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EXHIBIT 10.7
CONSULTING AGREEMENT
CONSULTING AGREEMENT dated as of October 1, 1998, by and between
INTERNATIONAL BARTER CORP., a Nevada corporation, with its principal place of
business at 00000 Xxxxxxxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxxxx, 00000
(hereinafter together with all of its affiliates referred to collectively as the
"Company"), and Liad Meidar, residing at 00 Xxxx 00xx Xxxxxx, Xxx. 00X, Xxx
Xxxx, Xxx Xxxx 00000 (hereinafter referred to as the "Consultant").
WHEREAS, the Company wishes to retain the Consultant and the Consultant
wishes to become a consultant to the Company, on the terms and conditions set
forth herein; and
WHEREAS the execution of this Agreement, has been approved by the Board
of Directors of the Company;
NOW THEREFORE, the parties hereto agree as follows:
1. Term. The Company hereby retains the Consultant, and the Consultant
hereby accepts such retainer, for an initial term commencing as of the date
hereof and ending on the second anniversary of such date, unless sooner
terminated in accordance with the provisions of Section 4 or Section 5 (the
"Initial Term"); with such retainer to continue in accordance with the terms of
this Agreement from year to year thereafter (subject to termination as
aforesaid) unless written notice of non-renewal is given to Consultant prior to
ninety (90) days before the expiration of the Initial Term or any continuation
term (said Initial Term and any continuation thereof being hereinafter referred
to as the "Term").
2. Services. The Consultant agrees to perform for the Company the
following services:
(a) to provide general consulting services to the Company in connection
with, and in furtherance of, the development and expansion of the Company's
business and the development of new business ventures;
(b) to participate in efforts to raise capital for the Company;
(c) to assist in developing a business plan for the Company and advise
the Company with respect to its capital structure;
(d) to seek potential acquisition and investment opportunities for the
Company ("Target Companies");
(e) to perform a financial and strategic review of the Company and to
assist the Company in formulating its future strategy;
(f) to assist the Company in the performance of due diligence and to
advise the Company with respect to the pricing, financing, form structure and
negotiation of a Transaction (as hereinafter defined) involving a Target
Company.
(g) to provide general consulting services on such matters as may be
requested by the Board of Directors of the Company.
The Consultant agrees to devote at least fifteen hundred (1,500) hours
per twelve month period of the Term (a "Year") to the performance of his
services hereunder.
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3. Compensation.
3.1 Retainer. The Company shall pay the Consultant during the Term a
retainer (the "Annual Retainer"), of $80,000 per annum, payable in four equal
annual installments commencing on October 1, 1998 and the first business day of
each three month period next following October 1, 1998.
3.2 Additional Remuneration. (a) In the event that (i) any Transaction
is consummated during the Term or at any time within one year after the Term or
(ii) any agreement is entered into during the Term or during such one-year
period which subsequently results in a consummated Transaction, then, upon the
closing of each and every such Transaction, an additional fee (the "Transaction
Fee") shall be payable to the Consultant in an amount equal to 3.0% of the
Consideration (as hereinafter defined) paid in such Transaction. Such
Transaction Fee shall be payable 50% in cash and 50% in duly authorized, fully
paid and non-assessable shares of common stock ("Common Stock") $.001 par value
per share or any other equivalent voting common stock issued by the Company in
lieu of the Common Stock. The number of shares of Common Stock issuable to the
Consultant with respect to any consummated Transaction shall be determined by a
fraction the numerator of which shall be the dollar amount attributable to the
Common Stock portion of the Transaction Fee and the denominator of which shall
be the Fair Market Value (as hereinafter defined) of one share of Common Stock,
calculated in accordance with paragraph (C) of this section with respect to the
calculation of Fair Market Value for non-cash consideration.
(b) Subject to the immediately succeeding paragraph, "Consideration"
means the total proceeds and other consideration paid and to be paid or
contributed and to be contributed, directly or indirectly, in connection with a
Transaction (which consideration shall be deemed to include amounts paid or to
be paid into escrow) by the Company including, without limitation: (1) cash;
(ii) notes, securities and other property (including all options, warrants or
other instruments or arrangements convertible into or exercisable for any of the
foregoing) at the Fair Market Value thereof; (iii) all interest bearing
liabilities of any Target Company not specifically excluded from the Transaction
by agreement of the Company and of any Target Company; (iv) payments to be made
in installments; (v) amounts paid or payable under consulting, supply, service,
distribution, licensing agreements, equipment or real property lease agreements,
agreements not to compete or similar arrangements.
