BUSINESS CONSULTING AGREEMENT
THIS BUSINESS CONSULTING AGREEMENT (this "Agreement") is made
and entered into this day of , , by and between , a corporation, with its
principal place of business at . (hereinafter referred to as the "Company") and
Circle Group Internet, Inc., an Illinois corporation with its principal place of
business at 0000 Xxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000 (hereinafter referred
to as the "Consultant").
RECITALS
A. The Company is engaged in the [describe the scope of business
activities].
B. The Consultant provides business-to-business consulting services to
assist companies in many aspects of their business, including business plan
development, Internet marketing strategy development, web site design,
technology support, management consulting, corporate communications, sales
training, strategic networking and strategy and planning consulting.
C. The Company desires to avail itself of the Consultant's experience,
skills and abilities, and background and knowledge, and is willing to engage the
Consultant upon the terms and conditions set forth herein.
D. The Consultant agrees to be engaged and retained by the Company upon
said terms and conditions.
E. The parties hereto have each established a valuable reputation and
goodwill in their respective businesses.
G. Each party hereto, by virtue of its relationship with the other
party, will become familiar with and possessed with the manner, methods and
other confidential information pertaining to the such other parties business
activities.
NOW, THEREFORE, in consideration of the recitals, promises and
conditions in this agreement, the Consultant and the Company agree as follows:
1. Consulting Services.
(a) During the term of this Agreement, the Consultant is
hereby retained by the Company to provide consulting services to the Company as
described below. The Consultant shall provide such consulting services as
reasonably requested by the Company during the term of this Agreement, provided
that nothing hereunder shall require the Consultant to devote a minimum number
of hours per calendar month toward the performance of
1
services hereunder. The level and scope of services that may reasonably be
requested hereunder shall be dependent, in part, on the amount of compensation
to be paid to the Consultant by the Company hereunder. Unless otherwise agreed
to by the Consultant, all services hereunder shall be performed by the
Consultant, in its sole discretion, at its principal place of business or other
offices. Notwithstanding anything contained herein to the contrary, the services
to be performed by the Consultant hereunder may be performed by any employee of,
or consultant to, the Consultant, which is reasonably qualified to perform such
services. The consulting services to be rendered by the Consultant to the
Company include:
i. Business plan development, including assistance in
creating and revising the Company's business plan to accurately articulate
corporate intentions;
ii. Internet marketing strategy development to define
business models and branding strategies;
iii. Web site design to create user-friendly a web
site using original content and design;
iv. Technology support to provide secure e-commerce
business between the Company's customers and the Company, and to construct and
maintain employee communication systems including the Company's networks and
xxxxxx;
v. Evaluation of professionals to ensure the Company
is properly represented by attorneys and accountants with experience in all
areas of the Company's current and proposed business and operations;
vi. Debt management to assist the Company to reduce
or restructure the Company's debt to improve the Company's valuation;
vii. Management consulting (operations) to assist
management in using the Internet for day to day operations, and in the
understanding, analyzing, and management of the Company's intellectual assets;
viii. Management consulting (human resources) to help
promote a management philosophy and organizational structure tailored towards
teamwork and group contributions;
ix. Corporate communications;
2
x. Sales training to assist management in proper
sales techniques;
xii. Negotiation training;
xii. Strategic networking to assist the Company in
linking its name with beneficial contacts; and
xiii. Strategy and planning consulting to assist the
Company in identifying and analyzing market opportunities, as well as
anticipating competitive behavior.
(b) The Consultant shall specifically not provide any of the
following services to the Company:
i. The offer or sell the Company's securities, or any
other activities which require registration by the Consultant as a
broker-dealer;
ii. Engage in due diligence activities;
iv. Provide advice relating to the valuation of, or
the financial advisability of, any investments in the Company; or
v. Handle any funds or securities on behalf of the
Company.
(c) The Consultant will collaborate with the Company in
designing the content and marketing terms to be used on the Company's web site
to effectively market the Company, including creating effective and
attention-getting descriptive phrases highlighting the Company, such as search
engine registration and keyword computation, and other proprietary methods to
increase site rank and market within newsgroups on various news-wire services.
The Company will have the right to approve each aspect of the design, content
and marketing methods of its web site prior to its publication. The Company
acknowledges the Consultant has agreed to defer a portion of its compensation
hereunder to the date on which the Company's web site has been completed. The
Company further acknowledges that time is of the essence and represents,
warrants and covenants that it shall promptly respond to all manner of
communication from the Consultant regarding the necessary approvals for the web
site.
2. Term. The term of this Agreement shall be for a period of [insert
term] commencing on the date of the date of this Agreement and ending on [insert
date].
3
3. Compensation. As compensation for its services hereunder, Consultant
shall receive:
(a) $[ ] in cash, with $[ ] payable within two (2) business
days following the date of this Agreement, and the remaining $[ ] due within
five (5) business days following the completion of the Company's web site as
contemplated under Section 1(a)(iii) above; and
(b) [ ] shares of the Company's common stock (the
"Consultant's Shares"). The Consultant shall deemed to be the beneficial owner
of the Consultant's Shares upon the execution by the parties hereto of this
Agreement, and a certificate representing such shares shall be delivered to the
Consultant within three (3) business days following the date of this Agreement.
4. Expenses of the Consultant. The Consultant shall be responsible for
all expenses incurred by the Consultant in the performance of its duties
hereunder, which expenses shall include, postage, printing, long distance calls,
transmitting facsimiles, travel and wire service expenses reasonably related to
the Consultant's services to the Company.
5. Anti-dilution of the Number of Consultant's Shares.
(a) The Company represents, warrants and covenants that number
of Consultant Shares issued to the Consultant pursuant to Section 3(b) above
represents [ ] % of the Company's issued and outstanding Common Stock on a
fully-diluted basis immediately prior to the execution of this Agreement. It is
the intent of the parties hereto that until such time as the Consultant's Shares
shall have been registered for resale under the Securities Act of 1933 as
hereinafter set forth in Section 5 hereof, that the number of shares of the
Company's Common Stock owned beneficially by the Consultant at any time, and
from time to time during such period, shall equal [ ] % of the Company's issued
and outstanding Common Stock on a fully-diluted basis.
(b) The number of shares of the Company's common stock
issuable to the Consultant pursuant to Section 3(b) above shall be subject to
adjustment from time to time, as follows:
(i) If the Company in any manner issues or sells any
shares of its Common Stock, regardless of the type or amount of consideration
received, or to be received, by the Company;
(ii) If the Company in any manner issues, sells or
grants warrants or options which are exercisable into shares of the Company's
Common Stock, regardless of the vesting of such rights or the consideration to
be tendered to the Company upon their conversion or exercise;
4
(iii) If the Company in any manner grants any rights
or options to subscribe for or to purchase shares of its Common Stock or any
stock or other securities convertible into or exchangeable for Common Stock,
regardless of the vesting of such rights or the consideration to be tendered to
the Company upon their conversion or exercise; or
(iv) If the Company in any manner issues or sells any
convertible securities which are convertible or exercisable into shares of the
Company's Common Stock, regardless of the conversion of such rights or the
consideration to be tendered to the Company upon their conversion or exercise.
(c) The Company shall give the Consultant ten (10) business
days prior written notice of the anticipated occurrence of any of the events
described in Section 5(b) hereof.
(d) Upon the occurrence of any of the foregoing events, the
Company shall issue, on the date the shares, options, rights, warrants,
convertible or other securities are issued, to the Consultant such additional
number of shares of the Company's Common Stock so that the Consultant shall be
the beneficial owner of [ ]% of the Company's Common Stock on a fully-diluted
basis giving pro-forma effect to the issuance of shares of the Company's Common
Stock, including upon the exercise, conversion or otherwise of such options,
warrants, rights or convertible securities, regardless if they are exercisable
or convertible upon the date of issuance by the Company. The certificate(s)
representing such shares of Common Stock shall be delivered to the Consultant
within three (3) business days following the occurrence of any of the events
described in Section 5(b) hereof. For the purposes of this Agreement, the term
"Consultant's Shares" shall include such additional number of shares of Common
Stock as may be issued from time to time to the Consultant pursuant to the
provisions of this Section 5.
(e) The number of shares of Common Stock deemed outstanding at
any given time shall include the number of shares of Common Stock outstanding,
as adjusted as provided herein, but shall not include shares owned or held by or
for the account of the Company, and the disposition of any shares so owned or
held will be considered an issuance or sale of Common Stock hereunder.
6. Registration Rights.
(a) If at any time the Company shall prepare and file one or
more registration statements with the Securities and Exchange Commission under
the Securities Act of 1933 with respect to a public offering of equity or debt
securities of the Company, or of any such securities of the Company held by its
security holders, the Company will include in any such registration statement
5
such information as is required, and such number of Consultant's Shares held by
the Consultant or its designees or transferees as may be requested by it, to
permit a public offering of the Consultant's Shares so requested. In the event
of such a proposed registration, the Company shall furnish the Consultant with
not less than thirty (30) days' written notice prior to the proposed date of
filing of such registration statement. Such notice shall continue to be given by
the Company to the Consultant, with respect to subsequent registration
statements or post-effective amendments filed by the Company, until such time as
all of the Consultant's Shares have been registered, or may be sold without
registration under the Securities Act of 1933 or applicable state securities
laws and regulations, and without limitation as to volume, pursuant to Rule 144
of the Securities Act of 1933. The Company shall cause the registration
statement to remain effective for a period of at least nine (9) months from the
effective date of the registration statement or such earlier date as all of the
Consultant's Shares have been sold.
(b) Until such time as the Consultant's Shares shall have been
registered under the Securities Act of 1933 pursuant to the provisions of
subsection (a) of this Section 6, if at any time the Consultant shall give
notice to the Company requesting that the Company file with the Securities and
Exchange Commission a registration statement relating to the Consultant's
Shares, the Company shall, as expeditiously as possible, file and use its best
efforts to cause to become effective under the Securities Act of 1933 the
registration statement covering such number of the Consultant's Shares as the
Company has been requested to register for disposition by the Consultant, to the
extent required to permit the public sale or other public disposition thereof by
the Consultant. The Company shall cause the registration statement to remain
effective for a period of at least nine (9) months from the effective date of
the registration statement or such earlier date as all of the Consultant's
Shares have been sold.
(c) Notwithstanding anything contained herein to the contrary,
the Consultant may not demand registration of the Consultant's Shares if re-sale
of the Consultant's Shares is already covered by an effective registration
statement, or if the Consultant's Shares may otherwise be sold without
registration under the Securities Act of 1933 or applicable state securities
laws and regulations, and without limitation as to volume pursuant to Rule 144
of the Securities Act of 1933.
(d) The Company shall bear all expenses incurred in the
preparation and filing of such registration statements or post-effective
amendment (and related state registrations, to the extent permitted by
applicable law) and the furnishing of copies of the preliminary and final
prospectus thereof to the Consultant, other than expenses of the Consultant's
counsel and sales commissions incurred by the Consultant with respect to the
re-sale of such securities.
6
7. Cooperation. Both parties shall cooperate fully with each other in
the performance of the their respective obligations under this Agreement
including, without limitation, providing all necessary information, executing
all documents and performing all actions reasonably required in connection with
such performance.
8. Independent Contractor. This Agreement shall not constitute an
employer-employee relationship. It is the intention of the parties that the
Consultant shall be at all times an independent contractor of the Company. The
Consultant shall not have any authority to act as the agent of the Company and
shall not have the authority to, and shall not, bind the Company to any
agreements or obligations with a third party except as otherwise authorized by
the Company. Subject to the express provisions herein, the manner and means
utilized by the Consultant in the performance of its services hereunder shall be
under the sole control of the Consultant.
9. Non-Disclosure of Confidential Information. Both parties
acknowledge that it is their policy to maintain as secret and confidential all
valuable information heretofore or hereafter acquired, developed or used by each
other in relation to their respective business, operations, employees and
contacts which may give a competitive advantage in either party's industries
(all such information is hereinafter referred to as "Confidential Information").
The parties recognize that, by reason of the relationship of the parties, the
parties may acquire Confidential Information of the other party. The parties
recognize that all such Confidential Information is the property of the owning
party. In consideration of the parties entering into this Agreement, the parties
agree that:
(a) They shall never, directly or indirectly, publicly
disseminate or otherwise disclose any Confidential Information obtained during
the term of this agreement without the prior written consent of either party, it
being understood that the obligation created by this subparagraph shall survive
the termination of this Agreement;
(b) At all times, the parties shall exercise all due and
diligent precautions to protect the integrity of any of the other party's
documents embodying Confidential Information (which shall be marked
"Confidential" by the supplying party prior to delivery and, if not so marked,
shall not be deemed to embody Confidential Information), and upon termination of
this Agreement, each party shall return all such documents (and copies thereof)
in its possession or control to the other party; and
(c) In recognition of the foregoing, the parties represent,
warrant and covenant that they will not in the future use or disclose any of
such Confidential Information for the benefit of any person or other entity or
organization under any circumstances at any time.
7
10. Liability. In the absence of gross negligence or willful misconduct
on the part of Consultant or the Company, the Consultant shall not be liable to
the Company or to any officer, director, employee, stockholder or creditor, for
any act or omission in the course of, or in connection with, the provision of
advice or assistance hereunder. Except in those cases where the gross negligence
or misconduct of the Consultant is alleged and proven in a court of competent
jurisdiction, the Company agrees to and shall defend, indemnify and hold the
Consultant harmless from and against any and all suits, claims, demands, causes
of action, judgments, damages, expenses and liability (including court costs and
attorney's fees paid in the defense of any specific action) which may in any way
result from any activities pursuant to or in any connection with this Agreement.
11. Representations and Warranties. The Company hereby represents and
warrants to the Consultant as follows:
(a) This Agreement has been duly authorized, executed and
delivered on behalf of the Company and is the valid and binding obligation of
the Company, enforceable in accordance with its terms, subject only to the
effect, if any, of bankruptcy laws or similar laws relating to the insolvency of
debtors and to principles of equity and except as the Company's indemnification
and/or contribution obligations under this Agreement may be limited under
Federal or applicable state securities laws.
(b) The execution and delivery of, and the compliance with,
this Agreement by the Company and the consummation by the Company of the
transactions herein contemplated will not, with or without the giving of notice
or the lapse of time, or both: (A) result in a material conflict with or breach
of any of the material terms or provisions of, or constitute a default under, or
result in the modification or termination of, or require consent under, or
result in the creation or imposition of any lien, security interest, charge or
encumbrance upon any of the material properties or assets of the Company
pursuant to the terms of, any agreement or instrument to which the Company is a
party or by which the Company may be bound or to which any of the property or
assets of the Company is subject, or (B) violate the Company's articles of
incorporation or by-laws or (C) have any material effect on any material
license, permit, judgment, decree, order, statute, rule or regulation applicable
to the Company or any of its properties or businesses.
12. Indemnification.
(a) The acts, statements and representations made by the
Company to third parties are the sole responsibility of the Company, and the
Company agrees to indemnify the Consultant and hold the Consultant harmless for
any liabilities, claims, losses and expenses, including legal costs and
8
expenses incurred by the Consultant, that result from acts, statements and
representations made by the Company and its authorized representatives to third
parties. The Company represents that all materials provided to the Consultant in
relation to the consulting services to be provided hereunder are truthful and
accurate, and the Consultant may rely upon same without independent verification
of the facts or other information contained therein.
(b) The acts, statements and representations made by the
Consultant without the approval of the Company to third parties which are not
made in reliance upon information and/or material furnished to the Consultant by
the Company, rather written or oral, are the sole responsibility of the
Consultant, and the Consultant agrees to indemnify the Company for any
liability, claims, losses and expenses, including legal costs and expenses
incurred by the Company that result from the Consultant's representations made
without the approval of the Company.
13. Taxes. All taxes, duties and other governmental fees or charges
arising from the Consultant's receipt of remuneration shall be borne by the
Consultant, except to the extent that the Company is responsible for the fees,
costs and expenses in connection with the provisions of Section 6 hereof.
14. Notices. Any notice, request, demand or other communication
required or permitted hereunder shall be deemed to be properly given when
personally served in writing or when deposited in the United States mail,
postage prepaid, addressed to the other party at the address provided by each
party. Either party may change its address by written notice made in accordance
with this section.
15. Benefit of Agreement. This Agreement shall inure to the benefit of
and be binding upon the parties hereto, and their respective legal
representatives, administrators, executors, successors, subsidiaries and
affiliates.
16. Governing Law. This Agreement shall be construed in accordance with
the laws of the State of Illinois, without and application of the principles of
conflicts of laws. If it becomes necessary for any party to institute legal
action to enforce the terms and conditions of this Agreement, and such legal
action results in a final judgment in favor of such party ("Prevailing Party"),
then the party or parties against whom said final judgment is obtained shall
reimburse the Prevailing Party for all direct, indirect or incidental expenses
incurred, including, but not limited to, all attorney's fees, court costs and
other expenses incurred throughout all negotiations, trials or appeals
undertaken in order to enforce the Prevailing Party's rights hereunder. Any
suit, action or proceeding with respect to this Agreement shall be brought in
the state or federal courts located in Lake County in the State of Illinois. The
parties hereto hereby accept the exclusive
9
jurisdiction and venue of those courts for the purpose of any such suit, action
or proceeding. The parties hereto hereby irrevocably waive, to the fullest
extent permitted by law, any objection that any of them may now or hereafter
have to the laying of venue of any suit, action or proceeding arising out of or
relating to this Agreement or any judgment entered by any court in respect
thereof brought in Lake County, Illinois, and hereby further irrevocably waive
any claim that any suit, action or proceeding brought in Lake County, Illinois,
has been brought in an inconvenient forum.
17. Assignment Any attempt by either party to assign any rights, duties
or obligations that arise under this Agreement without the prior written consent
of the other party shall be void and shall constitute a breach of the terms of
this Agreement.
18. Entire Agreement; Modification. This Agreement constitutes the
entire agreement between the Company and the Consultant. No promises,
guarantees, inducements or agreements, oral or written, express or implied, have
been made regarding the provision of any services, other than as contained in
this Agreement. This Agreement can be modified only in writing signed by both
parties hereto.
19. Severability. In the event of the invalidity or unenforceability of
any one or more of the provisions of this Agreement, such illegality or
unenforceability shall not affect the validity or enforceability of the other
provisions hereof, and such other provisions shall be deemed to remain in full
force and effect.
20. Continuing Effect. Sections 5, 6, 9, 10 and 12 shall survive the
expiration or the termination of obligations of each party to the other.
21. Execution in Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same instrument.
10
IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the
date first written above.
CIRCLE GROUP INTERNET, INC.
By: __________________________
Xxxxx X. Xxxxx, President
[ Insert Name of Company ]
By: _______________________________
___________________ , President
11
