CONSULTING AGREEMENT
This CONSULTING AGREEMENT (the "AGREEMENT"), is entered into as of the
_____ day of July, 2000, by and between FUSION NETWORKS, INC., a Delaware
corporation (the "COMPANY"), and BIG DOG VENTURES, INC. (the "CONSULTANT").
W I T N E S S E T H:
WHEREAS, the COMPANY is a provider of Internet portal technology,
applications and content designed to enable corporate customers to develop
effective Spanish, English and Portuguese-related Internet strategies;
WHEREAS, the CONSULTANT has extensive contacts with cultural, service and
municipal groups ("Potential Clients");
WHEREAS, the COMPANY and the CONSULTANT desire to enter into an independent
consultant relationship pursuant to which CONSULTANT will render valuable
services (the "Services") to the COMPANY in connection with the introduction of
the COMPANY to Potential Clients for the purpose of licensing co-branded
Internet portals; and
WHEREAS, this AGREEMENT governs the relationship between the parties from
and after the date hereof, and supersedes all previous agreements between them,
either written or oral, heretofore made.
NOW, THEREFORE, in consideration of the premises and the mutual covenants,
agreements and promises hereinafter set forth, the parties hereto hereby agree
as follows:
AGREEMENT
ARTICLE I
CONSULTING SERVICES
Section 1.1. Nature of Services. CONSULTANT shall assist the COMPANY by
providing marketing Services with the Marketing Territory defined in Section 1.3
below. CONSULTANT shall introduce the COMPANY to Potential Clients with the
objective of securing licenses to develop and operate Internet portals
("Portals") within the Marketing Territory.
Section 1.2 Independent Contractor Relationship. The COMPANY and the
CONSULTANT acknowledge that the relationship between and among themselves is
that of an "independent contractor". As such, neither party shall assert that
the CONSULTANT is an employee of the COMPANY, and each party affirms that none
of the benefits or obligations associated with an employer/employee relationship
exists. Further, the CONSULTANT shall have no authority to bind the COMPANY to
any contract and shall not hold itself out as having such capacity.
Section 1.3 Marketing Territory. The "Marketing Territory" shall be the
Tri-County region known as South Florida, which encompasses Miami-Dade, Broward
and Palm Beach Counties. Contractor shall have the right of first refusal to any
development in this region.
ARTICLE II
FEES
Section 2.1. Portal Fees. COMPANY shall pay CONSULTANT $25,000 for each
Portal licensed by the COMPANY by a Potential Client introduced by the
CONSULTANT (the "Portal Fee"). Portal Fees shall be payable on the last business
day of each calendar month in which a definitive licensing agreement(s) is
executed relative to a Portal (the "Payment Date") and shall be payable in
shares of common stock of the COMPANY based on the closing price of the common
stock on the Payment Date. Shares of common stock issuable as payment of the
Portal Fee shall be delivered within five (5) business days after each Payment
Date. Unless a registration statement is then in effect with respect to said
shares, certificates evidencing shares issued in payment of the Portal Fee shall
bear a legend indicating that such shares may not be resold except pursuant to,
and in compliance with, an applicable exemption from the registration
requirements of the Securities Act of 1933 (the "Securities Act").
Section 2.2. Stock Option. COMPANY shall grant to CONSULTANT, on the date
hereof, a non-qualified stock option (the "Option") exercisable for a period of
five years to purchase 25,000 shares of common stock of the COMPANY at the
closing price of the COMPANY's common stock on the date hereof. The Option shall
survive termination of this Agreement.
Section 2.3. Additional Fees. If, in the course of delivering Services
hereunder, parties introduced to the COMPANY by the CONSULTANT provide funding
to the COMPANY, the COMPANY shall pay to the CONSULTANT a fee(s) (the
"Additional Fee") in an amount not to exceed ten percent (10%) of the funding so
provided, or such other amount as the parties hereto may negotiate from time to
time.
Section 2.4. Expense Reimbursement. COMPANY shall reimburse CONSULTANT for
all reasonable expenses related to the performance of Services provided that the
COMPANY shall have approved such expenses in advance in writing. CONSULTANT
shall provide a written accounting and explanation of all expenses for which
reimbursement is sought on a monthly basis and the COMPANY shall reimburse all
such expenses within thirty (30) days following receipt of each written
accounting and supporting documentation.
ARTICLE III
TERM
The term of this Agreement shall commence on the date hereof and shall run
for two years thereafter (the "Term"). The COMPANY may terminate this Agreement
without cause at any time by giving ninety (90) days advance notice in writing.
2
ARTICLE IV
REPRESENTATIONS OF THE COMPANY
The COMPANY represents to CONSULTANT that:
(i) The COMPANY is duly authorized to enter into this Agreement and to
carry out the terms set out herein and that execution of this Agreement and
carrying out of the terms hereof will not breach any provision of the articles
of incorporation or bylaws of the COMPANY or any contracts to which the COMPANY
is a party.
