EXHIBIT 10.14
ADVISORY AGREEMENT
THIS ADVISORY AGREEMENT (the "Agreement") is made this 12th day of November,
1999, by and between ▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, a Utah resident ("Advisor") and
C-3D Digital, Inc., a Utah corporation with its offices located in Salt Lake
City, Utah (the "Company").
WHEREAS, Advisor and Advisors's Personnel (as defined below) have experience
in evaluating and effecting mergers and acquisitions, advising corporate
management, and in performing general administrative duties for publicly-held
companies and development stage investment ventures; and
WHEREAS, the Company desires to retain the Advisor to advise and assist the
Company in its development on the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the Company and
Advisor agree as follows:
1. ENGAGEMENT
The Company hereby retains Advisor, effective as of the date hereof
(the "Effective Date") and continuing until termination, as provided
herein, to assist the Company in its effecting the purchase of
businesses and assets relative to its business and growth strategy,
general business consulting, introductions of the Company to persons or
companies that may have an interest in the technology of the Company,
including but not limited to computer and Internet related operations,
motion picture and television companies and consultants and others that
may assist the Company in its plans and future development (the
"Services"). The Services are to be provided on a "best efforts" basis
directly by Advisor and through others employed or retained and under
the direction of Advisor ("Advisor's Personnel"); PROVIDED, HOWEVER,
that the Services shall expressly exclude all legal advice, accounting
services or other services which require licenses or certification
which Advisor may not have.
2. TERM
This agreement shall have an initial term of one (1) year (the "Primary
Term"), commencing with the Effective Date. At the conclusion of the
Primary Term this Agreement will be extended on an annual basis (the
"Extension Period") by mutual agreement of the parties.
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3. TIME AND EFFORT OF ADVISOR
Advisor shall allocate time and Advisor's Personnel as it deems
necessary to provide the Services. The particular amount of time may
vary from day to day or week to week. Except as otherwise agreed,
Advisor's monthly statement identifying, in general, tasks performed
for the Company shall be conclusive evidence that the Services have
been performed. Additionally, in the absence of willful misfeasance,
bad faith, negligence or reckless disregard for the obligations or
duties hereunder by Advisor, neither Advisor nor Advisor's Personnel
shall be liable to the Company or any of its shareholders for any act
or omission in the course of or connected with rendering the Services,
including but not limited to losses that may be sustained in any
corporate act in any subsequent Business Opportunity (as defined
herein) undertaken by the Company as a result of advice provided by
Advisor or Advisors's Personnel.
4. COMPENSATION
The Company agrees to pay Advisor a single one-time fee for the
Services ("Advisory Fee") by way of the delivery by the Company of One
Hundred Thousand (100,000) shares of the Company's common stock,
registered pursuant to a Form S-8, without restrictions. Such shares
shall be delivered upon the filing date of the Form S-8 registration
date, which shall be within 10 days of the date of the execution of
this Agreement. All shares transferred are considered fully earned and
non-assessable as of the date of delivery.
5. OTHER SERVICES
If the Company (i) enters into a merger or (ii) exchanges securities
with, or (iii) purchases the assets or enters into a joint venture
with, or (iv) makes an investment in a company introduced by Advisor (a
"Business Opportunity"), the Company agrees to pay Advisor a fee equal
to ten percent (10%) of the value of each Business Opportunity
introduced by Advisor and acquired or otherwise participated in by the
Company (collectively referred to herein, in each instance, as the
"Transaction Fee"). Except as provided in Section 6 below, the
Transaction Fee shall be payable immediately following the closing of
each such transaction, in cash or in shares of the Company's common
stock or in kind, if an acquisition is made at the Company's option. A
Transaction Fee will not be paid except for the specific actions
enumerated in this Section 5.
6. REGISTRATION RIGHTS FOR TRANSACTION FEE SHARES
The Company may, at its sale election, choose to issue shares of its
common stock to satisfy a Transaction Fee. The Company agrees that any
shares issued to satisfy a Transaction Fee shall be benefitted by the
registration rights of this Section 6. If, after
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issuing shares to the Advisor to satisfy a Transaction Fee, the Company
proposes to register any of its stock under the Securities Act of 1933
(the "Act") in connection with the public offering of such securities
solely for cash (other than a registration relating solely to the sale
of securities to participants in a Company stock plan, or a
registration on any form which does not include substantially the same
information as would be required to be included in a registration
statement covering the sale of the Transaction Fee Shares) the Company
shall, at such time, promptly give the Advisor written notice of such
registration. Upon the written request of the Advisor given within
fifteen (15) days after mailing of such notice by the Company, the
Company shall, subject to the provisions of this section, use its
reasonable efforts to cause to be registered under the Act all of the
Transaction Fee Shares that the Advisor has requested to be registered.
