Consulting Agreement
This Agreement is made as of the 16th day of November, 1999 by and between
XxxxxxxXxxxxxx.xxx Inc., having its business offices at 000 X. XxXxxxx Xxxxxx
Xxxxx 0000 Xxxxxxx XX, 00000 (the "Company" and VME. Corp. with principal
offices at 0000 Xxxx Xxxxx Xxxxxxx XX 00000 (the "Consultant").
WITNESSETH:
WHEREAS, the Company desires to retain the Consultant and the Consultant
desires to be retained by the Company, all pursuant to the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the foregoing and the mutual promises
and covenants herein contained, it is agreed as follows:
1. Retention. The Company hereby retains the Consultant to perform
nonexclusive Consulting services related to corporate finance and other matters,
and the consultant hereby accepts such retention and shall undertake reasonable
efforts to perform for the Company the duties described herein. In this regard,
subject to paragraph 6 hereof, the Consultant shall devote such time and
attention to the business of the Company, as shall be determined by the
Consultant, in its sole discretion, subject to the direction of the Chairman of
the Company.
a). The Consultant agrees, to the extent reasonably required in the conduct
of the business of the Company and at the Company's request, to place at the
disposal of the Company its judgment and experience and to provide business
development services to the Company including the following,
(i) review the Company's managerial and financial requirements;
(ii) identify and close merger and acquisition candidates;
(iii) analyze and assess alternatives for the Company, presented by the
Company for raising capital, including public or private offerings of the
Company's securities; and
(iv) identify and make known to the Company candidates for the purpose of
the Company's issuance of private placement securities;
(v) Perform the applicable investment banking activities to inure the
Company's qualification for NASDAQ listing.
b). At the Consultant's request, the Company will provide "due diligence"
presentations to the Consultant.
2. Term. The Consultant's retention hereunder shall be for a term of two
years commencing on the date of this Agreement. Either party upon 60 days prior
written notice to the other may terminate this Agreement.
3. Compensation. For its consulting services hereunder, the Company shall
grant to the Consultant a warrant (the "Warrant") to purchase 500,000 shares of
Common Stock of the Company exercisable for two (2) years from the date hereof
at a price of $.13 per share. The Warrant shall be in a form to be mutually
agreed upon by the parties. The Consultant's Warrant shall have anti-dilution
provisions for stock dividends, splits, mergers, sale of substantially all of
the Company's assets, sale of stock at below the then current exercise price of
the Consultant's Warrant, and for other unusual events (other than employee
benefit and stock option plans for employees and advisors of the Company). The
said Warrant shall be issued in the following manner,
(i) 100,000 issued at time of the agreement hereof;
(ii) 100,000 on the sixth consecutive month and every sixth month thereafter
up to an including the twenty forth month.
In lieu of any cash payment required by the Consultant in connection with
the exercise of the consultant Warrant, the Holder(s) of the Consultant's
Warrant shall have the right at any time and from time to time to exercise the
Consultant's Warrant in full or in part by surrendering the Warrant Certificate
as payment of the aggregated Exercise Price. The number of shares within the
Warrant Certificate to be surrendered in payment of the aggregate Exercise Price
for the shares within the Consultant's Warrant to be exercised shall be
determined by multiplying the number of the shares within the Consultant's
Warrant to be exercised Price per share, and then dividing the product thereof
by the amount equal to the Market Price per share, minus the Exercise Price.
Solely for the purposes of this paragraph, Market Price shall be calculated
either (i) on the date which the form of election is deemed to have been sent
company ("Notice Date") or (ii) as the average of the Market Prices for each of
the five trading days proceeding the Notice, whichever of (i) or (ii) is
greater.
The Company will reserve and at all have available a sufficient number of
shares of its common stock to be issued upon the exercise of the Consultant's
Warrant.
The Company also agrees to grant to the Consultant, subject to the
conditions listed below, the right to demand registration of the Common Stock
issuable upon exercise of the Warrant referred to above, on up to two (2)
occasions with all expenses of the first registration to be born by the Company
and all expenses of the second registration to be born by the Consultant;
provided, however, that such demand registration right shall be exercisable
commencing one (1) year from the date of this Agreement.
In addition, the Company shall, subject to the conditions listed below,
"piggy back" registration rights to include the shares of Common Stock issue
upon exercise of the Warrant in any registration statement filed by the Company
under the Securities Act of 1933 relating to an underwriting of the shares of
common stock or other security. Inclusion of such shares is subject
to the willingness of the managing underwriter(s) to include said shares of
Common Stock. In the event that the Company grants registration rights to ant
other shareholder on terms and conditions the Consultant deems to be more
favorable than these granted hereunder, the Company agrees to grant the same
rights to the Consultant.