(c) The Fair Market Value of non-cash consideration consisting of
securities issued by the Company (including any notes, options, warrants or
other instruments or arrangements convertible into, or exercisable for, any of
the foregoing) shall be determined based upon (A) the 20 trading day average
closing sale price for such securities on the registered national securities
exchange, NASDAQ or other securities market providing the primary market for
such securities, (the "Determination Period"), (B) if such securities are not so
traded on any day during the Determination Period, the price of such securities
with respect to such day shall be the mean between the high closing bid and low
closing asked prices as reported by the primary market for the securities
calculated in the same manner as above, or (C) if such securities are not so
traded or reported, Fair Market Value shall be determined by agreement between
the Company and Consultant. In each case, the Determination Period shall end on
the day next preceding the closing of the relevant Transaction. The Fair Market
Value of (i) any non-cash Consideration other than securities and (ii) any
Consideration consisting of a contingent payment shall in each case be
determined by agreement of the Company and Consultant. If all or any portion of
Consideration is to be paid over time, then that portion of the Transaction Fee
attributable thereto shall be payable as and when such payments are made. No fee
payable to any other financial adviser either by the Company or any other entity
shall reduce or otherwise affect the fees payable hereunder to the Consultant.
(d) For purposes of this Agreement, the term "Transaction" shall mean,
whether in one or a series of transactions, (i) any merger, consolidation,
reorganization, recapitalization, leveraged buy-out, restructuring or other
business combination involving any one or more Target Companies, (ii) the
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acquisition, directly or indirectly, through public or private purchases or
otherwise of all or any portion of securities, assets, liabilities, properties
and/or business of any one or more Target Companies, (iii) the formation of a
joint venture or partnership for the purpose of combining all or any portion of
the securities, assets, liabilities, properties and/or businesses of Company and
any Target Company, (iv) any management, consulting, supply, service,
distribution, licensing or similar arrangement involving the Company and any one
or more of the Target Companies entered into in relation to a Transaction; and
(v) in the case of any financing provided to the Company, all financing of any
kind received by or on behalf of the Company, from any financial source
including cash or other consideration and the present value of any future
commitments, received by the Company.
3.3 Independent Contractor Status. The Consultant acknowledges and
agrees that, during the Term, the relationship between the Consultant and the
Company is that of an independent contractor and, accordingly, the Consultant
shall not be permitted to participate in any group life, hospitalization or
disability insurance plans, health programs, pension plans or similar benefits
(collectively, "Benefits Programs") that may be available to employees of the
Company generally unless Consultant pays the costs incurred for his share of
such Benefit Programs; provided, however, the Consultant shall participate in
the Company's 1998 Stock Option Plan and any other option plans sponsored by the
Company. Nothing in this Agreement shall be construed as establishing the place
and time of performance of Consultant's services.
3.4 Expenses. The Company shall pay or reimburse the Consultant for all
reasonable out-of-pocket expenses actually incurred or paid by the Consultant
during the Term in the performance of the Consultant's services under this
Agreement; provided, however, Consultant shall bear the rental costs of his
office.
4. Termination Upon Death or Disability. If the Consultant dies during the Term,
this Agreement shall terminate as of the date of the Consultant's death. If the
Consultant by virtue of ill health or other disability is unable to perform one
thousand (1000) hours of service per year for any consecutive twelve month
period the Company shall have the right to terminate this Agreement upon notice
in writing to the Consultant. Upon such termination, the Consultant shall be
entitled to receive any retainer amounts and other benefits earned and accrued
prior to the date of termination and reimbursement for expenses incurred prior
to the date of termination. No provision of this Agreement shall limit any of
Consultant's rights under any Benefits Programs of the Company in which the
Consultant has participated in accordance with Section 3.3 for which the
Consultant shall be eligible at the time of such death or disability.
5. Termination for Cause. If the Consultant (i) is convicted of a felony or any
crime involving the Company (other than pursuant to actions taken at the
direction or with the approval of the Company's Board of Directors), (ii) is
found by determination of the Board of Directors of the Company to have engaged
in (A) fraud, (B) misappropriation or (C) embezzlement in the performance of his
services hereunder, the Company may, at any time within 30 days of the
occurrence of any of the events described in clauses (i), (ii) and (iii) above,
by written notice to the Consultant, terminate this Agreement. The Consultant
shall have no right to receive any compensation or benefit hereunder on and
after the effective date of the notice provided in the preceding sentence other
than salary and other benefits earned and accrued prior to the date of
termination and reimbursement for expenses incurred prior to the date of
termination.