In connection with any registrations in which the Transaction Fee
Shares have a right to be included pursuant to this section, and which
involve an underwriting of securities being issued by the Company, the
Company shall not be required to include any of the Transaction Fee
Shares in such underwriting unless the Advisor accepts the terms of the
underwriting as agreed upon between the Company and the underwriters
selected by it. It shall be a condition precedent to the obligations of
the Company to take any action pursuant to this section that the
Advisor shall furnish to the Company such information regarding
herself, the Transaction Fee Shares held by her, and the intended
method of disposition of such securities as shall be required to effect
the registration of her shares.
7. COSTS AND EXPENSES
All third party and out-of-pocket expenses incurred by Advisor in the
performance of the Services shall be paid by the Company, or Advisor
shall be reimbursed if paid by Advisor on behalf of the Company, within
ten (10) days of the receipt of written notice by Advisor, provided
that the Company must approve in advance all such expenses in excess of
$100 per month.
8. PLACE OF SERVICES
The Services provided by Advisor or Advisor's Personnel hereunder will
be performed at Advisor's offices except as otherwise mutually agreed
by Advisor and the Company.
9. INDEPENDENT CONTRACTOR
Advisor and Advisor's Personnel will act as independent contractors in
the performance of the duties under this Agreement. Accordingly,
Advisor will be responsible for payment of all federal, state, and
local taxes on compensation paid under this agreement, including
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income and social security taxes, unemployment insurance, and any other
taxes due relative to Advisor's Personnel, and any and all business
license fees as may be required. This Agreement neither expressly NOR
impliedly creates a relationship of principal and agent, or employee
and employer, between Advisor's Personnel and the Company. Neither
Advisor nor Advisor's Personnel are authorized to enter into any
agreements on behalf of the Company. The Company expressly retains the
right to approve, in its sole discretion and to make all final
decisions with respect to effecting, a transaction on any Business
Opportunity.
10. REJECTED ASSET OPPORTUNITY OR BUSINESS OPPORTUNITY
If, during the Primary Term of this Agreement or any Extension Period,
the Company elects not to proceed to acquire, participate or invest in
any Business Opportunity identified and/or selected by Advisor,
notwithstanding the time and expense the Company may have incurred
reviewing such transaction, such Business Opportunity shall revert back
to and become proprietary to Advisor, and Advisor shall be entitled to
acquire or broker the sale or investment in such rejected Business
Opportunity for its own account, or submit such assets or Business
Opportunity elsewhere. In such event, Advisor shall be entitled to any
and all profits or fees resulting from Advisor's purchase, referral or
placement of any such rejected Business Opportunity, or the Company's
subsequent purchase or financing with such Business Opportunity in
circumvention of Advisor.
11. NO AGENCY EXPRESS OR IMPLIED
This Agreement neither expressly nor impliedly creates a relationship
of principal and agent between the Company and Advisor, or employee and
employer as between Advisor's Personnel and the Company.
12. TERMINATION
The Company and Advisor may terminate this Agreement prior to the
expiration of the Primary Term upon thirty (30) days written notice
with mutual written consent. Failing to have mutual consent, without
prejudice to any other remedy to which the terminating party may be
entitled, if any, either party may terminate this agreement with thirty
(30) days written notice under the following conditions:
(A) BY THE COMPANY.
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(i) If during the Primary Term of this Agreement or any
Extension Period, Advisor is unable to provide the
Services as set forth herein for thirty (30)
consecutive business days because of illness,
accident, or other incapacity of Advisor's Personnel;
or,
(ii) If Advisor willfully breaches or neglects the duties
required to be performed hereunder; or,
(B) BY ADVISOR.
(i) If the Company breaches this Agreement of fails to
make any payments or provide information required
hereunder; or,
(ii) If the Company ceases business or, other than in an
Initial Merger, sells a controlling interest to a
third party, or agrees to a consolidation or merger
of itself with or into another corporation, or enters
into such a transaction outside of the scope of this
Agreement, or sells substantially all of its assets
to another corporation, entity or individual outside
of the scope of this Agreement; or,
(iii) If the Company, subsequent to the execution hereof,
has a receiver appointed for its business or assets,
or otherwise becomes insolvent or unable to timely
satisfy its obligations in the ordinary course of its
business, including but not limited to the obligation
to pay the Transaction Fee, or the Advisory Fee; or,
(vi) If the Company, subsequent to the execution hereof,
institutes, makes a general assignment for the
benefit of creditors, has instituted against it any
bankruptcy proceeding for reorganization or
rearrangement of its financial affairs, files a
petition in a court of bankruptcy, or is adjudicated
a bankrupt; or,
(v) If any of the disclosures made herein or subsequent
hereto by the Company to Advisor are determined to be
materially false or misleading.
In the event Advisor elects to terminate without cause or this
Agreement is terminated prior to the expiration of the Primary Term or
any Extension Period by mutual written agreement, or by the Company for
the reasons set forth in A(i) and (ii) above, the Company shall only be
responsible to pay Advisor for un-reimbursed expenses and (during
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the Primary Term) the Advisory Fee accrued up to and including the
effective date of termination. If this Agreement is terminated by the
Company for any other reason, or by Advisor for reasons set forth in
B(i) through (v) above, Advisor shall be entitled to any outstanding
unpaid portion of reimbursable expenses, if any, and the balance of the
Advisory Fee.
