CONSULTING AGREEMENT
This Consulting Agreement (this "Agreement") is made as of October 1,
1999 by NET VALUE HOLDINGS, INC., a Delaware corporation (the "Company"), and
XXXX X. XXXXXXX (the "Advisor").
BACKGROUND
WHEREAS, the Board of Directors of the Company (the "Board") has
determined that it is advisable and in the best interest of the Company to enter
into a consulting agreement with the Advisor pursuant to which he will serve on
the Company's Board of Advisors, assist the Company in locating strategic
investors, assist the Company in locating potential partner companies and
perform such other services as the Board, the Chief Executive Officer or the
President of the Company may direct;
WHEREAS, simultaneously with the execution and delivery of this
Agreement, the Company has sold shares of the Company's common stock, $.001 par
value per share ("Common Stock"), to the RS Orphan Fund, L.P. and the RS Orphan
Offshore Fund, L.P. (collectively the "Purchasers") pursuant to a Common Stock
Purchase Agreement dated the date hereof between the Company and the Purchasers,
the Advisor is the managing director of the Purchasers and the execution and
delivery of this Agreement is a condition precedent to the obligations of the
parties to such Common Stock Purchase Agreement;
WHEREAS, the Advisor desires to provide such services to the Company;
NOW THEREFORE, in consideration of the facts, mutual promises and
covenants contained herein and intending to be legally bound hereby, the Company
and the Advisor agree as follows:
1. ENGAGEMENT AND DUTIES.
(a) The Company hereby appoints the Advisor as an advisor to
the Company and as a member of the Company's Board of Advisors, whereby the
Advisor shall, from time to time, to the extent reasonably requested by the
Company, provide those management and financial advisory services to the Company
which are set forth in Section 1(b) hereof. The Advisor hereby accepts such
appointment and agrees to provide each of the services required to be provided
by him under this Agreement and to make himself available from time-to-time, on
a part-time basis, to consult with the management and Board of Directors to the
Company in connection with such services.
(b) Upon the reasonable request of the Board, the Chief
Executive Officer or the President of the Company, the Advisor hereby agrees to
provide the following services to the Company:
(i) review periodically the business, operations,
financial condition and prospects of the Company, its subsidiaries and any
entities in which the Company has made investments (each a "Portfolio Company");
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(ii) assist the Company in the planning, structuring
and negotiation of each potential acquisition by the Company of, or any
investment by the Company in, another business operating within the Company's
industry or any related industry including, without limitation, any Portfolio
Company;
(iii) assist the Company in seeking out and
negotiating with potential financing sources in connection with the financing of
any transaction referred to in clause (ii) above; and
(iv) provide to the Company such other management
and financial advisory services as may be reasonably requested by the Board, the
Chief Executive Officer or the President of the Company.
2. NATURE OF RELATIONSHIP. Notwithstanding the services provided by the
Advisor, the Advisor shall be deemed to be an independent contractor and, unless
otherwise expressly authorized by the Company's Board of Directors, shall not be
authorized to manage the affairs of, act in the name of, or bind the Company.
The Company shall not be obligated to follow or accept any advice or
recommendation made by the Advisor, and the management, policies and operations
of the Company shall be the sole responsibility of the Board of Directors and
the management of the Company. The obligations of the Advisor to the Company are
not exclusive, and the Advisor may, in his sole discretion, render the same or
similar services to any other person or entity. Nothing set forth in this
Agreement shall be deemed to prohibit the Advisor from serving any other person
or entity in any capacity the Advisor may deem appropriate or from conducting
his business and affairs in any manner he may elect, whether or not such
activities might involve an actual or potential conflict of interest vis-a-vis
the Company or any of its subsidiaries.
3. TERM. Subject to the termination provisions of Section 6 hereof, the
initial term of this Agreement shall commence on the date hereof and continue
for a period of three (3) years following the date hereof.
4. COMPENSATION AND EXPENSES.
(a) No additional compensation shall be paid to the Advisor by the
Company in consideration of his services hereunder. The Company shall pay or
reimburse the Advisor for all Expenses (as defined below) in accordance with
Section 4(b) below.
