CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (this "Agreement") is made by and between Network
Lifestyle Radio Corp., a Delaware corporation (the "Company"), and Xxxxxxx
Xxxxx (the "Consultant"), and is made effective as of the 1st day of November,
2001.
RECITALS
A. The Consultant has significant experience in providing
consulting services related to the development of field forces and execution
of events to promote companies and products.
B. The Company has a business model under which the Company,
through its wholly-owned subsidiary, XXXX.XX, markets and promotes products
and services, using a unique marketing system developed by the Company (the
"Business").
C. The Company wishes to retain the services of Consultant and
Consultant wishes to provide services to the Company as a consultant on
certain matters related to: (i) the marketing and promoting the Company's
business and products; (ii) the marketing and recruiting of "Lifestyle
Consultants"; and (iii) assisting in the development and execution of the
Company's business plan, on behalf of the Company.
D. The Company and Consultant intend that neither their
relationship nor any provision of this Agreement shall be interpreted as
creating an employer-employee, master-servant, agency, partnership or joint
venture relationship between them, and that Consultant will conduct the
services specified under this Agreement as an independent contractor.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and
conditions set forth herein, the parties agree as follows:
1. Consulting Services and Hours Required.
(a) Consultant agrees, as and when requested by the Company,
to provide the Company with such services or advice, analysis and expertise
regarding the promotional, marketing, financial, operational, developmental or
other aspects of the Business (the "Services").
(b) Consultant agrees to provide the aggregate number of hours
of Services during the term of this Agreement to fulfill their
responsibilities as requested by the board of directors.
(c) Consultant agrees to, if requested, hold an executive
position with the Company.
2. Compensation. As consideration for the performance of the
Services by Consultant in accordance with the terms of this Agreement, the
Company shall pay Consultant the amount of $10,000.00 per month in arrears for
the Services provided. The Company shall grant the Consultant 60,000
incentive stock options to purchase common shares of the Company at a price to
be determined.
3. Office Space and Expenses. Consultant shall be responsible
for his own office space and equipment necessary to perform the Services. The
Company agrees to reimburse Consultant for all reasonable travel and business
expenses incurred by Consultant in connection with the performance of the
Services in which Consultant provides an itemized statement of such expenses
and such other supporting documentation to the Company may be reasonably
requested ("Expenses").
4. Term. The term of this Agreement shall commence on the date
hereof and shall continue for six months unless terminated earlier pursuant to
Paragraph 10 (the "Term").
5. Benefits; Insurance. Consultant is not an employee of the
Company and is not entitled to participate in any plans, arrangements, or
distributions by the Company for its employees including, but not limited to,
pension, profit sharing, bonus, medical insurance, dental insurance, life
insurance, disability insurance, vacation and/or sick leave plans or
arrangements. Consultant hereby waives any right he may subsequently be
deemed to have to any such benefits of the Company in the event that his
status is characterized in a way which would otherwise entitle him to such
benefits.
6. Independent Contractor; Payment of Taxes and Fees;
Qualifications.
(a) The parties understand and agree that Consultant is an
independent contractor engaged in the operation of his own business and that
Consultant shall not be considered an employee, servant or agent of, or
partner or venturer with, the Company for any purpose whatsoever. The parties
further agree that Consultant has no general authority to enter into any
contract, assume any obligations or make any warranties or representations on
behalf of the Company except as otherwise specifically authorized by the
Company. In addition, Consultant shall not hold himself out or otherwise
represent himself as an employee, servant or agent of, or partner or venturer
with, the Company.
(b) To the extent provided by law, Consultant shall have the
sole and absolute discretion and judgment as to the manner and means of
carrying out his business activities. The Company shall have no right to
control or direct and shall in fact exercise no control over Consultant's
duties hereunder and shall not have any say in the details or manner in which
the duties are carried out. Consultant shall provide proof to the Company, if
requested, that he has obtained all necessary licenses, paid all necessary
fees, filed all necessary tax returns, paid all income, self employment and
excise taxes or other taxes necessary, and filed and paid all premiums
necessary and consistent with his status as an independent contractor.
Consultant shall hold harmless and defend the Company against all claims,
losses and damages arising from or connected with the breach of his
obligations under this provision.
(c) Consultant shall, at his own expense, pay all fees arising
out of his performance of this Agreement. Persons performing work for
Consultant in accordance with this Agreement are employees of Consultant and
Consultant is solely responsible for payment of all payroll taxes, benefits,
worker's compensation, trust fund contributions and other deductions,
withholdings and contributions under applicable laws and agreements pertaining
to other persons performing work for Consultant in accordance with this
Agreement. Upon request of the Company, Consultant shall provide proof of
having made such payments, contributions, deductions and withholdings. The
Company shall not be responsible for any such payments, benefits,
contributions, deductions or withholdings with regard to employees of
Consultant.
