxxx for the services performed pursuant to this Agreement.
The services performed by the Consultants hereunder have been personally
rendered by the Consultants, and no one acting for or on behalf of the
Consultants.
3.2 Accredited Investors. Each of the Consultants represents
and warrants that, by reason of income, net assets, education, background and
business acumen, the Consultants have the experience and knowledge to evaluate
the risks and merits attendant to an investment in shares of common stock of
Xxxxx, either singly or through the aid and assistance of a competent
professional, and are fully capable of bearing the economic risk of loss of
the total investment of services; further, they are "accredited investors" as
that term is defined under the 1933 Act or the rules and regulations
promulgated thereunder.
3.3 Suitability of Investment. Prior to the execution of this
Plan, each of the Consultants shall have provided the services outlined in the
respective Counterpart Signature Pages to Xxxxx, and the Consultants, singly,
or through the advice of a competent professional, fully believe that an
investment in shares of common stock of Xxxxx is a suitable investment for the
Consultants.
3.4 Limitation on Services. None of the services rendered by
the Consultants and paid for by the issuance of shares of common stock of
Xxxxx shall be services related to any "capital raising" transaction.
3.5 Authority and Authorization. Each of the Consultants has
full power and authority to enter into this Plan and carry out the obligations
hereunder. Execution of this Plan and performance by the Consultants
hereunder constitutes a valid and binding obligation of the Consultants and
performance hereunder will not violate any other agreement to which any of the
Consultants is a party.
Section 4
Indemnity
Xxxxx and the Consultants agree to indemnify and hold the other
harmless for any loss or damage resulting from any misstatement of a material
fact or omission to state a material fact by the other contained herein or
contained in the S-8 Registration Statement of Xxxxx to be filed hereunder, to
the extent that any misstatement or omission contained in the Registration
Statement was based upon information supplied by the other.
Section 5
Termination
Prior to the performance of services hereunder, this Plan may
be terminated (1) by mutual consent of Xxxxx and the respective Consultants in
writing; (2) by either the Directors of Xxxxx or the respective Consultants if
there has been a material misrepresentation or material breach of any warranty
or covenant by the other party; and (3) shall automatically terminate at the
expiration of the term hereof, provided, however, all representations and
warranties shall survive the termination hereof; provided, further, however,
that any obligation of Xxxxx to pay for any services actually rendered by the
Consultants hereunder shall survive any such termination.
Section 6
General Provisions
6.1 Further Assurances. At any time, and from time to time,
after the execution hereof, each party will execute such additional
instruments and take such action as may be reasonably requested by the other
party to carry out the intent and purposes of this Plan.
6.2 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been given if delivered in
person or sent by prepaid first-class registered or certified mail, return
receipt requested, as follows:
If to Xxxxx: P. O. Xxx 000
Xxxxxxxxx, Xxxxxxxxxx 00000
If to Consultants: The addresses listed on the
Counterpart Signature Pages
6.3 Entire Agreement. This Plan constitutes the entire
agreement between the parties and supersedes and cancels any other agreement,
representation, or communication, whether oral or written, between the parties
hereto relating to the transactions contemplated herein or the subject matter
hereof.
6.4 Headings. The section and subsection headings in this Plan
are inserted for convenience only and shall not affect in any way the meaning
or interpretation of this Plan.
6.5 Governing law. This Plan shall be governed by and construed
and enforced in accordance with the laws of the State of Delaware, except to
the extent pre-empted by federal law, in which event (and to that extent
only), federal law shall govern.
6.6 Assignment. Neither Xxxxx nor the Consultants can assign
any rights, duties or obligations under this Plan, and in the event of any
such assignment, such assignment shall be deemed null and void.
6.7 Counterparts. This Plan may be executed simultaneously in
one or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Plan effective
the day and year first above written.
XXXXX EDUCATIONAL SYSTEMS, INC.
By/s/Xxxxx X. Xxxxx
President
EXHIBIT "A"
CONSULTANT COMPENSATION AGREEMENT NO. 2
COUNTERPART SIGNATURE PAGE
THIS COUNTERPART SIGNATURE PAGE for that certain Consultant
Compensation Agreement No. 2 among Xxxxx Corporation and the undersigned
Consultant is executed as of the date set forth hereinbelow.
Consultant:
Xxxx X. Xxxxx
Suite 201, Hermes Building
455 East 000 Xxxxx Xxxxxx
Xxxx Xxxx Xxxx, XX 00000
Date: 10/8/98 /s/Xxxx X. Xxxxx
Number of Shares and
Maximum Aggregate Value of Option
for Services
General Description of Services to be Performed
or cash paid
Services rendered (or cash expenses) in 300,000 shares-$525,000
regards to non-capital raising issues and Aggregate Value of Options
as will be set forth in invoices to Xxxxx as
payment of the option price.
EXHIBIT A-1
October 8, 1998
Xx. Xxxxxxx X. Xxxxxxxxxx
000 Xxxx Xxxxx Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Regarding Xxxxx Educational Systems, Inc.
The following is a list of services that I have provided for Xxxxx Educational
Systems, Inc.
Massive alliance planning.
Strategic corporate partnerships
Negotiations on contracts and potential partnerships and/or
buyouts. Developing organizational tools, agreements and
contracts.
Market analysis and planning of products.
Corporate planning to incorporate business plans, proforma's and
projections. Developing, incorporating and planning for overrides
and royalty agreements.
I have also attached for your information, my written responses that relates
to your Memorandum on the "Securities Act Release No. 7506 dated February 17,
1998, Respecting S-8".
Please advise me if you have any further questions.
Sincerely,
/s/Xxxx Xxxxx
EXHIBIT "B"
CONSULTANT COMPENSATION AGREEMENT NO. 2
COUNTERPART SIGNATURE PAGE
THIS COUNTERPART SIGNATURE PAGE for that certain Consultant
Compensation Agreement No. 2 among Xxxxx Corporation and the undersigned
Consultant is executed as of the date set forth hereinbelow.
Consultant:
Xxxxxx X. Xxxxxxx
Xxxxx 000, Xxxxxx Xxxxxxxx
000 Xxxx 000 Xxxxx Xxxxxx
Xxxx Xxxx Xxxx, XX 00000
Date: 10/8/98 /s/Xxxxxx X. Xxxxxxx
Number of Shares and
Maximum Aggregate Value of Options
for Services
General Description of Services to be Performed
or cash paid
services rendered (or cash expenses) in 300,000 shares-$525,000
regards to non-capital raising issues and Aggregate Value of Option
as will be set forth in invoices to Xxxxx as
payment of the option price.
September 22, 1998
Xx. Xxxxxxx Xxxxxxxxxx
000 Xxxx Xxxxx Xxxxx
Xxxx Xxxx xxxx, Xxxx 00000
Re: Xxxxx Educational System, Inc.
This letter is to advise you of the services that I have provided and will
continue to provide to the above referenced company.
I have consulted with the Company regarding its:
Business Plan - Specifically the writing, documenting and producing.
10K, and I0Q
CPA and the Company's audits
Corporate structure - Specifically new Board members and advisors
Projections and Proforma
Strategic Alliances with other educational groups, corporations,
entities or individuals.
Distribution channels for its products
Marketing techniques for current and future products
Coordination of seminars for product development and distribution.
Long range forecasting for product and sales
I have also attached to this letter a copy of your Memorandum with my written
comments regarding the prohibitions relating to the services I have and will
continue to render to the company.
Thank you
/s/Xxxxxx X. Xxxxxxx
Consultant