(ii) The execution of this Agreement will create a valid and binding
obligation on the part of the COMPANY enforceable in accordance with the terms
hereof, except as may be limited by bankruptcy, insolvency, moratorium or
similar laws.
ARTICLE V
REPRESENTATIONS OF CONSULTANT
CONSULTANT represents to the COMPANY that:
(i) CONSULTANT, its agents and employees, will not disclose to any third
party any proprietary information relating to the business of the COMPANY which
may come into CONSULTANT's possession in the course of rendering Services
without the prior written consent of the COMPANY and will turn over to the
COMPANY all materials of any nature relating to the COMPANY, its services or
business, including all work product created as a result of the CONSULTANT's
performance of this Agreement, upon termination of this Agreement. CONSULTANT
acknowledges that in the course of performing Services it will come into
possession of information which is considered proprietary to the COMPANY and
CONSULTANT will use its best efforts to maintain the confidentiality of such
information.
(ii) CONSULTANT will not use, publish or allow the use of the COMPANY's
name or any trade name or trade xxxx owned or licensed by the COMPANY in
connection with any oral or written publication without the express prior
written consent of the COMPANY.
(iii) CONSULTANT acknowledges that any and all works prepared under this
Agreement and fixed in any tangible medium of expression (including, without
limitation, reports, drawings, records, notebooks, manuals, computer programs
and printouts) shall be the exclusive property of the COMPANY and shall be
delivered to the COMPANY at any time upon its request. CONSULTANT hereby
transfers to the COMPANY ownership of any copyright for any such work and waives
all moral rights in any such work.
(iii) The execution of this Agreement will create a valid and binding
obligation on the part of CONSULTANT enforceable in accordance with the terms
hereof, except as may be limited by bankruptcy, insolvency, moratorium or
similar laws.
3
ARTICLE VI
PIGGYBACK REGISTRATION RIGHTS
(i) The COMPANY covenants and agrees with the CONSULTANT that if, at any
time during the term of this Agreement, it proposes to file a registration
statement with respect to any class of equity or equity-related security (other
than in connection with an offering to the Company's employees or in connection
with an acquisition, merger or similar transaction) under the Securities Act in
a primary registration on behalf of the COMPANY and/or in a secondary
registration on behalf of holders of such securities and the registration form
to be used may be used for registration of the shares of common stock issuable
as payment of the Portal Fee and the shares of common stock underlying the
Option (collectively, the "Registrable Securities"), the COMPANY will give
prompt written notice (which, in the case of a registration statement pursuant
to the exercise of demand registration rights shall be within ten (10) business
days after the COMPANY's receipt of notice of such exercise and, in any event,
shall be at least 30 days prior to such filing) to the holders of Registrable
Securities at the addresses appearing on the records of the COMPANY of its
intention to file a registration statement and will offer to include in such
registration statement all, but not less than 20% of the Registrable Securities,
subject to paragraphs (a) and (b) of this Article VI(i), such number of
Registrable Securities with respect to which the COMPANY has received written
requests for inclusion therein within ten (10) days after the giving of notice
by the COMPANY. All registrations requested pursuant to this Article VI are
referred to herein as "Piggyback Registrations". All Piggyback Registrations
pursuant to this Article VI will be made solely at the COMPANY's expense. This
Article is not applicable to a registration statement filed by the COMPANY on
Forms S-4 or S-8 or any successor forms.
(a) Priority on Primary Registrations. If a Piggyback Registration includes
an underwritten primary registration on behalf of the COMPANY and the
underwriter(s) for such offering determines in good faith and advises the
COMPANY in writing that in its/their opinion the number of Registrable
Securities requested to be included in such registration exceeds the number that
can be sold in such offering without materially adversely affecting the
distribution of such securities by the COMPANY, the COMPANY will include in such
registration (1) first, the securities that the COMPANY proposes to sell and (2)
second, the Registrable Securities requested to be included in such
registration, apportioned pro rata among the holders of the Registrable
Securities and holders of other securities requesting registration.
(b) Priority on Secondary Registrations. If a Piggyback Registration
consists only of an underwritten secondary registration on behalf of holders of
securities of the COMPANY, and the underwriter(s) for such offering advises the
COMPANY in writing that in its/their opinion the number of Registrable
Securities requested to be included in such registration exceeds the number
which can be sold in such offering without materially adversely affecting the
distribution of such securities, the COMPANY will include in such registration
(1) first, the securities requested to be included therein by the holders
requesting such registration, and (2) second, the Registrable Securities
requested to be included in such registration and securities of holder of other
securities requested to be included in such registration statement, pro rata
among all such holders on the basis of the number of shares requested to be
included by each such holder, provided, however, the COMPANY will use its best
efforts to include not less than 20% of the Registrable Securities.