(d) Consultant represents and warrants that Consultant has the
expertise, qualifications, training and capability to perform the Services.
Consultant is solely responsible for the training of any employees of
Consultant assigned to perform services in accordance with this Agreement.
7. Confidentiality; Non-Solicitation/Compete.
(a) Consultant acknowledges that the Company's business and
future success depends on preservation of trade secrets and other
confidential, proprietary information concerning the Company, its affiliates,
its celebrity sponsors, product or service endorsers, participants in the
Company's marketing, nutritional and health care programs and customers
("Secrets"). These Secrets include, without limitation: all business plans
and marketing strategies; relationships developed in the course of the
Business; information concerning existing and prospective markets and
customers; financial information; information concerning the development of
new products and services; and technical and non-technical data related to
software programs, designs, specifications, compilations, inventions,
improvements, methods, processes, procedures and techniques; provided,
however, that the phrase does not include information that (a) was lawfully in
Consultant's possession prior to disclosure of such information by the
Company; (b) was, or at any time becomes, available in the public domain other
than through a violation of this Agreement; (c) is documented by Consultant as
having been developed by Consultant outside the scope of Consultant's Services
and independently; or (d) is furnished to Consultant by a third party not
under an obligation of confidentiality to the Company. Consultant agrees to
protect and preserve these Secrets as confidential both during and
indefinitely after the term of this Agreement, whether the Secrets are
contained in a tangible medium, or merely remembered, whether wholly or partly
developed by Consultant or provided to Consultant. Consultant will not
disclose, in whole or in part, in public or in private, any of the Secrets
except as specifically directed by the Company.
(b) Consultant shall neither use nor allow any other person to
use any of the Secrets in any way, except for the benefit of the Company. All
tangible material containing or in any way disclosing any Secret is the
Company's exclusive property, shall not be removed from the premises of the
Company without specific consent from the Company and shall be returned to the
Company on the termination of this Agreement, or at any earlier request of the
Company. At such time, Consultant shall also assemble all tangible items of
work-in-progress, notes, plans, and other materials related in any way to the
Services and shall promptly deliver such material to the Company.
(c) During the period beginning on the date hereof and ending
one (1) year after the termination of Consultant's engagement with the
Company, the Consultant covenants and agrees that the Consultant shall not:
(i) directly or indirectly manage, operate, control, serve as
a consultant to, be employed by, participate in, own or invest in any business
which competes with the Business of the Company (except for the passive
ownership of up to 5% of the common stock of any publicly-traded company);
(ii) hire, offer to hire, entice away or in any other manner
persuade or attempt to persuade any officer, employee or agent of the Company
to alter or discontinue his or her relationship with the Company;
(iii) directly or indirectly solicit, divert, or attempt to
solicit, circumvent or divert Xxxx Xxxx, any customers, celebrity sponsors,
participants in the Company's marketing, sales or nutritional programs or
business of the Company; or
(iv) directly or indirectly solicit, divert, or in any other
manner persuade or attempt to persuade any supplier or the Company to alter or
discontinue its relationship with the Company.
The Company and the Consultant agree that this provision does not
impose an undue hardship on the Consultant and is not injurious to the public;
that this provision is necessary to protect the valuable goodwill and the
business of the Company; that the nature of the Consultant's responsibilities
with the Company under this Agreement require the Consultant to have access to
confidential information which is valuable and confidential to the Company;
and that the scope of this Section is reasonable in terms of length of time
and geographic scope.
(d) Consultant acknowledges and agrees that the covenants
contained in this Paragraph 7 shall supplement, rather than replace, any other
rights or remedies the Company may have under applicable law for the
protection of its properties, trade secrets and Business.
(e) During the term of this Agreement and for an indefinite
period following its termination, Consultant will not directly or indirectly
make statements or take actions which tend to disparage the reputation of the
Company to third parties. During the term of this Agreement and for an
indefinite period following its termination, the executive officers of the
Company will not directly or indirectly make statements or take actions which
tend to disparage the reputation of Consultant to third parties, provided,
however, that this provision does not in any way restrict the Company from
reporting to investors and others or taking action as appropriate in the
normal course of business.
8. Proprietary Rights. All ownership, copyright, patent, trade
secrecy, works, inventions, improvements, discoveries, processes or other
properties made or conceived by Consultant during the term of this Agreement
(or within six (6) months thereafter) which relate to the Services, or which
result from any work performed by Consultant for the Company, or which make
use of the Company's services, equipment, supplies, facilities or trade
secrets (the "Rights and Properties"), shall be the rights and property solely
of the Company, whether developed independently by Consultant or jointly with
others, and whether or not the Company uses, registers, or markets the same.
Consultant hereby transfers and assigns to the Company all of the foregoing,
whether now existing or hereafter coming into existence. Consultant hereby
waives any and all "moral rights" that may be applicable to any of the
foregoing, for any and all uses, alterations, and exploitation thereof by the
Company or its successors, assigns, or licensees.
