Execution Copy
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (this "Agreement") is dated as of November 1,
1999, by and between URBAN COOL NETWORK, INC., a Delaware corporation (the
"Company") and RMH CONSULTING CORP., a Florida corporation (the "Consultant").
R E C I T A T I O N S
A. The Company recognizes that the Consultant possesses knowledge and
experience regarding the business and operations of the Company. The Company
believes that the Consultant's business advice will be beneficial to the Company
and wishes to obtain such advice and the benefit of the Consultant's knowledge
and experience.
B. The Company desires to retain the services of the Consultant and the
Consultant desires to provide services to the Company, subject to the terms and
conditions set forth in this Agreement.
O P E R A T I V E P R O V I S I O N S
In consideration of the foregoing recitations, the mutual promises
hereinafter set forth and other good and valuable consideration, the receipt and
sufficiency of which are acknowledged hereby, the parties hereto, intending
legally to be bound, hereby covenant and agree as follows:
ARTICLE I
ENGAGEMENT OF SERVICES
1.1 Engagement of Consultant. The Company hereby engages the Consultant
and the Consultant hereby agrees to provide consulting services as set forth in
Section 1.2 of this Agreement.
1.2 Services to be Provided.
(a) Services. During the term of this Agreement, the Consultant
shall make itself available to consult with Xxxxx X. Xxxxx, III (the "CEO"),
upon reasonable notice from the Company, during the Consultant's normal business
hours. The Consultant shall report exclusively to the CEO and shall perform such
consulting services as shall be requested from time to time by the CEO,
including but not limited to, assisting the Company implement its business plans
and strategies (except that the Consultant shall not provide services with
respect to mergers,
acquisitions, financing or recapitalizations unless the CEO and the Consultant
reach an agreement with respect thereto) (collectively referred to herein as the
"Services").
(b) Performance of Services. The Consultant is responsible for
reasonably determining the method, details and means of performing the Services
required under this Agreement. Such consultation may be by telephone, in writing
or by other method of communication selected in the reasonable exercise of the
Consultant's discretion. Unless otherwise agreed to in writing by the
Consultant, the Consultant shall provide the Services required hereunder at
Miami, Florida or New York, New York or at such other location or locations
which the Consultant and the Company mutually agree. The Consultant shall not be
responsible for submitting any oral or written reports as to its methods or
progress in performing its duties hereunder; however, the Consultant shall
consult with the CEO as reasonably required as to the progress of any matters on
which the Consultant may be consulting.
(c) Extent of Services. During the Term of this Agreement, it is
acknowledged and agreed that the Consultant shall provide its services solely on
a part-time basis.
1.3 Term of Agreement. The term of this Agreement shall commence on and
be effective as of November 1, 1999 ("Commencement Date") and shall continue for
two years after the Commencement Date (the "Term"), unless either party provides
to the other written notice terminating this Agreement as of the end of the
first year of this Agreement, which notice must be delivered at least 15 days
prior to the first anniversary of this Agreement. In addition, if the Company
breaches or otherwise terminates this Agreement (other than as provided in the
immediately preceding sentence) prior to the end of the Term, the Company
acknowledges and agrees to pay to the Consultant, immediately upon such breach
or termination, the Compensation which would have otherwise been payable to
Consultant for the entire Term less any amounts previously paid.
1.4 Nature of Consulting Relationship. It is agreed and understood by
the parties to this Agreement that, for all purposes, during the term of this
Agreement, the Consultant shall serve solely as an independent contractor of the
Company, reporting only to the CEO, and shall not be an employee of the Company
in any capacity. Nothing in this Agreement shall be interpreted or construed as
creating or establishing the relationship of employer and employee between the
Consultant and Company. As an independent contractor, the Consultant shall
accept any directions issued by the CEO pertaining to the goals to be attained
and the results to be achieved by it, but shall be solely responsible for the
manner and hours in which it will perform its services under this Agreement.
1.5 Other Business Activities of Consultant. The Company acknowledges
and agrees that the Consultant is an independent contractor who may market and
make its services available to a variety of business clients. The rendering of
services by the Consultant to the Company hereunder is not to be deemed
exclusive, and the Consultant shall be permitted to provide consultation,
advice,
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assistance and/or other services to other business clients while the Consultant
is retained by the Company pursuant to this Agreement.
