EXHIBIT 10.18
CONSULTING AGREEMENT
This Consulting Agreement (the "Agreement") is entered into as of January
24, 2000, by and between Omni Nutraceuticals, Inc., a Utah corporation and its
subsidiaries or affiliates (the "Company"), and Corporate Financial Enterprises,
a Delaware corporation ("Consultant").
WHEREAS, the Company desires to acquire or merge with other businesses,
enter into investment banking relationships and enhance shareholder value
through the sale or restructuring of its business, recapitalizations,
reorganizations and placement of common stock, preferred stock, and/or debt
instruments (the "Company Objectives");
WHEREAS, the Company recognizes that the Consultant can contribute to
finding, analyzing, structuring, negotiating and financing business sales and/or
acquisitions, joint ventures, alliances and other desirable projects, which
contribution is of great value to the Company and its shareholders;
WHEREAS, the Company believes it to be important both to the future
prosperity of the Company Objectives and to the Company's general interest to
retain Consultant as an exclusive consultant to the Company and have Consultant
available to the Company for consulting services in the manner and subject to
the terms, covenants, and conditions set forth herein;
WHEREAS, in order to accomplish the foregoing, the Company and Consultant
desire to enter into this Agreement, effective as of January 24, 2000, to
provide certain services as set forth herein.
NOW THEREFORE, in view of the foregoing and in consideration of the
premises and mutual representations, warranties, covenants and promises
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound hereby, agree as follows:
1. RETENTION. The Company hereby retains the Consultant on a non-exclusive
basis during the Consulting Period (as defined in Section 2 below), and
Consultant hereby agrees to be so retained by the Company, all subject to
the terms and provisions of this Agreement.
2. CONSULTING PERIOD. The Consulting Period shall commence on January 24,
2000 and terminate no earlier than January 24, 2001, upon at least 90 days
prior written notice. After January 24, 2001, either party may terminate
this Agreement by giving 30 days written notice of termination to the other
party.
3. DUTIES OF CONSULTANT. During the Consulting Period, the Consultant
shall use its reasonable and best efforts to perform those actions and
responsibilities necessary to (i) identify, analyze, structure and/or
negotiate business sales and/or acquisitions, including
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without limitation, merger agreements, stock purchase agreements, and any
agreements relating to financing and/or the placement of debt or equity
securities of the Company, (ii) assist the Company in its corporate
strategies, (iii) assist the Company in the implementation of its business
plan, in each case as requested by the Company (the "Services"). The
Company shall provide all necessary financing required in order to purchase
businesses approved by the Company, including cash or freely tradable or
restricted securities. Such securities may include freely tradable Common
Stock, restricted Common Stock, preferred stock in the Company, debt,
convertible debt or any other security. Consultant shall render such
Services diligently, in compliance with all applicable laws and to the best
of its ability.
4. OTHER ACTIVITIES OF CONSULTANT. The Company recognizes that Consultant
shall perform only those services that are reasonably required to
accomplish the goals and objectives set forth herein, and that Consultant
shall provide services to other businesses and entities other than the
Company. Consultant shall be free to directly or indirectly own, manage,
operate, join, purchase, organize or take preparatory steps for the
organization of, build, control, finance, acquire, lease or invest or
participate in the ownership, management, operation, control or financing
of, or be connected as an officer, director, employee, partner, principal,
manager, agent, representative, associate, consultant, investor, advisor or
otherwise with (collectively, be "Affiliated" with), any business or
enterprise, or permit its name or any part thereof to be used in connection
with any business or enterprise, engaged in any business, including but not
limited to, any business that is the same as, substantially similar to or
otherwise competitive with, adverse to, affiliated with, or otherwise
related to the Company. Consultant may be Affiliated with any entity which
may provide services to the Company. The Company hereby waives any conflict
of interest that may arise from a relationship between Consultant and any
entity which Consultant is Affiliated with provided that Consultant inform
the Company of any material conflicts known to Consultant. This Agreement
may not be assigned by Consultant, without the prior written consent of the
Company; provided, however, Consultant's right to receive compensation
hereunder may be assigned by Consultant.