9. Certain Remedies. The harm to the Company from any breach of
Consultant's obligations under or related to Paragraphs 7 and 8 may be
difficult to determine and may be wholly or partially irreparable.
Thus, the Company may enforce such obligations by seeking an injunction as
well as by damages and other appropriate relief. Consultant further agrees
that any profits made in violation of Paragraphs 7 or 8 shall be held in
constructive trust for the Company.
10. Termination. Except as provided in Paragraph 11, this
Agreement and the rights and obligations of the parties hereunder shall
immediately terminate upon the expiration of the Term or upon written notice
of termination.
11. Survival. Notwithstanding the provisions of Paragraph 10, the
provisions of Paragraphs 7, 8, 9, 11, 12, 13, 17 and 18 shall survive the
termination of this Agreement.
12. Savings Clause. If any provision of this Agreement shall be
held invalid, illegal or unenforceable in any jurisdiction, for any reason,
including, without limitation, the duration of such provision, its
geographical scope or the extent of the activities prohibited or required by
it, then, to the full extent permitted by law (a) all other provisions hereof
shall remain in full force and effect in such jurisdiction and shall be
liberally construed in order to carry out the intent of the parties hereto as
nearly as may be possible, (b) such invalidity, illegality or unenforceability
shall not affect the validity, legality or enforceability of any other
provision hereof, and (c) any court or arbitrator having jurisdiction
thereover shall have the power to reform such provision to the extent
necessary for such provision to be enforceable under applicable law.
13. Applicable Law. ALL MATTERS RELATING TO THE INTERPRETATION,
CONSTRUCTION, VALIDITY AND ENFORCEMENT OF THIS AGREEMENT SHALL BE
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF CALIFORNIA, WITHOUT
GIVING EFFECT TO ANY CHOICE OF LAW PROVISIONS THEREOF.
14. Further Assurances. The parties shall execute and deliver such
further instruments and do such further acts and things as may be required to
carry out the intent and purpose of this Agreement.
15. Entire Agreement; Amendment. This Agreement expresses the
complete understanding of the parties with respect to the subject matter
hereof and supersedes any and all prior oral and written communications and
understandings related thereto. This Agreement may not be modified or amended
except by an instrument in writing signed by the parties hereto.
16. Assignment. The Company may assign its rights, duties, and
obligations under this Agreement and, in so doing, the assignee will assume
the rights, duties and obligations of the Company hereunder. Consultant may
not assign any of his rights, duties, or obligations hereunder without the
Company's express written consent. Consultant will not use any employees,
agents or subcontractors in Consultant's performance of the Services without
the prior written consent of the Company and, if such written consent is
given, Consultant shall require each such person to execute a written
agreement binding such person to the terms of this Agreement.
17. Attorney's Fees. In any action brought to enforce or interpret
this Agreement, the prevailing party shall be entitled to receive from the
other party reasonable attorney's fees and expenses incurred in connection
with such action or arbitration.
18. Arbitration. All disputes relating to this Agreement and the
relationships of the parties hereunder shall be settled and finally determined
by mandatory arbitration in Seattle and in accordance with the Rules of
Commercial Arbitration of the American Arbitration Association or its
successor; or, in any case where the American Arbitration Association, or its
successor, is not in existence or fails or refuses to act within a reasonably
prompt period of time (but in no event exceeding sixty (60) days) from the
date a request for arbitration is filed, the arbitration shall proceed in
accordance with the laws relating to arbitration then in effect in the State
of California as the same may be amended or superseded from time to time. The
judgment upon the award rendered in such arbitration shall be final and
binding upon the parties and may be entered in any court having jurisdiction
thereof.
19. Notices. All notices required or permitted hereunder shall be
given in writing and delivered in person, transmitted by facsimile, or sent by
registered or certified mail, postage prepaid, or by reliable courier service
to the parties at the respective addresses stated below, or to such other
address as a party may subsequently specify. Notices will be effective upon
the earlier of receipt or the second business day after sending.
20. Representation. All parties acknowledge that the firm of
Xxxxxx & Whitney LLP is representing the Company and not the Consultant. By
their signatures hereto, the parties each consent to any conflict of interest
that this may pose and acknowledge that Consultant has been advised to seek
separate legal counsel regarding this Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as
of this 6th day of November, 2001.
CONSULTANT: Xxxxxxx Xxxxx COMPANY: Network Lifestyle Radio Corp.
/s/ Xxxxxxx Xxxxx By: /s/ Xxxxx Xxxxx
----------------- ---------------
Xxxxx Xxxxx, President & CEO
Address:
Address: 0000 Xxxxxxxx Xxxxxx
Xxxx Xxxxxxxxx, XX
___________________ X0X 0X0
Tel: 000-000-0000
Phone: ___________________ Fax: 000-000-0000
