CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (this "Agreement") is made as of the 23rd day
of August, 2001 (the "Effective Date") between TTI HOLDINGS OF AMERICA, INC., a
Delaware corporation with its principal address at 00 Xxxxx Xxxxxxxx,
Xxxxxxxxxx, XX 00000 (together with its subsidiaries and affiliates the
"Company") and CROSSOVER ADVISORS, LLC, a New York limited liability company
with its principal address at 000 Xxxxxxx Xxxxxx - 0xx Xxxxx, Xxx Xxxx, XX 00000
(the "Consultant").
Background
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The Company and the Consultant wish to have the Consultant provide
financial, strategic and marketing advisory services to the Company, on the
terms and conditions set forth in this Agreement.
Accordingly, the parties intending to be legally bound agree as
follows:
1. Appointment. The Company hereby engages the Consultant to provide the
consulting services as described in Section 2.1 below (the "Services")
during the Term and any Renewal Term (defined in Section 3.1 below), and
the Consultant accepts the engagement.
2. Services.
2.1 During the Term and any Renewal Term, the Consultant will, upon
request, provide to the Company the Services on an "as needed"
basis, including, but not limited to, those described below.
(a) assisting management in refining its business plan;
(b) assisting management in connection with identifying and
evaluating potential investments, acquisitions, strategic
partnerships, joint ventures and/or licensing opportunities for
the Company and its products and services (each a "Strategic
Transaction");
(c) disseminating information about the Company to the investment
community at large;
(d) arranging on behalf of the Company, at appropriate times,
introductions and/or meetings with broker/dealers, investment
firms and securities analysts, among others;
(e) assisting management in broadening the Company's financial and
investor public relations; and
(f) providing such other related consulting services as mutually
agreed to by the Company and the Consultant.
2.2 Staffing. The Consultant will maintain in its employ, or
otherwise have available to it, personnel sufficient in number
and adequate in ability to perform the Services in accordance
with this Agreement. The Consultant will have the exclusive right
to direct and control its personnel and/or third parties
providing the Services, other than in respect of the Company's
right, as the recipient of the Services, to supervise the
performance of the Consultant under this Agreement.
2.3 Non-Exclusivity. The Company expressly understands and agrees
that the relationship with the Consultant is on a non-exclusive
independent contractor basis for the Services and that the
Consultant shall not be prevented, barred or limited from
rendering consulting services of the same nature or of a similar
nature to those described in this Agreement, or of any nature
whatsoever, for or on behalf of any person, firm, corporation, or
entity other than the Company during the Term and any Renewal
Term
2.4 Place of Performance. In connection with the Services performed
by the Consultant, the Consultant's activities shall be
principally based in its New York City office, except for
required and approved travel on the Company's behalf.
3. Term and Termination.
3.1 Term. Unless terminated earlier under Section 3.2 below, the term
of this Agreement will be eighteen (18) months (the "Term")
commencing on the Effective Date. The Term will automatically
renew for an additional twelve (12) month period (the "Renewal
Term") unless at least thirty (30) days prior to the end of the
Term either party provides written notice to the other party that
it does not intend to renew.
3.2 Termination.
(a) This Agreement may be terminated prior to the expiration of the
Term or any Renewal Term by (i) either party if a material breach
to this Agreement by the other party is not effectively cured
within 10 days (the "Cure Period") from receipt of written notice
of the breach from the non-breaching party or (ii) by the
Consultant if the Registration Statement (as described in Section
4.1 (b) below) is not declared effective by the Securities and
Exchange Comission (SEC) within ninety (90) days of the Effective
Date.
(b) The date of termination (the "Termination Date") shall be defined
to mean; (i) with regard to Section 3.2 (a) (i), the date upon
which the Cure Period expires and there has been no cure, or with
regard to Section 3.2 (a) (ii), the ninetieth day as referred to
therein and (ii) with regard to Section 3.1, the last day of the
Term, or any Renewal Term.