Notwithstanding any of the foregoing, The Company shall issue to the
Consultant 150,000 of the Warrants herein stated it conditions of either of the
foregoing (i) The Company commences a termination of the agreement hereof and or
(ii) The Company enters into a consolidation by way of an acquisition.
4. Expenses. The Company agrees to reimburse the Consultant for
reasonable expenses incurred by the Consultant in connection with the services
rendered hereunder, including but not limited to the Consultant's due diligence
activities with respect to the Company. Any such expenses shall require the
prior approval of the Company.
5. Indemnification. The Company agrees to indemnify and hold harmless
the Consultant and its affiliates, the respective directors, officers, partners,
agents and employees and each other person, if any, controlling the Consultant
or any of its affiliates (collectively the "Consultant Parties"), to the full
extent lawful, from and against all losses, claims, damages, liabilities and
expenses incurred by them (including attorney's fees and disbursements) that
result from actions taken or omitted to be taken (including any untrue
statements made or any statements omitted to be made) by the Company, its agents
or employees. Consultant will indemnify and hold harmless the Company and the
respective directors, officers, agents and employees of the Company (the
"Company Parties") from and against all losses, claims, damages, liabilities and
expenses that result from bad faith, gross negligence or unauthorized
representations of the Consultant. Each person or entity seeking
indemnification hereunder shall promptly notify the Company, or the Consultant
as applicable, of any loss, claim, damage or expense for which the Company or
the Consultant as applicable, may become liable pursuant to this section, shall
not pay, Settle or acknowledge liability under any such claim without consent of
the party liable for indemnification, and shall permit the Company or to
mitigate actual or potential damages. The scope of this indemnification between
the Consultant and the Company shall be limited to, and pertain only certain
transactions contemplated or entered into pursuant only to this investment
Banking Agreement.
The Company or the Consultant or the Consultant, as application, shall have
the opportunity to defend any claim for which it may be liable hereunder,
provided it notices the party claiming the right claim for which it may be
liable hereunder, provided it notifies the party claiming the right to
indemnification within 15 days of notice of the claim.
The rights stated pursuant to the preceding two paragraph shall be in
addition to any rights that the Consultant the Company, or any other person
entitled to indemnification may have in common law otherwise including but not
limited to, any right to contribution.
6. Status of Consultant. The Consultant shall be deemed to be an
independent contractor and, except as expressly provided or authorized in this
Agreement, shall have no authority to act for or represent the Company.
7. Other Activities of Consultant. The company recognizes that the
Consultant now renders and may continue to render financial consulting and other
investment banking services to other companies that may or may not conduct
business and activities similar to those of the Company. The Consultant shall
not be required to devote its full time and attention to the performance of its
duties under this Agreement, but shall devote only so much of its time and
attention as it deems reasonable or necessary for such purposes, in its sole
discretion.
8. Control. Nothing contained here shall be deemed to require the Company
to take any contrary to its Certificate of Incorporation or By-Laws, or any
applicable statue or regulation, or to deprive its Board of Directors of their
responsibility for any control of the conduct of the affairs of the Company.
9. Notices. Any notice hereunder shall be send to the Company and the
Consultant at their respective addresses above set forth. Any notice shall be
given by registered or certified mail, postage prepaid, and shall be deemed to
have been given when deposited in the United States mail. Either party may
designate any other address to which notice will be given, by giving written
notice to the other of such change of address in the manner herein provided.
10. Governing Law; Venue and Jurisdiction. This Agreement has been made in
the State of Illinois and shall be construe and governed in accordance with the
laws thereof without regard to conflicts of laws. Any proceeding commenced by
either party to enforce, or interpret any provision of, this Agreement shall be
brought in Xxxx County. The Company hereby submits to the jurisdiction of the
courts of the State of Illinois purposes.
11. Entire Agreement. This Agreement contains the entire agreement between
the parties, may not be altered or modified, except in writing and signed by the
party to be charged thereby and supersedes any and all previous agreements
between the parties.
12. Binding Effect; Assignment. This Agreement shall be binding upon the
parties hereto and respective heirs, administrators, successors, assigns. The
Company may not assign this Agreement without prior written consent of the
Consultant.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement he day and
year first above written
XxxxxxxXxxxxxx.xxx Inc.
President /s/ Xxxx X. Xxxxxx
Consultant VME. Corp.