5.1 Stock Options. Consultant shall have the right to participate in the
Company's 1998 Stock Option Plan (the "Plan"). The Company shall issue options
to Consultant as set forth in accordance with
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Exhibit A hereto. The shares of Common Stock subject to such options will
represent the percentage of shares of common stock outstanding on a fully
diluted basis as set forth in Exhibit A.
6. Confidentiality.
(a) During the Restricted Period and thereafter, the
Consultant shall keep secret and retain in strictest confidence, and shall not
use for his benefit or the benefit of others, except in connection with the
business and affairs of the Company, all confidential matters relating to the
Company and its business learned by the Consultant heretofore or hereafter
directly or indirectly from the Company including any information concerning the
business, affairs, customers, clients, sources of supply and customer lists of
the Company (the "Confidential Company Information") and shall not disclose them
to anyone except with the Company's express written consent and except for
Confidential Company Information which (1) is at the time of receipt publicly
known, or thereafter becomes publicly known, through no wrongful act of the
Consultant or (2) is received from a third party not under an obligation to keep
such information confidential and without breach of this Agreement. These rights
of the Company are in addition to and without limitation to those rights and
remedies available under common law for protection of the types of such
confidential information which constitute "trade secrets" as construed under
controlling law.
(b) During the Restricted Period, the Consultant shall not,
without the Company's prior written consent, directly or indirectly, knowingly
solicit or encourage to leave the employment of the Company, any employee of the
Company or hire any employee who has left the employment of the Company within
one year of the termination of such employee's employment with the Company.
(c) All memoranda, notes, lists, records and other documents
(and all copies thereof) constituting Confidential Company Information made or
compiled by the Consultant or made available to the Consultant concerning the
Company shall be the Company's property, shall be kept confidential in
accordance with the provisions of this Section 6.1 and shall be delivered to the
Company at any time on request.
7. Other Provisions.
7.1 Notices. Any notice or other communication required or permitted
hereunder shall be in writing and shall be delivered personally, telegraphed,
telexed, sent by facsimile transmission or sent by certified, registered or
express mail, postage prepaid. Any such notice shall be deemed given when so
delivered personally, telegraphed, telexed or sent by facsimile transmission or,
if mailed, five days after the date of deposit in the United States mails as
follows:
(i) If to the Company, to:
International Barter Corp.
00000 Xxxxxxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000
with a copy to:
Xxxxxx X. Xxxxx, Chairman, Chief Executive Officer
and President
c/o International Barter Corp.
00000 Xxxxxxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000
(ii) If to the Consultant, to:
Liad Meidar
with a copy to:
Xxxxxx & Xxxxx, LLP
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000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
ATTN: Xxxxxx X. Xxxxx, Esq.
Any such person may by notice given in accordance with this Section to the other
parties hereto designate another address or person for receipt by such person of
notices hereunder.
7.2 Entire Agreement. This Agreement contains the entire agreement between the
parties with respect to the subject matter hereof and supersedes all prior
agreements, written or oral, with respect thereto.
7.3 Waivers and Amendments. This Agreement may be amended, superseded,
cancelled, renewed or extended, and the terms hereof may be waived, only by a
written instrument signed by the parties or, in the case of a waiver, by the
party waiving compliance. No delay on the part of any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof, nor shall
any waiver on the part of any party of any such right, power or privilege nor
any single or partial exercise of any such right, power or privilege, preclude
any other or further exercise thereof or the exercise of any other such right,
power or privilege.
7.4 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Washington applicable to agreements
made and to be performed entirely within such State.
7.5 Assignment. This Agreement, and the Consultant's rights and obligations
hereunder, may be assigned by the Consultant to any corporation majority owned
by the Consultant provided that the Consultant remains solely responsible for
the performance of all of the services and compliance with all of the provisions
of this Agreement. Any assignment of this Agreement by Consultant in violation
of the terms hereof shall be null and void. In the event of any sale, transfer
or other disposition of all or substantially all of the Company's assets or
business, whether by merger, consolidation or otherwise, the Company may assign
this Agreement and its rights hereunder.