3.3 Effect of Termination.
(a) Termination under Section 3.2 will not affect any other remedy or
damages available to either of the parties. Upon termination of
this Agreement, no party will have any further obligation to
fulfill commitments under this Agreement, except for those
obligations set forth in this Section 3 and in Sections 4,6, 7, 8
and 9, each of which expressly survive the termination of this
Agreement.
(b) On the Termination Date, the Company shall pay to the Consultant
any earned but unpaid Consulting Fees (defined below), any
unreimbursed expenses up through the appropriate date, and shall
issue and deliver securities due and issuable in accordance with
Section 4.1 below.
4. Compensation
4.1 Sign-On Fee. On the Effective Date, as compensation for engaging
the Consultant and as an inducement for the Consultant to commit
its resources to the Company, the Company shall issue and deliver
to the Consultant, or its authorized designee, on a
non-refundable basis, a total of 440,000 shares of the Company's
common stock $.0001 par value, of which:
a) 100,000 shares shall be free trading and unrestricted as of the
Effective Date; and
b) 340,000 shares shall bear a restrictive legend and have immediate
registration rights and shall be included on a registration
statement (Form SB-2 or otherwise) filed by the Company with the
SEC (the "Registration Statement") no later than thirty (30) days
following the Effective Date, the cost and expense of which will
be borne by the Company.
4.2 Monthly Fee. During the Term and any Renewal Term, as
compensation for the Services provided in Section 2 hereof (in
addition to any fees that may be earned for a Strategic
Transaction as set forth in Section 5 below), the Consultant
shall be paid a fee of $10,000 per month (the "Consulting Fee"),
payable in advance on the first business day of each month. It is
agreed to that the Consulting Fee shall not be payable until the
earlier to occur of (i) ninety (90) days following the Effective
Date or (ii) the date the Registration Statement is declared
effective.
4.3 Expenses. The Consultant shall be promptly reimbursed for all
reasonable out-of-pocket expenses (including travel,
entertainment, etc.) incurred by it in its performance under this
Agreement, upon submission of documentation supporting such
expense(s).
5. Strategic Transaction Services
The Consultant, or an affiliate, may provide the Company, if so requested, with
finder services which may include the identification and introduction to the
Company of parties that would be interested in completing a Strategic
Transaction with the Company. Accordingly, if the Consultant introduces the
Company (or any of its subsidiaries or affiliates) to a party that, during the
Term, any Renewal Term or during the one (1) year period following the
Termination Date, completes, or enters into a letter of intent to complete, a
Strategic Transaction (as set forth below) in which;
i. the introduced party makes an investment in, or
provides financing to, the Company through the purchase
of its securities; and/or
ii. the introduced party enters into a partnership, joint
venture, or licensing agreement or any other agreement
for the mutual exploitation of any asset of the
Company; and/or
iii. the Company either invests in, merges with or acquires
the introduced party, or, the introduced party merges
with or acquires the Company.
The Company will pay to the Consultant, or an affiliate, an investment banking
fee (which shall include a cash and Warrant component) with respect to each and
every transaction undertaken by the Company with each party during such time
period, that will be mutually agreed to prior to such introduction and which
will reflect a customary industry fee arrangement.
6. Indemnification.
6.1 Indemnification by the Company. If in connection with any
services or matters that are the subject of arise out of this
Agreement or the Consultant's engagement hereunder, the
Consultant or any of its directors, officers, stockholders,
employees of agents (collectively, the "Consultant Indemnitees")
becomes involved (whether or not as a named party) in any action,
claim, investigation or legal proceeding, the Company, will
indemnify and save harmless such Consultant Indemnitees from and
against any and all claims, liabilities, damages, losses, costs
and expenses (including amounts paid in satisfaction of judgments
in compromises and defending against any claims or alleged
claims) of any nature whatsoever, liquidated or unliquidated,
that are incurred by any Consultant Indemnitees' obligations
under this Agreement unless the claim or alleged claim resulted
from willful misconduct, negligence or fraud of the Consultant
Indemnitees. The Company agrees that, without the Consultant
Indemnitees'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 this Section 6 (whether or
not the Consultant Indemnitees are actual or potential parties to
such claim, action or proceeding), unless such settlement,
compromise or consent includes an unconditional release of each
Consultant Indemnitee from all liability arising out of such
claim, action or proceeding.