4
Notwithstanding the foregoing, if any such underwriter shall determine in good
faith and advise the COMPANY in writing that the distribution of the Registrable
Securities requested to be included in the registration concurrently with the
securities being registered by the COMPANY would materially adversely affect the
distribution of such securities by the COMPANY, then the holders of such
Registrable Securities shall delay their offering and sale for such period
ending on the earliest of (x) 90 days following the effective date of the
COMPANY's registration statement, (y) the day upon which the underwriting
syndicate, if any, for such offering shall have been disbanded or, (z) such date
as the COMPANY, managing underwriter and holders of Registrable Securities shall
otherwise agree. In the event of such delay, the COMPANY shall file such
supplements, post-effective amendments and take any such other steps as may be
necessary to permit such holders to make their proposed offering and sale for a
period of 120 days immediately following the end of any such period of delay. If
any party disapproves the terms of any such underwriting, it may elect to
withdraw therefrom by written notice to the COMPANY, the underwriter, and the
holder. Notwithstanding the foregoing, the COMPANY shall not be required to file
a registration statement to include shares pursuant to this Article VI if
independent counsel, reasonably satisfactory to the COMPANY, renders an opinion
to the COMPANY that the Registrable Securities proposed to be disposed of may be
transferred pursuant to the provisions of Rule 144 under the Securities Act or
otherwise without registration under the Securities Act.
(ii) In connection with the registration of Registrable Securities
hereunder, the COMPANY agrees to (a) bear the expenses of any registration;
provided, however, that in no event shall the COMPANY be obligated to pay (1)
any fees and disbursements of special counsel for holders of Registrable
Securities, (2) any underwriters' discount or commission in respect of such
Registrable Securities, and (3) any stock transfer taxes attributable to the
sale of the Registrable Securities; (b) use its best efforts to register or
qualify the Registrable Securities for offer or sale under state securities or
Blue Sky laws of such jurisdictions in which such holders shall reasonably
request, provided, however, that no qualification shall be required in any
jurisdiction where, as a result thereof, the COMPANY would be subject to service
of general process or to taxation as a foreign corporation doing business in
such jurisdiction to which it is not then subject; and (c) enter into a
cross-indemnity agreement, in customary form, with each underwriter, if any, and
each holder of securities included in such registration statement.
(iii) The COMPANY's obligations under this Article VI shall be conditioned
upon a timely receipt by the COMPANY in writing of: (a) information as to the
terms of such public offering furnished by or on behalf of each holder of
Registrable Securities intending to make a public offering of his, her or its
Registrable Securities, and (b) such other information as the COMPANY may
reasonably require from such holders, or any underwriter for any of them, for
inclusion in such registration statement.
5
ARTICLE VII
MISCELLANEOUS
Section 7.1. Binding Effect. This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective heirs, personal
representatives, successors and assigns.
Section 7.2. Indemnities. The COMPANY shall indemnify CONSULTANT and
CONSULTANT shall indemnify the COMPANY from any liability, loss, cost or damage
arising as a result of the breach of obligations of the indemnifying party under
this Agreement.
Section 7.3. Notices. All notices, requests, consents and other
communications hereunder shall be in writing and shall be mailed first class,
registered, with postage prepaid as follows:
If to the COMPANY addressed to: Fusion Networks, Inc.
0000 X.X. 00xx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attn: Xxxx X. Xxxxxxxx, President
If to CONSULTANT addressed to: Big Dog Ventures, Inc.
0000 X.X. 0xx Xxx, Xxxxx 000X
Xxxxx, XX. 00000
Attn: Xxxxxxx Xxxxxxx, President
Section 7.4. Costs and Expenses. Each party hereto shall responsible for
its own costs and expenses incurred in connection with the execution and
performance of this Agreement.
Section 7.5. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Florida.
Section 7.6. Disputes. Any disputes arising among the parties with respect
to this Agreement shall be settled by arbitration in accordance with the rules
then in effect of the American Arbitration Association in Miami, Florida. The
prevailing party in any such disputes shall be entitled to recover all of its
reasonable costs and attorneys fees incurred as a result of such dispute.
Section 7.7. Entire Agreement; Amendment. This Agreement constitutes the
entire Agreement between the parties relating to the subject matter hereof. No
term or provision of this Agreement may be amended, altered, varied or modified
except by a writing executed by all parties hereto.
Section 7.8. Waiver. The failure of either party to insist in any one or
more instances upon performance of any terms, covenants or conditions of this
Agreement shall not be construed as a waiver of future performance of any such
term, covenant or condition and the obligations and liabilities hereunder.
6
Section 7.9. Assignment. Neither party to this Agreement may assign any of
its rights, privileges or obligations hereunder without the prior written
consent of the other party.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the day and the year first written above.
FUSION NETWORKS, INC. BIG DOG VENTURES, INC.
By: By:
Title: Title:
