EXHIBIT 10.14
CONSULTING AGREEMENT
This Consulting Agreement ("Agreement") made to be effective as of February 7,
2008 (the "Effective Date") by and between, RECLAMATION CONSULTING AND
APPLICATIONS, INC., a Colorado corporation, ("RCAI") and XXX XXXXXX CORPORATION,
a California corporation, ("ADVISOR").
WHEREAS, ADVISOR is engaged in the business of general consulting services and
has knowledge, expertise, and personnel to render the requisite services to
RCAI;
WHEREAS, the President of ADVISOR holds various licenses and is actively engaged
as a full time employee of a broker-dealer;
WHEREAS, the Services (defined below) to be performed under this Consulting
Agreement shall: (i) not include any activity requiring a license, (ii) not be
performed during trading hours of the principal securities exchanges of the
United States, or (iii) not effect securities transactions for the account of
others; and
WHEREAS, RCAI is desirous of retaining ADVISOR for the purpose of obtaining the
Services so as to better, more fully, and more effectively deal with the
business community.
NOW, THEREFORE, for good and valuable consideration, including consideration of
the recitals, mutual covenants, and agreements contained herein, it is agreed as
follows:
1. ENGAGEMENT OF ADVISOR. RCAI herewith engages ADVISOR and ADVISOR agrees
to render to RCAI business consulting services (the "Services") described
below.
(a) The Services to be provided by ADVISOR shall include, but are not
limited to, the evaluation of various business strategies and the
recommendation of changes where appropriate, critical evaluations
of RCAI's performance in view of its corporate planning and
business objectives, evaluations of upper management, and the
development, implementation and maintenance of a sound business
and financial advisory strategy which would include:
(i) CORPORATE PLANNING (a) develop an in-depth familiarization
with the RCAI's business objectives and bring to its
attention potential or actual opportunities which meet
those objectives or logical extensions thereof, (b) alert
RCAI to new or emerging high potential forms of production
and distribution which could either be acquired or
developed internally, (c) review and recommend tactics to
secure strong vendor relationships, (d) review and
recommend tactics for aggressive product marketing
strategies, (e) comment on RCAI's corporate development
including such factors as position in competitive
environment, financial performances vs. competition,
strategies, operational viability, etc., and (f) identify
and review prospective suitable merger or acquisition
candidates for the RCAI, perform appropriate diligence
investigations with respect thereto, advise RCAI with
respect to the desirability of pursuing such candidates,
and advise RCAI in any negotiations that may ensue, but
ADVISOR shall not negotiate or structure any transactions
involving the offer, sale or purchase of securities; and
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(ii) COORDINATION OF MARKETING EFFORTS (a) conduct a review of
RCAI's website, business card, power point presentation,
advertising, and marketing materials, (b) suggest and
assist with modifications, as necessary, (c) arrange
appropriate circuit for speaking opportunities with target
market, including speaking engagements to investors and
their advisors, (d) assist, as necessary, with industry and
company specific research reports, and (e) coordinate
direct mail campaigns to target markets and investor
segments.
(b) The Services shall under no circumstances include the following:
(i) Any activities which could be deemed by the Securities and
Exchange Commission to constitute investment banking or any
other activities required by ADVISOR to be registered as a
broker-dealer under the Securities Act of 1934.
(ii) Any activities which could be deemed to be in connection
with the offer or sale of securities in a capital-raising
transaction.
(c) RCAI acknowledges that ADVISOR will devote such time as is
reasonably necessary to perform the services for RCAI, having due
regard for ADVISOR's commitments and obligations to other
businesses for which it performs consulting services.
(d) ADVISOR shall perform the Services to the best of its ability and
in accordance with the highest level of business and professional
ethics.
(e) ADVISOR shall comply with all statutes, ordinances, and
regulations of all federal, state, county, and municipal or local
governments, and of any and all of the departments and bureaus
thereof, applicable to the carrying on of its business and the
conduct of the performance of Services for the RCAI.
(f) During the term of this Agreement, RCAI may periodically request
written reports concerning ADVISOR's progress, project status and
other matters pertaining to his performance of the Services, and
ADVISOR shall promptly provide such reports to RCAI at no
additional charge beyond the compensation set forth in Section 2.
2. COMPENSATION AND EXPENSE REIMBURSEMENT. RCAI shall compensate ADVISOR for
the Services rendered and reimburse expenses incurred by ADVISOR
reasonably necessary for rendering the Services, pursuant to the terms
set forth in Exhibit A, attached hereto and incorporated herein. The
compensation provided in Exhibit A shall constitute full and complete
compensation for the Services.