13. INDEMNIFICATION
Subject to the provisions herein, the Company and Advisor agree to
indemnify, defend and hold each other harmless from and against all
demands, claims, actions, losses, damages, liabilities, costs and
expenses, including without limitation, interest, penalties and
attorneys' fees and expenses asserted against or imposed or incurred by
either party by reason of or resulting from any action or a breach of
any representation, warranty, covenant, condition, or agreement of the
other party to this Agreement.
14. REMEDIES
Advisor and the Company acknowledge that in the event of a breach of
this Agreement by either party, money damages would be inadequate and
the non-breaching party would have no adequate remedy at law.
Accordingly, in the event of any controversy concerning the rights or
obligations under this Agreement, such rights or obligations shall be
enforceable in a court of equity by a degree of specific performance.
Such remedy, however, shall be cumulative and nonexclusive and shall be
in addition to any other remedy to which the parties may be entitled.
15. MISCELLANEOUS
(A) SUBSEQUENT EVENTS. Advisor and the Company each agree to
notify the other party if, subsequent to the date of this
Agreement, either party incurs obligations which would
compromise its efforts and obligations under this Agreement.
(B) AMENDMENT. This Agreement may be amended or modified at any
time and in any manner only by an instrument in writing
executed by the parties hereto.
(C) FURTHER ACTIONS AND ASSURANCES. At any time and from time to
time, each party agrees, at its or their expense, to take
actions and to execute and deliver documents as may be
reasonably necessary to effectuate the purposes of this
Agreement.
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(D) WAIVER. Any failure of any party to this Agreement to comply
with any of its obligations, agreements, or conditions
hereunder may be waived in writing by the party to whom such
compliance is owed. The failure of any party to this Agreement
to enforce at any time any of the provisions of this Agreement
shall in no way be construed to be a waiver of any such
provision or a waiver of the right of such party thereafter to
enforce each and every such provision. No waiver of any breach
of or noncompliance with this Agreement shall be held to be a
waiver of any other subsequent breach or noncompliance.
(E) ASSIGNMENT. Neither this Agreement nor any right created by
it shall be assignable by either party without prior written
consent of the other.
(F) NOTICES. Any notice or other communication required or
permitted by this Agreement must be in writing and shall be
deemed to be properly given when delivered in person to an
officer of the other party, when deposited in the United
States mails for transmittal by certified or registered mail,
postage prepaid, or when deposited with a public telegraph
company for transmittal, or when sent by facsimile
transmission charges prepared, provided that the communication
is addressed:
(i) In the case of the Company:
C-3D Digital, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: J. ▇▇▇▇▇▇▇ ▇▇▇▇
(ii) In the case of the Advisor:
▇▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefax: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other person or address designated in writing by the Company
or Advisor to receive notice.
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(G) HEADINGS. The section and subsection headings in this
Agreement are inserted for convenience only and shall not
affect in any way the meaning or interpretation of this
Agreement.
(H) GOVERNING LAW. This Agreement was negotiated and is being
contracted for in Utah, and shall be governed by the laws of
the State of Utah, and the United States of America,
notwithstanding any conflict-of-law provision to the contrary.
(I) BINDING EFFECT. This Agreement shall be binding upon the
parties hereto and inure to the benefit of the parties, their
respective heirs, administrator, executors,
successors, and assigns.
(J) ENTIRE AGREEMENT. This Agreement contains the entire
agreement between the parties hereto and supercedes any and
all prior agreements, arrangements, or understandings
between the parties relating to the subject matter of this
Agreement. No oral understandings, statements, promises, or
inducements contrary to the terms of this Agreement exists.
No representations, warranties, covenants, or conditions,
express or implied, other than as set forth herein, have
been made by any party.
(K) SEVERABILITY. If any part of this Agreement is deemed to be
unenforceable the balance of the Agreement shall remain in
full force and effect.
(L) COUNTERPARTS. A facsimile, telecopy, or other reproduction of
this Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same
instrument, by one or more parties hereto and such executed
copy may be delivered by facsimile or similar instantaneous
electronic transmission device pursuant to which the signature
of, or on behalf of, such party can be seen. In this event,
such execution and delivery shall be considered valid, binding
and effective for all purposes. At the request of any party
hereto, all parties agree to execute an original of this
Agreement as well as any facsimile, telecopy or other
reproduction hereof.
(M) TIME IS OF THE ESSENCE. Time is of the essence of this
Agreement and of each and every provision hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date above written.
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The "Company" "Advisor"
C-3D Digital, Inc. ▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
A Utah Corporation A Utah Resident
By: By: /s/ ▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------- --------------------------------
Name: Name: ▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Title:
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