(b) The term "Expenses" shall mean all fees, costs and expenses
reasonably incurred by the Advisor in connection with his provision of services
hereunder, including, without limitation: (i) all travel and other out-of-pocket
costs and expenses incurred by the Advisor in connection herewith, and (ii) all
losses that are the subject of indemnification pursuant to this Agreement. The
Company shall reimburse the Advisor promptly for all Expenses upon the Advisor's
presentation of invoices or other documents reasonably evidencing such Expenses.
5. INDEMNIFICATION, ETC. The Company shall, to the full extent
permitted by Section 146 of the Delaware General Corporation Law, as amended,
and in accordance with Article VII of the By-laws of the Company indemnify the
Advisor to the same extent as if he were an officer of the Company. The Company
agrees that it shall not amend its By-laws in any manner
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that will materially adversely affect the Advisor's rights to indemnification
thereunder. This is not intended to alter the nature of the Advisor's
relationship to the Company described in Section 2 hereof.
6. TERMINATION. Notwithstanding anything to the contrary contained in
this Agreement, this Agreement may be terminated by either the Advisor or the
Company upon at least one (1) month prior written notice to the other party.
7. NOTICES. Any notice, request, demand, waiver, consent, approval or
other communication which is required or permitted hereunder shall be in writing
and shall be deemed given only if delivered personally to the address set forth
below (to the attention of the person identified below) or sent by telefax,
telegram or by registered or certified mail, postage prepaid, return receipt
requested as follows:
If to Company: Net Value Holdings, Inc.
Xxx Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
With a copy to: Klehr, Harrison, Xxxxxx, Xxxxxxxxx & Xxxxxx
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx
Facsimile No.: (000) 000-0000
If to Advisor: Xxxx X. Xxxxxxx
RS Investment Management
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
or to such other address as the addressee may have specified in a notice duly
given to the sender and to counsel as provided herein. Any notice, request,
demand, waiver, consent, approval or other communication given (a) personally
shall be effective when delivered, (b) by mail or telegram shall be effective
when receive and (c) by telecopy shall be effective when the appropriate
telecopy answer back or confirmation is received.
8. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
among the parties with respect to the subject matter hereof. It supersedes any
prior agreement or understanding among them, and it may not be modified or
amended in any manner other than by an instrument in writing signed by both
parties hereto, or their respective successors or assigns, or otherwise as
provided herein.
9. CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED
AND ENFORCED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE COMMONWEALTH OF
PENNSYLVANIA, WITHOUT GIVING EFFECT TO THE CHOICE OF LAW PRINCIPLES THEREOF.
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10. SUCCESSORS AND ASSIGNS. Except as herein otherwise specifically
provided, this Agreement shall be binding upon and inure to the benefit of the
parties and their legal representatives, heirs, administrators, executors,
successors and assigns.
11. CAPTIONS. Captions contained in this Agreement are inserted only as
a matter of convenience and in no way define, limit or extend the scope or
intent of this Agreement or any provision hereof.
12. SEVERABILITY. If any provision of this Agreement, or the
application of such provision to any person or circumstance, shall be held
invalid, the remainder of this Agreement, or the application of such provision
to persons or circumstances other than those to which it is held invalid, shall
not be affected thereby.
13. WAIVERS. No provision of this Agreement shall be deemed to have
been waived unless such waiver is contained in a written notice given to the
party claiming such waiver, and no such waiver shall be deemed to be a waiver of
any other or further obligation or liability of the party or parties in whose
favor the waiver was given.
14. COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall constitute one and the same instrument. This Agreement may be
executed by facsimile signatures, each of which shall be deemed an original copy
of this Agreement.
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IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first written above.
COMPANY:
NET VALUE HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
Chief Executive Officer
and President
ADVISOR:
/s/ Xxxx X. Xxxxxxxx
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Xxxx X. Xxxxxxxx, individually
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