3. REPRESENTATIONS AND WARRANTIES OF ADVISOR. ADVISOR hereby makes the
following representations and warranties to the other party hereto as
indicated below:
(a) ADVISOR has full capacity to enter into, execute and perform this
Agreement in accordance with its terms;
(b) the person(s) signing on behalf of ADVISOR is the duly authorized
representative of ADVISOR, with full power and authority to enter
into and execute this Agreement on behalf of ADVISOR;
(c) once so executed, this Agreement shall be the valid and binding
Agreement of ADVISOR, enforceable against him by any court of
competent jurisdiction;
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(d) ADVISOR is not bound by or subject to any order, ruling, judgment,
contract, agreement or other arrangement which would prohibit him
from entering into or performing this Agreement, or which requires
the approval or consent of any third party in connection
therewith;
(e) ADVISOR shall comply with all statutes, ordinances, and
regulations of all federal, state, county, and municipal or local
governments, and of any and all of the departments and bureaus
thereof, applicable to the carrying on of its business and the
conduct of the performance of Services for the RCAI;
(f) ADVISOR shall perform the Services to the best of its ability and
in accordance with the highest level of business and professional
ethics.;
(g) ADVISOR possesses the necessary education, background and
experience to perform successfully all of the Services, and there
is nothing which is not expressly called for in this Agreement
which ADVISOR shall require in order to complete the performance
of such Services in the time allotted; and
(h) with respect to the any shares of RCAI stock, warrants for the
purchase of RCAI stock, and shares of RCAI stock underlying such
warrants (collectively the "Securities") which may be received by
ADVISOR as compensation hereunder:
(i) ADVISOR is acquiring such Securities for its own account,
and not with a view toward the subdivision, resale,
distribution, or fractionalization thereof; ADVISOR has no
contract, undertaking, or arrangement with any person to
sell, transfer, or otherwise dispose of such Securities (or
any portion thereof hereby subscribed for), and has no
present intention to enter into any such contract,
undertaking, agreement or arrangement;
(ii) the receipt of such Securities by ADVISOR is not the result
of any form of general solicitation or general advertising;
(iii) ADVISOR hereby acknowledges that: (A) the offering of such
Securities was made only through direct, personal
communication between ADVISOR and RCAI; (B) ADVISOR has had
full access to material concerning RCAI's planned business
and operations, which material was furnished or made
available to ADVISOR by officers or representatives of
RCAI; (C) RCAI has given ADVISOR the opportunity to ask any
questions and obtain all additional information desired in
order to verify or supplement the material so furnished;
and (D) ADVISOR understands and acknowledges that an
investor in the Securities must be prepared to bear the
economic risk of such investment for an indefinite period
because of: (I) the heightened nature of the risks
associated with an investment in RCAI due to its status as
a development stage company; (II) illiquidity of such
Securities due to the fact that (1) such Securities have
not been registered under the Securities Act of 1933 (the
"ACT") or any state securities act (nor passed upon by the
SEC or any state securities commission), and (2) such
Securities may not be registered or qualified by ADVISOR
under federal or state securities laws solely in reliance
upon an available exemption from such registration or
qualification, and hence such Securities cannot be sold
unless they are subsequently so registered or qualified, or
are otherwise subject to any applicable exemption from such
registration requirements; and (3) substantial restrictions
on transfer of such Securities, as set forth by legend on
the face or reverse side of every certificate evidencing
the ownership of such Shares;
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(iv) ADVISOR recognizes that an agreement to accept Securities
is in lieu of (or in addition to) cash payment for services
rendered is a securities transaction, and has determined
that it is a suitable investor in RCAI as fully as if
ADVISOR were paying cash to subscribe for such securities
as an investor in RCAI; and
(v) ADVISOR has been advised to consult with an attorney
regarding legal matters concerning the purchase and
ownership of such securities, and with a tax advisor
regarding the tax consequences of purchasing such
securities.
4. TERM AND TERMINATION. This Agreement shall be for a term of one (1) year,
but at the election of both parties, can be extended for one additional
term of three (3) months. After April 30, 2008, either party shall have
the right to terminate this Agreement by providing 30-day prior written
notice to the other party, provided however in the event either party
breaches its obligations under this Agreement, in such event the other
party may immediately terminate the Agreement without prior notice. The
compensation set forth in Exhibit A shall adjust proportionately based
upon any termination of this agreement prior to February 6, 2009.
5. CONFIDENTIALITY.
(a) ADVISOR hereby represents and warrants to the RCAI that the
performance of the Services by ADVISOR will not violate any
proprietary rights of third parties, including, without
limitation, patents, copyrights, trade or service marks or trade
secrets, and that ADVISOR's Services to the RCAI hereunder will
not violate any obligations or confidential relationships (whether
created by contract or by operation of law) which ADVISOR may have
to/with any third party. ADVISOR agrees to indemnify, defend and
hold harmless the RCAI, its officers, directors, employees, agents
and representatives from and against any and/or all liability,
loss, cost and expense (including reasonable attorneys' fees and
court costs), causes of action, claims or demands arising out of
ADVISOR's breach of its representations, warranties and covenants
made herein.