7.6 Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors, permitted assigns,
heirs, executors and legal representatives.
7.7 Counterparts. This Agreement may be executed by the parties hereto in
separate counterparts, each of which when so executed and delivered shall be an
original but all such counterparts together shall constitute one and the same
instrument. Each counterpart may consist of two copies hereof each signed by one
of the parties hereto.
7.8 Headings. The headings in this Agreement are for reference only and shall
not affect the interpretation of this Agreement.
7.9 Indemnification. The Company agrees to indemnify the Consultant and its
affiliates and their respective directors, officers, employees, agents and
controlling persons (the Consultant and each such person being an "Indemnified
Party") from and against any and all losses, claims, damages and liabilities,
joint or several, (collectively "Losses") to which such Indemnified Party may
become subject under any applicable federal or state law, or otherwise, and
related to or arising out of any Transaction contemplated by this Agreement or
the engagement of Consultant pursuant to and the performance by Consultant of
the services contemplated by, this Agreement and will reimburse any Indemnified
Party for all reasonable expenses (including reasonable counsel fees and
expenses) as they are incurred in
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connection with the investigation of, preparation for or defense of any pending
or threatened claim or any action or proceeding arising therefrom, whether or
not such Indemnified Party is a party and whether or not such claim, action or
proceeding is initiated or brought by or on behalf of the Company. The Company
will not be liable under the foregoing indemnification provision to the extent
that any loss, claim damage, liability or expense is found in a final judgment
by a court to have resulted from the Consultant's bad faith or gross negligence.
The Company also agrees that no Indemnified Party shall have any liability
(whether direct or indirect, in contract or tort or otherwise) to the Company or
its security holders or creditors related to or arising out of the engagement of
the Consultant pursuant to, or the performance by the Consultant of the services
contemplated by, this Agreement except to the extent that any loss, claim,
damage or liability is found in a final judgment by a court to have resulted
from the Consultant's bad faith or gross negligence.
If the indemnification of an Indemnified Party provided for in this
letter agreement is for any reason held unenforceable, the Company agrees to
contribute to the losses, claims, damages and liabilities for which such
indemnification is held unenforceable (i) in such proportion as is appropriate
to reflect the relative benefits to the Company, on the one hand, and the
Consultant, on the other hand, of the Transaction as contemplated (whether or
not the Transaction is consummated) or (ii) if (but only if) the allocation
provided for in clause (i) is for any reason held unenforceable, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) but also the relative fault of the Company, on the one hand,
and the Consultant, on the other hand, as well as any other relevant equitable
considerations; provided, however, that to the extent permitted by applicable
law, in no event shall the Indemnified Parties be required to contribute an
aggregate amount in excess of the aggregate fees actually paid to the Consultant
under this Agreement.
The Company agrees that, without Consultant's prior written consent, it
will not settle, compromise or consent to the entry of any judgment in any
pending or threatened claim, action or proceeding in respect of which
indemnification could be sought under the indemnification provision of this
Agreement (whether or not the Consultant or any other Indemnified Party is an
actual or potential party to such claim, action or proceeding), unless such
settlement, compromise or consent includes an unconditional release of each
Indemnified Party from all liability arising out of such claim, action or
proceeding.
In the event that an Indemnified Party is requested or required to
appear as a witness in any action brought by or on behalf of or against the
Company in which such Indemnified Party is not named as a defendant the Company
agrees to reimburse Consultant for all reasonable out-of-pocket expenses
incurred by it in connection with such Indemnified Party's appearing and
preparing to appear as such a witness, including, without limitation, the fees
and disbursements of its legal counsel.
IN WITNESS WHEREOF, the parties hereto have signed their names as of the day and
year first above written.
/s/ Liad Meidar
Liad Meidar
INTERNATIONAL BARTER CORP.
By /s/ Xxxxxx Xxxxx
Xxxxxx X. Xxxxx, Chairman,
Chief Executive Officer & President
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Exhibit A - Meidar Options
Percentage Shares
Outstanding based on
6,050,000 shares of
Strike Price Options Common Stock outstanding
------------ ------- ------------------------
$ 4.00 10,000 0.17%
$ 6.00 20,000 0.33%
$ 8.00 40,000 0.66%
$ 10.00 80,000 1.32%
$ 12.00 160,000 2.64%
$ 14.00 320,000 5.29%
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