6.2 Indemnification by the Consultant. If in connection with any
services or matters that are the subject of arise out of this
Agreement or the Consultant's engagement hereunder, the Company
or any of its directors, officers, stockholders, employees of
agents (collectively, the "Company Indemnitees") becomes involved
(whether or not as a named party) in any action, claim,
investigation or legal proceeding, the Consultant, will indemnify
and save harmless such Company Indemnitees from and against any
and all claims, liabilities, damages, losses, costs and expenses
(including amounts paid in satisfaction of judgments in
compromises and defending against any claims or alleged claims)
of any nature whatsoever, liquidated or unliquidated, that are
incurred by any Company Indemnitees' obligations under this
Agreement unless the claim or alleged claim resulted from willful
misconduct, negligence or fraud of the Company Indemnitees. The
Consultant agrees that, without the Company Indemnitees' 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 this Section 6 (whether or not the Company Indemnitees are
actual or potential parties to such claim, action or proceeding),
unless such settlement, compromise or consent includes an
unconditional release of each Company Indemnitee from all
liability arising out of such claim, action or proceeding.
6.3 Procedures. As to any claim or lawsuit with respect to which
party seeks indemnification hereunder (the "Indemnified Party"),
it shall provide prompt notice thereof to the other party (the
"Indemnifying Party"), and the Indemnifying Party shall have the
right to control the defense of said lawsuit, including the
selection of attorneys, and any settlement thereof, provided that
no settlement which impairs the rights of the Indemnified Party
shall be made without its prior written consent, which consent
shall not be unreasonably withheld.
7. Binding Arbitration.
a) Any dispute not settled through mediation will be settled by
binding expedited arbitration in accordance with the commercial
Arbitration Rules of the American Arbitration Association (the
"AAA Arbitration Rules") in effect from time to time. Where no
remedy for a particular breach is specified in this Agreement,
the arbitrator, subject to any limitations set forth in the
applicable agreement, will have the power to fashion an
appropriate remedy consistent with the spirit and intent of this
Agreement. Any disputing party may serve the other disputing
party or parties with a demand to commence binding arbitration
("Arbitration Demand"). The arbitrator will be selected by mutual
agreement of the disputing parties. If the disputing parties are
unable to agree upon an arbitrator within 20 days after the date
on which the Arbitration Demand is served, then the Arbitrator
will be selected in accordance with the AAA Arbitration Rules.
b) The arbitration will be held in New York County and begoverned by
the laws of the State of New York, and judgment upon the award
rendered by the arbitrator may be entered by any court having
jurisdiction thereof. The disputing parties will cooperate fully
to ensure the entry of the arbitrator's award by a court of
competent jurisdiction. Once the arbitrator's award has been
entered by a court of competent jurisdiction, the arbitrator's
award will have res judicata and collateral estoppel effect, and
the disputing parties will not seek or assert the right in any
manner whatsoever to challenge the validity of the arbitration or
relitigate issues adjudicated by the arbitrator.
8. Covenants.
8.1 Confidentiality. With respect to information of the Company,
which is clearly marked "Confidential", whatever its nature and
form and whether from Graphic Materials (as defined below) or
otherwise (except such as is generally available through
publication or is previously known to the Consultant, or is
lawfully obtained by the Consultant through a third-party),
obtained by the Consultant during or as a result of its
consultancy with the Company and relating to any invention,
improvement, enhancement, product, know-how, formula, software,
process, design, or other creation, or to any use of any of them,
costs (including, without limitation, manufacturing costs),
prices, or to any plans of the Company, or to any other trade
secret or proprietary information of the Company, the Consultant
agrees:
a) to hold all such information, inventions and discoveries which
have not otherwise become public knowledge in strict confidence
and not to publish or otherwise disclose any thereof to any
person or entity other than the Company except with the prior
written consent of an officer of the Company, or as may be
required by law.
b) to take all reasonable precautions to assure that all such
information, inventions and discoveries are properly protected
from access by unauthorized persons.
c) to make no use of nor exploit in any way any such information,
invention or discovery except as required in the performance of
its consultancy for the Company.