(b) ADVISOR agrees to hold in trust and confidence all of the
information regarding the RCAI's business, the Services performed
hereunder and the results thereof (i) disclosed by RCAI, its
agents or employees to ADVISOR hereunder; (ii) obtained from the
RCAI or otherwise learned as a result of the Services performed
for the RCAI, and/or (iii) used as a basis for and/or contained in
any reports prepared by ADVISOR for the RCAI hereunder (the
"Confidential Information"). The existence and substance of this
Agreement shall be included as Confidential Information. ADVISOR
will not disclose all or any part of the Confidential Information
to any third party nor make any press release regarding the
existence of this Agreement nor make any commercial or other use
thereof without the prior written consent of the RCAI provided,
however, that ADVISOR may use the RCAI's name as a trade
reference.
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(c) It is understood, however, that the foregoing restrictions in
Section 5(b) above shall not apply to any portion of the
Confidential Information which ADVISOR can clearly demonstrate
falls within any of the following categories: (i) information that
as of the time of disclosure to ADVISOR, was already known to
ADVISOR without obligation of confidentiality, as demonstrated by
appropriate documentary evidence antedating the relationship
between ADVISOR and the RCAI; (ii) information obtained after the
date hereof by ADVISOR from a third party which is lawfully in
possession of such information and not in violation of any
contractual or legal obligation to the RCAI to maintain
confidentiality with respect to such information; or (iii)
information which is or becomes part of the public domain through
no fault of the RCAI or its employees.
(d) ADVISOR agrees to restrict access to all of the Confidential
Information within his organization to only such limited group of
authorized employees and/or agents who (i) require such
information in connection with their activities as contemplated by
this Agreement, and (ii) have agreed in writing with ADVISOR to
maintain the confidential nature of all proprietary information -
including that of third parties - received by them in the course
of their employment or engagement.
(e) Upon termination of this Agreement, or earlier upon the RCAI's
request, ADVISOR shall deliver all items containing any
Confidential Information to the RCAI or make such other
disposition thereof as the RCAI may direct, and shall certify to
the RCAI that it has retained no copies of the same.
(f) Disclosure of Confidential Information to ADVISOR hereunder shall
not constitute any option, grant or license to ADVISOR under any
patent or other rights now or hereinafter held by the RCAI, its
subsidiaries, or any of its affiliated companies to use or exploit
the same for any purpose.
6. REPRESENTATION BY ADVISOR OF OTHER CLIENTS. RCAI acknowledges and
consents to ADVISOR rendering similar business consultation services to
other clients, provided that this does not impede ADVISOR's ability to
perform the Services or its other obligations hereunder, or to carry out
its responsibilities to RCAI hereunder, provided however, that for the
entire term of this Agreement, ADVISOR shall not provide services, for
its own account or to any other party, in the development or production
of any product which directly competes with the specific product or
products of RCAI for which ADVISOR shall provide Services hereunder.
7. INDEMNIFICATION BY RCAI. RCAI acknowledges that ADVISOR, in the
performance of its duties, will be required to rely upon the accuracy and
completeness of information supplied to it by RCAI's officers, directors,
agents and/or employees. RCAI agrees to indemnify, hold harmless and
defend ADVISOR, its officers, agents and/or employees from any proceeding
or suit which arises out of or is due to the inaccuracy or incompleteness
of any material or information negligently supplied by RCAI to ADVISOR.
8. INDEMNIFICATION BY ADVISOR. ADVISOR agrees to indemnify, hold harmless
and defend RCAI and its officers, agents and/or employees against any
damages that arise out or in connection with any breach by ADVISOR of the
terms of this Agreement or any negligence or malfeasance by ADVISOR in
connection with the Services.
9. INDEPENDENT CONTRACTOR. It is expressly agreed that ADVISOR is acting as
an independent contractor in performing its services hereunder. RCAI
shall not carry workers compensation insurance or any health or accident
insurance on ADVISOR or ADVISOR'S employees. RCAI shall not pay any
contributions to social security, unemployment insurance, Federal or
state withholding taxes nor provide any other contributions or benefits
that might be customary in an employer-employee relationship.
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10. SURVIVAL. The obligations of ADVISOR under Section 5 expressly shall
survive the termination/expiration of this Agreement.