ARTICLE II
COMPENSATION
2.1 Fees. In consideration for the performance of the Services to be
provided by the Consultant, the Company shall pay a fee to the Consultant equal
to $6,250 per month, payable in advance on the first day of each month (the
"Compensation") during the Term of this Agreement, commencing on the
Commencement Date. Notwithstanding the foregoing, no amount of the Compensation
shall be currently payable as provided in the foregoing sentence until the
earlier of (i) the consummation of the initial public offering of the securities
of the Company or (ii) May 1, 2000 (the "Payment Date"). On the Payment Date,
the Consultant shall receive, without interest, from the Company all
Compensation that was otherwise due and payble through the Payment Date and
shall begin to receive the monthly Compensation as otherwise provided in this
Agreement.
2.2 Additional Compensation.
(a) In addition to the consideration set forth in Section 2.1,
simultaneously with the execution of this Agreement, the Consultant shall
receive from the Company stock certificates representing 150,000 shares of
common stock, $.01 par value, of the Company (the "Common Stock"). All of the
Common Stock shall be subject to a registration rights agreement between the
Company and the Consultant, which shall be executed simultaneously with the
execution of this Agreement. Any default under such registration rights
agreement shall also be a default and breach hereunder. The Company represents
and warrants that as of the Commencement Date, the Common Stock has a negative
book value per share.
(b) Notwithstanding the foregoing, if the Company commences an
initial public offering of the Common Stock at a price of $9.00 or less per
share, then the Company shall issue to the Consultant the number of additional
shares of Common Stock equal to (i) $1,500,000, (ii) divided by the price per
share of such offering, (iii) less the number of shares issued in subsection
2.2(a).
(c) So long as the Company has not breached this Agreement,
beginning on December 27, 1999 and on the twentieth-seventh day of each of the
following three months (ending on March 27, 1999), the Company shall have the
right, upon five business days' notice to the Consultant, to repurchase 15,000
shares of the Common Stock granted to Consultant under this Section for an
aggregate purchase price of $2,000. Simultaneously with such repurchase, the
Company shall pay the purchase price to the Consultant in immediately available
funds. The rights to repurchase granted hereunder are separate and distinct and
are not cumulative. If purchase price is not received by the Consultant on the
date of repurchase, then the repurchase rights granted hereunder are forever
forfeited and waived.
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(d) From time to time, the Company may also pay to the Consultant
additional compensation, including but not limited to, bonuses, stock options or
other similar compensation, at such times and in such amounts as its board of
directors may determine.
2.3 Expense Reimbursement. The Company shall reimburse the Consultant
for all reasonable business expenses actually paid or incurred by the Consultant
during the Term in the course of and pursuant to the business of the Company,
upon proper submission of reasonable supporting documentation (not to include
documentation for de minimis amounts) by the Consultant. In addition, the
Company shall promptly reimburse the Consultant for all costs and expenses,
including, without limitation, reasonable attorney's fees and costs, incurred by
the Consultant in connection with the preparation, negotiation and execution of
this Agreement, as well as the recovery of expenses pursuant to Section 4.7
below.
ARTICLE III
NON DISCLOSURE
The Consultant shall not at any time disclose, directly or indirectly,
to any person, firm, corporation, partnership, association or other entity, any
confidential information relating to the Company or any of its subsidiaries or
affiliates, or any information concerning the financial condition, assets,
personnel, procedures, techniques, customers, sources of leads and methods of
obtaining new businesses or the methods generally of doing and operating the
respective businesses of the Company and its subsidiaries and affiliates, except
to the extent that such information is a matter of public knowledge or is
required to be disclosed by law or judicial or administrative process or to the
extent that the Company has approved such disclosure.
ARTICLE IV
MISCELLANEOUS
4.1 Entire Agreement; Amendment. This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof
and supersedes all prior agreements, understandings, negotiations and
discussions, both written and oral, among the parties hereto. This Agreement may
not be amended or modified in any way except by a written instrument executed by
the Company and the Consultant.
4.2 Notice. All notices, requests, demands, claims, and other
communications hereunder shall be in writing and shall be delivered both by
regular United States mail (first class postage prepaid) and certified or
registered mail (first class postage prepaid), guaranteed overnight delivery, or
facsimile transmission if such transmission is confirmed by United States mail
(first class postage prepaid) or guaranteed overnight delivery, to the following
addresses and facsimile
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numbers (or to such other addresses or facsimile numbers which such party shall
designate in writing to the other party):
If to the Consultant: RMH Consulting Corp.