For the purposes of this Agreement, the term "Graphic Materials" includes,
without limitation, letters, memoranda, reports, notes, notebooks, books of
account, drawings, prints, specifications, formulae, software, data print-outs,
microfilms, magnetic tapes and disks and other documents and recordings,
together with all copies, excerpts and summaries thereof.
8.2 Further Assurances. The Company and Consultant will use their
best efforts to implement the provisions of this Agreement, and
for such purpose neither party shall represent to the other any
material facts concerning itself during the Term and any Renewal
Term which are false, misleading or untrue and neither party
shall intentionally fail to provide the other with material facts
concerning itself or will in any material manner prevent the
Services from being performed under this Agreement.
9. Miscellaneous.
9.1 Limitation of Liability. IT IS UNDERSTOOD BETWEEN THE PARTIES
THAT NEITHER THE CONSULTANT NOR ANY OF ITS PARTNERS, EMPLOYEES,
AGENTS, OR PRINCIPALS ARE PROVIDING LEGAL SERVICES, ACCOUNTING
SERVICES, NOR BROKERAGE SERVICES, AND SUCH SERVICES MUST BE
RETAINED BY THE COMPANY AT ITS OWN COST AND EXPENSE. IT IS
EXPRESSLY ACKNOWLEDGED THAT THE CONSULTANT WILL UTILIZE ITS BEST
EFFORTS IN PERFORMING THE SERVICES CONTEMPLATED HEREBY BUT NO
REPRESENTATIONS ARE MADE OR GUARANTEE GIVEN BY THE CONSULTANT AS
TO THE AMOUNT OF TIME IT WILL SPEND IN PROVIDING THE SERVICES NOR
TO THE ULTIMATE SUCCESS OF ANY TRANSACTION OR OTHER ACTION
UNDERTAKEN BY THE COMPANY. IN NO EVENT WILL THE AGGREGATE DAMAGES
CLAIMED BY THE COMPANY UNDER THIS AGREEMENT EXCEED THE TOTAL CASH
FEES RECEIVED BY THE CONSULTANT, EXCEPT IN THE CASE OF WILLFUL
MISCONDUCT, GROSS NEGLIGENCE OR ACTUAL FRAUD.
9.2 Notices. All notices and other communications provided for or
permitted in this Agreement will be made in writing by
hand-delivery, registered first-class mail, or courier
guaranteeing overnight delivery:
If to the Company to:
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TTI Holdings of America, Inc.
00 Xxxxx Xxxxxxxx
Xxxxxxxxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxxxx, Chief Executive Officer
If to the Consultant to:
------------------------
Crossover Advisors, LLC
000 Xxxxxxx Xxxxxx - 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxx, Managing Member
or at such other address as any party specifies by notice given to the
other parties in accordance with this Section 9.2
All notices and communications will be deemed to have been duly given;
at the time delivered by hand, if personally delivered; three business
days after being deposited in the mail, postage prepaid, if mailed;
when receipt acknowledged, and on the next business day if timely
delivered to a courier guaranteeing overnight delivery; provided,
however, that the inability to deliver any notice or other
communication because of the changed address of which no notice was
given, or rejection or refusal to accept any notice or other
communication as of the date if such inability to deliver or rejection
or refusal to accept delivery.
9.3 Waivers. The failure of a party to this Agreement to insist upon
strict adherence to any of the terms of this Agreement on any
occasion will not be considered a waiver, or deprive that party
of the right thereafter to insist upon strict adherence to that
term or other term of this Agreement. Any waiver must be in
writing.