11. EQUITABLE RELIEF. The parties expressly acknowledge to and agree with
each other that in the event certain of the promises and covenants of the
ADVISOR contained herein were to be breached, it should result in
irreparable injury to RCAI for which monetary damages may not be adequate
or ascertainable. In such event, RCAI shall be entitled to seek specific
performance, injunctive or other equitable relief, and such rights and
remedies of RCAI shall be cumulative and non-exclusive, and in addition
to all other of RCAI's rights and remedies available at law and/or equity
hereunder.
12. NON-ASSIGNMENT. This Agreement shall not be assigned by either party
without the written consent of the other party.
13. NOTICES. Any notice to be given by either party to the other hereunder
shall be sufficient if in writing and sent by registered or certified
mail, return receipt requested, addressed to such party at the last known
address of the other party or such other address as either party may have
given to the other in writing.
14. ENTIRE AGREEMENT. This Agreement contains the entire agreement and
understanding between the parties with regard to the subject matter
therein and supersedes all prior negotiations, agreements and discussions
concerning such subject matter.
15. MODIFICATION AND WAIVER. This Agreement may not be altered or modified
except by writing signed by each of the respective parties hereof. No
breach or violation of this Agreement shall be waived except in writing
executed by the party granting such waiver.
16. LAW TO GOVERN; FORUM FOR DISPUTES. This Agreement shall be governed by
the laws of California without giving effect to the principle of conflict
of laws. Each party acknowledges to the other that courts within Orange
County, California shall be the sole and exclusive forum to adjudicate
any disputes arising under this agreement.
IN WITNESS WHEREOF, the parties have executed this agreement as of the day and
year first written above.
RECLAMATION CONSULTING AND APPLICATIONS, INC.
By: /S/ XXXX XXXXXX
-----------------------------------------
Name: Xxxx Xxxxxx
Title: Chief Executive Officer
XXX XXXXXX CORPORATION
By: /S/ XXX XXXXXX
-----------------------------------------
Name: Xxx Xxxxxx
Title: President
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EXHIBIT A
TO
CONSULTING AGREEMENT
PAYMENT FOR SERVICES
AND REIMBURSEMENT OF EXPENSES
A. For the services to be rendered by ADVISOR during the term of the
Agreement, RCAI shall pay to ADVISOR the sum of $15,000 per month, in advance,
plus all reasonable and necessary out of pocket expenses actually and reasonably
incurred by ADVISOR in performing the Services. ADVISOR shall obtain written
approval before incurring expenses greater than $750 per month. With respect to
reimbursement of such expenses, and for RCAI's record-keeping and tax purposes,
ADVISOR shall keep an account book in which ADVISOR shall record at or near the
time that each expenditure is made, the amount of the expenditure; time and
place of the expenditure; business reason, if any, for the expenditure;
information concerning the expense's business relationships to ADVISOR; and
documentation or receipts of the expenditures. Expense reports shall be tendered
monthly with the supporting information identified and ADVISOR shall be
reimbursed for qualifying expenses within thirty (30) days.
B. As additional compensation , during the term of the Agreement, RCAI
agrees to:
(i) issue ADVISIOR shares of its restricted common stock with a Rule
144 legend as follows: (a) 250,000 shares immediately following the proposed 1:2
proposed reverse split; (b) 250,000 shares on or before June 30, 2008; (c)
250,000 shares on or before September 30, 2008; and (d) 250,000 shares on or
before December 31, 2008.
(ii) issue ADVISOR, on a form of warrant certificate mutually agreed to
by the parties, immediately following the planned 1:2 proposed reverse split of
RCAI's common stock, One Million (1,000,000) one year common stock purchase
warrants ("Warrants") that shall consist of (a) the right to purchase 250,000
shares at an exercise price of $.35 per share; (b) the right to purchase 250,000
share at an exercise price of $.45 per share; (c) the right to purchase 250,000
shares at an exercise price of $.55 per share; and (d) the right to purchase
250,000 shares at an exercise price of $.65 per share. The Warrants shall vest
proportionately during term of the Agreement at the rate of 1/12th per month. No
adjustments to the number of shares issuable on exercise of the Warrants or the
exercise price of the Warrants shall be made on any reverse split of RCAI's
common stock.
C. The compensation set forth in this Exhibit A shall adjust
proportionately based upon any termination of this Agreement prior to January
31, 2009. In the event, the Agreement is terminated by either party prior to the
one year anniversary of the Effective Date, ADVISOR shall in no event be
entitled to keep more then a number of shares equal to the number of days of the
term multiplied by 2739 and shall promptly return any excess number of shares to
RCAI. ADVISOR understands that completion of the 1:2 reverse split by RCAI is
subject to shareholder approval and the requisite approvals of Federal and state
regulators. RCAI cannot provide any assurance that the 1:2 reverse split will
happen by any particular time, or at all.
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