X.X. Xxx 000000
Xxxxx Xxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
Attn: President
with copy to: Xxxxxxxxx Traurig, P.A.
0000 Xxxxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxxx, Esq.
If to the Company: Urban Cool Network, Inc.
0000 Xxx Xxxxxx
Xxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Attn: Xxxxx X. Xxxxx, III, Chief
Executive Officer
with copy to: Xxxxxxxxx, Xxxxxxx & Xxxxxxx, P.C.
000 Xxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attn: Xxxxxx X. Xxxxx, Esq.
4.3 Governing Law. The provisions of this Agreement shall be governed
by and construed in accordance with the laws of the State of Florida (excluding
any conflict of law rule or principle that would refer to the laws of another
jurisdiction). Each party hereto irrevocably submits to the jurisdiction of the
Circuit Court of the State of Florida, Miami-Dade County and the Federal
District Court for the Southern District of Florida, in any action or proceeding
arising out of or relating to this Agreement, and each party hereby irrevocably
agrees that all claims in respect of any such action or proceeding must be
brought and/or defended in such court. Each party hereto consents to service of
process by any means authorized by the applicable law of the forum in any action
brought under or arising out of this Agreement and each party irrevocably
waives, to the fullest extent each may effectively do so, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
4.4 Assignment: Successors and Assigns. Neither the Consultant nor the
Company may make an assignment of this Agreement or any interest herein (except
any interest of the
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Consultant in the common stock granted in Article II), by operation of laws or
otherwise, without the prior written consent of the other party. If the Company
assigns this Agreement without such consent by the Consultant or if the Company
sells all or substantially all of its assets or enters into a merger or
consolidation, then this Agreement shall immediately terminate and the
Consultant shall immediately be paid by the Company the entire Compensation
which would have otherwise been payable to the Consultant for the entire Term,
less any amounts previously paid to the Consultant. This Agreement shall inure
to the benefit of and be binding upon the Company and the Consultant, their
respective heirs, personal representatives, executors, legal representatives,
successors and assigns.
4.5 Waiver. The waiver by any party hereto of the other party's prompt
and complete performance or breach or violation of any provision of this
Agreement shall not operate nor be construed as a waiver of any subsequent
breach or violation, and the waiver by any party hereto to exercise any right or
remedy which it may possess shall not operate nor be construed as the waiver of
such right or remedy by such party or as a bar to the exercise of such right or
remedy by such party upon the occurrence of any subsequent breach or violation.
4.6 Severability. The invalidity of any one or more of the words,
phrases, sentences, clauses, sections or subsections contained in this Agreement
shall not affect the enforceability of the remaining portions of this Agreement
or any part thereof, all of which are inserted conditionally on their being
valid in law, and, in the event that any one or more of the words, phrases,
sentences, clauses, sections or subsections contained in this Agreement shall be
declared invalid by a court of competent jurisdiction, then this Agreement shall
be construed as if such invalid word or words, phrase or phrases, sentence or
sentences, clause or clauses, section or sections, or subsection or subsections
had not been inserted.
4.7 Attorneys Fees. In the event that any enforcement action or
proceeding, including but not limited to litigation, shall arise between the
Company and the Consultant based, in whole or in part, upon this Agreement or
any provisions contained herein, the prevailing party in such action or
proceeding shall be entitled to recover from the non-prevailing party, and shall
be awarded by a court of competent jurisdiction, any and all reasonable fees and
disbursements of counsel paid, incurred or suffered by such prevailing party as
the result of, arising from, or in connection with, any such action or
proceeding.
4.8 Section Headings. The section or other headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of any or all of the provisions of this Agreement.
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4.9 No Third Party Beneficiary. Nothing expressed or implied in this
Agreement is intended, or shall be construed, to confer upon or give any person,
firm, corporation, partnership, association or other entity, other than the
parties hereto and each of their respective heirs, personal representatives,
legal representatives, successors and assigns, any rights or remedies under or
by reason of this Agreement.
4.10 No Authority to Bind Company. The Consultant does not and shall
not have any authority to enter into any contract or agreement for, on behalf of
or in the name of the Company, or to legally bind the Company to any commitment
or obligation.