5. COMPENSATION. In consideration for Consultant entering into this Agreement,
the Company shall compensate Consultant as follows:
a. MONTHLY FEES AND BENEFITS:
i. Retainer. The Company shall pay to Consultant a non-refundable
monthly retainer of $5,000.
ii. Expenses. The Company shall pay all such expenses reasonably
incurred during the Consulting Period by the Consultant for
business purposes which are related to or in furtherance of the
goals and objectives identified by the Company and/or the
provision of the Services (collectively,
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"Company Purposes"), including, without limitation, expenses
incurred with respect to the Consultant's travel (including
business class travel for flights of less than two hours and
first class travel for flights of two hours or more), meals and
entertainment and other customary and reasonable expenses for
Company Purposes. The Company shall pay authorized expenses
directly, or, upon submission of bills, receipts and/or vouchers
by the Consultant, by direct reimbursement to the Consultant.
Consultant shall obtain the prior approval of the Company for any
expenses in excess of $1,000, individually or in the aggregate.
b. FEES FOR ACQUISITION OPPORTUNITIES. The Company shall pay to the
Consultant a fee equal to ten percent (10%) of the total aggregate
consideration paid for any acquisition or sale by the Company of any
business, corporation or division (a "Target"), including, but not
limited to, acquisitions by stock purchase agreement, merger
agreement, plan of reorganization or asset purchase agreement, which
fee shall be due upon closing of the transaction. For purposes hereof,
the total aggregate consideration paid shall include all cash and
stock paid to the seller or sellers of a Target upon closing of the
transaction in addition to any contingent payments to the seller or
sellers, including without limitation, earnouts, as if all performance
targets are met, as well as any debts or liabilities assumed by the
Company, including without limitation any debts for which the Company
issues a guarantee. In addition, Consultant shall also be entitled to
a financing fee equal to ten percent (10%) of any private or public
placement of debt or equity securities of the Company, including
without limitation, promissory notes, debentures, convertible debt,
common stock or preferred stock, or any other securities owned by the
Company, including without limitation securities of other
corporations. Notwithstanding the foregoing, no fees shall be payable
to Consultant unless either (i) Consultant introduces to the Company a
party involved in any of the above described transactions (i.e. a
purchaser, seller, lender or investor), or (ii) Consultant, at the
request of the Company, provides advisory or other consulting services
in connection with the transaction.
c. THIRD PARTY COMMISSIONS. Consultant and/or its Affiliates shall be
entitled to share in any fees or commissions payable by third parties
on any transaction contemplated herein, including, but not limited to,
any fees payable to Consultant by a third party lender, financing
partner, or other party, or a seller of a corporation or business,
including, without limitation, investment banking fees or commissions,
business brokerage fees or commissions, finders fees, or any other fee
payable by a third party to Consultant for any reason including the
identification of the Company as a potential purchaser or seller of
such corporation or business (a "Transaction Commission"). The Company
hereby waives any conflict of interest that may arise due to any
transaction wherein Consultant receives such a Transaction Commission,
including, but not limited to, any conflict of interest which may
arise as a result of the dual representation by
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Consultant of the seller or purchaser of a corporation or business on
the one hand, and the Company on the other.
d. FEES PAID IN COMMON STOCK. The Company, at its option, may pay fees
due under paragraph (b) of this Section 5 in cash, or by issuance of
Restricted Common Stock or freely tradeable, registered Common Stock.
(Restricted Common Stock shall be issued at a rate equal to the lesser
of (i) twenty percent (20%) of the Bid Price on the day prior to the
closing date of a transaction which entitles the Consultant to receive
such fees, or (ii) $2.50. Freely tradeable, registered Common Stock,
pursuant to an effective and current registration statement, shall be
issued at the rate equal to the lesser of (i) ten percent (10%) of the
Bid Price on the day prior to the closing date of a transaction which
entitles the Consultant to receive such fees, or $4.00.) All fees
payable hereunder shall be paid within seven business days following
the date upon which Consultant submits a written statement setting
forth the amounts due and payable to Consultant.
6. TERMINATION. Subject to the cure provisions contained herein, the
Company may terminate the Consulting Period upon written notice for Cause
at any time. Cause shall mean that during the Consulting Period, the
Consultant (i) materially breached the terms of this Agreement or (ii)
engaged in gross negligence or willful or illegal misconduct that is
materially injurious to the Company, and, after written notice of such
breach or conduct, Consultant has failed to cure such breach or cease such
conduct within not less than 30 days. Any termination pursuant to this
section shall be communicated by written Notice of Intended Termination.
For purposes of this Agreement, a "Notice of Intended Termination" shall
mean a notice which shall clearly state the specific termination provision
in this Agreement relied upon and shall set forth in reasonable and
specific detail the facts and circumstances claimed to provide a basis for
termination of the Consulting Period. No Notice of Intended Termination
shall be valid unless it is signed by at least a majority of the entire
board of directors of the Company (the "Board"), not counting any designee
elected by Consultant or any of its affiliates.
a. Not less than 15 days after receipt of the Notice of Intended
Termination, Consultant shall have the opportunity to a full, complete
and fair hearing in the presence of the entire Board. Not less than 10
days prior to the hearing, the Board shall present to Consultant its
reasons for the termination, including the specific actions,
inactions, omissions or other facts relied upon by the Board in making
its determination that Consultant has materially breached this
Agreement or engaged in gross negligence or willful or illegal
misconduct and that the Company has the right to terminate this
Agreement for Cause. Consultant shall have the right to rebut any
evidence or allegations of wrongdoing at the hearing and shall have
the right to be represented by counsel of Consultant's choice at such
hearing. After such hearing, should the Board determine that this
Agreement may properly be
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terminated for Cause, it shall issue a written Final Notice of
Termination to Consultant, signed by at least a majority of the
members of the Board (not counting any designee elected by Consultant
or any of its affiliates), setting forth in detail the specific facts,
conclusions and findings of the Board in determining that Cause exists
for the termination of this Agreement. The Final Notice of Termination
shall contain an effective termination date, which effective
termination date shall be no less than thirty (30) days from the date
of the Final Notice of Termination.
7. NOTICE. Any notice required, permitted or desired to be given pursuant to
any of the provisions of this Agreement shall be deemed to have been
sufficiently given or served for all purposes if delivered in person or
sent by certified mail, return receipt requested, postage and fees prepaid,
or by national overnight delivery prepaid service to the parties at their
addresses set forth below. Any party hereto may at any time and from time
to time hereafter change the address to which notice shall be sent
hereunder by notice to the other party given under this paragraph. The date
of the giving of any notice sent by mail shall be the day two days after
the posting of the mail, except that notice of an address change shall be
deemed given when received. The addresses of the parties are as follows:
TO CONSULTANT:
CORPORATE FINANCIAL ENTERPRISES
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
TO THE COMPANY:
Omni Nutraceuticals, Inc.
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▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier:(▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Executive Officer
8. WAIVER. No course of dealing nor any delay on the part of either party in
exercising any rights hereunder will operate as a waiver of any rights of
such party. No waiver of any default or breach of this Agreement or
application of any term, covenant or provision hereof shall be deemed a
continuing waiver or a waiver of any other breach or default or the waiver
of any other application of any term, covenant or provision.
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9. DEFINITION OF "REASONABLE AND BEST EFFORTS." Reasonable and best efforts
shall not include the payment of any non-reimbursable out-of-pocket costs
or other payments by Consultant. Consultant shall not guarantee, make any
representation concerning (which representation would survive the closing
of any escrow or other transaction) or warrant (i) the condition,
performance, value, or profitability of any business purchased, sold by, or
otherwise considered for purchase by the Company; (ii) the validity or
authorization of any capital stock purchased, sold by, or otherwise
considered for purchase by the Company; (iii) the market value of any
capital stock, business or assets purchased, sold by, or otherwise
considered for purchase by the Company; (iv) the ability to finance,
refinance or otherwise mortgage or encumber any business or corporation
purchased, sold by, or otherwise considered for purchase by the Company; or
(vi) that Consultant will find or present any business or corporation which
the Company will consider, approve or ultimately purchase or be able to
purchase; or (7) the covenants, representations or warranties of any party
to any stock purchase, asset purchase, merger or other agreement entered
into by the Company with any third party.
10. SUCCESSORS; BINDING AGREEMENTS. Prior to the effectiveness of any
succession (whether direct or indirect, by purchase, merger, consolidation
or otherwise) to all or substantially all of the business and/or assets of
the Company, the Company will require the successor to expressly assume and
agree to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform it if no such succession had
occurred. As used in this Agreement, "Company" shall mean the Company as
defined above and any successor to its business and/or assets which
executes and delivers the Agreement provided for in this Section 10 or
which otherwise becomes bound by all the terms and provisions of this
Agreement by operation of law or otherwise.
11. COUNTERPARTS. This Agreement may be executed in two 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. Any signature by facsimile
shall be valid and binding as if an original signature were delivered.
12. CAPTIONS. The caption headings in this Agreement are for convenience of
reference only and are not intended and shall not be construed as having
any substantive effect.
13. GOVERNING LAW. This Agreement shall be governed, interpreted and construed
in accordance with the laws of the state of California applicable to
agreements entered into and to be performed entirely therein. Any suit,
action or proceeding with respect to this Agreement shall be brought
exclusively in the state courts of the state of California or in the
federal courts of the United States which are located in Los Angeles,
California. The parties hereto hereby agree to submit to the jurisdiction
and venue of such courts for the purposes hereof. Each party agrees that,
to the extent permitted by law, the losing party in a suit, action or
proceeding in connection herewith shall pay the prevailing party its
reasonable attorneys' fees incurred in connection therewith.
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14. ENTIRE AGREEMENT/MODIFICATIONS. This Agreement constitutes the entire
agreement between the parties and supersedes all prior understandings and
agreements, whether oral or written, regarding Consultant's retention by
the Company; provided, however, that all fees previously earned and/or paid
to Consultant under prior agreements shall be deemed earned, and shall be
in addition to any fees payable hereunder. This Agreement shall not be
altered or modified except in writing, duly executed by the parties hereto.
15. WARRANTY. The Company and Consultant each hereby warrant and agree
that each is free to enter into this Agreement, that the parties signing
below are duly authorized and directed to execute this Agreement, and that
this Agreement is a valid, binding and enforceable against the parties
hereto.
16. SEVERABILITY. If any term, covenant or provision, or any part thereof, is
found by any court of competent jurisdiction to be invalid, illegal or
unenforceable in any respect, the same shall not affect the remainder of
such term, covenant or provision, any other terms, covenants or provisions
or any subsequent application of such term, covenant or provision which
shall be given the maximum effect possible without regard to the invalid,
illegal or unenforceable term, covenant or provision, or portion thereof.
In lieu of any such invalid, illegal or unenforceable provision, the
parties hereto intend that there shall be added as part of this Agreement a
term, covenant or provision as similar in terms to such invalid, illegal or
unenforceable term, covenant of provision, or part thereof, as may be
possible and be valid, legal and enforceable.
17. CONFIDENTIALITY. Consultant hereby agrees, and agrees to cause its
officers, directors, shareholders and affiliates ("Consultant's
Representatives") to treat all information received by Consultant or
Consultant's Representatives concerning the Company or its business,
financial condition, prospects and affairs, or Company Objectives, or other
confidential information it may receive in the course of performing
Services (unless already in the public domain through no breach of any duty
owed the Company) as confidential proprietary information and it will not
use, and shall cause all Consultant's Representatives not to use such
information except in connection with the performance of Services
hereunder. In the event this Agreement is Terminated, all such information
shall be returned to the Company.
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IN WITNESS HEREOF, the parties hereto have duly executed and delivered this
Agreement as of the day and year first above written.
CORPORATE FINANCIAL OMNI NUTRACEUTICALS, INC.
ENTERPRISES, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
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President President
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