9.4 Force Majeure. The Consultant will not be responsible for any
failure or delay in performance of its obligations under this
Agreement because of circumstances beyond its reasonable control
including acts of God, fires, floods, wars, civil disturbances,
sabotage, accidents, labor disputes (whether or not the
employees' demands are reasonable and within the party's power to
satisfy), governmental actions or transportation delays.
9.5 Governing Law. This Agreement, the rights of the parties in,
under and to this Agreement and any dispute or action relating to
this Agreement (whether in contract, tort or otherwise) will be
governed by, construed and enforced in accordance with the laws
of New York applicable to the agreements made and performed
entirely in that State. Any legal actions, suits or proceeding
arising out of this Agreement (whether arising in contract, tort
or otherwise) other than any claim, action, dispute or
controversy subject to arbitration under Section 7 hereof, will
be brought exclusively in a federal or state court located in the
State of New York having jurisdiction of those courts with
respect to any legal actions, suits or proceeding (whether
arising in contract, tort or otherwise) arising out of this
Agreement. In the event of any legal action, suit or proceeding,
the parties waive their right to a jury trail.
9.6 Entire Agreement; Amendments. This Agreement represents the
entire understanding of the parties and superceded and cancels
any and all prior negotiations, undertakings and agreements
between the parties, whether written or oral, with respect to the
subject matter of the Agreement. This Agreement may be amended,
modified, waived or terminated only by a written instrument
signed by both parties to this Agreement.
9.7 Binding Effect. This Agreement will insure to be the benefit of
and will be binding upon the parties their respective successors,
permitted transferees and assigns.
9.8 Assignment and Benefits of Agreement. This Agreement may not be
assigned by any party to this Agreement without the written
consent of the other party. Nothing in this Agreement, express or
implied, is intended to confer upon any person other that the
parties hereto, and their said successors and assigns, any rights
under or by reason of this Agreement.
9.9 Independent Contractor. Each of the Company and the Consultant
certifies that neither party has any authority to act for or bind
the other party except as expressly provided for in this
Agreement, that the Consultant may work for others, and that any
persons provided by the Consultant under this Agreement will be
solely the employees or agents of the Consultant under its sole
and exclusive direction and control.
9.10 Severability. To the extent that any provision of this Agreement
or the application thereof is determined by a court of competent
jurisdiction to be invalid or unenforceable, the remainder of
this Agreement, or the application of such a provision under
other circumstances, will be unaffected and will continue in full
force and effect unless the invalid or unenforceable provision is
of such essential importance for this Agreement that it is to be
reasonably assumed that the parties would not have concluded this
Agreement without the invalid or unenforceable provision.
9.11 Consents. Any consent or approval to be given under this
Agreement may be delegated by the party to give such consent or
approval to any agent or representative as such party may, from
time to time, authorize in writing.
9.12 Counterparts. This Agreement may be executed in any number of
counterparts, and each of the parties on separate counterparts,
each of which, when so executed, will be deemed an original, not
all of which will constitute but one and the same original.
9.13 Third Parties. Nothing in this Agreement, expressed or implied,
is intended or will be construed to confer upon or give any
person other than parties to this Agreement, their permitted
successors or assigns and (to the extent indicated herein) any
rights or reminded under or by reason of this Agreement.
9.14 Further Assurances. Each party will take or perform such actions
as reasonable requested by the other party, including the
execution of any additional documents, in order to carry out the
intent of, and to facilitate and effectuate the actions
contemplated by this Agreement.
SIGNATURE PAGE TO CONSULTING AGREEMENT BETWEEN TTI HOLDINGS OF AMERICA, INC.,
AND CROSSOVER ADVISORS, LLC.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first above written.
TTI HOLDINGS OF AMERICA, INC.
By: _________________
Name: Xxxxxx Xxxxxxx
Title: Chairman and Chief Executive Officer
CROSSOVER ADVISORS, LLC
By: _________________
Name:________________
Title: Managing Member