4.11 Construction. This Agreement and any documents or instruments
delivered pursuant hereto or in connection herewith shall be construed without
regard to the identity of the person who drafted the various provisions of the
same. Each and every provision of this Agreement and such other documents and
instruments shall be construed as though all of the parties participated equally
in the drafting of the same. Consequently, the parties acknowledge and agree
that any rule of construction that a document is to be construed against the
drafting party shall not be applicable either to this Agreement or such other
documents and instruments.
4.12 Indemnification. To the maximum extent permitted by law, the
Company shall indemnify, hold harmless, protect and defend (with counsel
reasonably acceptable to Consultant) Consultant and all others who could be
liable for the obligations of any of them from and against any and all claims,
demands, actions, fines, penalties, liabilities, losses, damages, injuries and
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expenses (including without limitation, actual attorneys', consultant's and
expert witness' fees and costs at the pre trial, trial and appellate levels and
in bankruptcy proceedings) related to, arising out of or resulting from the
performance by the Consultant of its obligations and duties hereunder in
accordance with the terms hereof, provided, however, that the Company does not
hereby agree, and shall not be obligated to, so indemnify the Consultant from
any such loss, cost, damage, liability or expense arising out of any act or
omission of the Consultant or any of its agents, officers, employees,
independent contractors or representatives, which act or omission constitutes
gross negligence, willful misconduct or fraud or is in material breach of this
Agreement. In addition, the Company shall provide similar coverage for the
Consultant under its applicable directors and officers insurance policies and
other policies as it provides for its executives performing similar functions
and duties. Notwithstanding any other provisions of this Agreement to the
contrary, the Company's obligations under this Section shall survive the
expiration, termination or cancellation of this Agreement.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first above written.
THE COMPANY:
URBAN COOL NETWORK, INC.
a Delaware corporation
By: /s/ Xxxxx X. Xxxxx, III
---------------------------------
Xxxxx X. Xxxxx, III
Chief Executive Officer
THE CONSULTANT:
RMH CONSULTING CORP.,
a Florida corporation
By: /s/ X. Xxxxxxxxxx
----------------------------------
Name:
Title:
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AMENDMENT NO. 1 TO CONSULTING AGREEMENT
Amendment No. 1 dated December 3, 1999 to the Consulting Agreement
(the "Consulting Agreement") dated as of the 1st day of November, 1999 by Urban
Cool Network, Inc. (the "Company") and RMH Consulting Corp. (the "Consultant").
W I T N E S S E T H
WHEREAS, the parties hereto hereby agree that it would be in their
mutual best interest to amend the Consulting Agreement in the manner set forth
herein;
NOW, THEREFORE, in consideration of the above premises and the
mutual promises contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree that the Consulting Agreement is amended as follows:
I. Modifications.
A. The following shall be added to the end of paragraph 2.2(c):
"Notwithstanding anything contained herein to the contrary, in
the event that the Company completes an initial public
offering (the "IPO") of the Company's securities, the
Consultant agrees (i) not to sell any shares of Common Stock
which the Company has the right to repurchase as of the date
of the consummation of such initial public offering until 60
days after the effective date of the registration statement in
connection with the IPO and (ii) the Company's right to
repurchase shares of Common Stock may be exercised by the
Company with respect to all of such shares of Common Stock
commencing forty five (45) days after the effective date of
the registration statement in connection with the initial
public offering and terminating 15 days thereafter. The
Consultant agrees to the placing of a legend on the shares of
Common Stock to reflect the foregoing. In the event that we
waive our right to repurchase any of such shares of Common
Stock, then the restriction on sale described in 2.2(c)(i)
shall also be deemed waived with respect to such shares. The
foregoing shall not affect any shares of Common Stock owned by
the Consultant as to which the Company's right to repurchase
has expired, been waived or that the Company agrees to waive
in the future.
II. Confirmation. Except as expressly specified herein, all other terms,
conditions and provisions of the Consulting Agreement are hereby confirmed and
shall remain in full force and effect without modification.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the day and year first above written.
URBAN COOL NETWORK, INC.
By:
-------------------------------------
Name:
Title:
RMH CONSULTING CORP.
By:
-------------------------------------
Name:
Title:
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