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EXHIBIT 6.16
CONSULTING AGREEMENT
This Agreement is made as of March 1, 1999, between Xxxxx.xxx, Inc., a
Delaware Corporation (the "Company"), and the Xxxxxxxx Group, Inc., a Delaware
Corporation (the "Consultant").
WITNESSETH
WHEREAS, the Company desires to obtain equity, quasi-equity or debt
financing from private and or public markets ("Financing") necessary to develop,
establish and expand a business providing third-party verified and insured
transmission services via the Internet, and to merge, acquire or sell business
operations and assets, and/or enter into strategic partnerships in order to
expand such a business;
WHEREAS, the Company has requested the services of Consultant and its
agents and representatives, if any, as an independent contractor to advise the
Company generally in connection with such efforts to obtain Financing in private
placements of and or public offerings of common stock or other quasi-equity
securities or debt of the Company ("Securities" or "Security"), and to advise it
and act as its exclusive agent in connection with any business combination,
including but not limited to any merger, acquisition or sale for the benefit of
the Company ("Transaction").
NOW THEREFORE, in consideration of the mutual promises of the parties
hereto, the adequacy and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
1. Engagement. The Company hereby engages Consultant until March 31,
2002 (the "Expiration Date") as an independent contractor to advise the Company
on and with respect to obtaining Financing of any sort and to advise it and act
as its agent in connection with any Transaction, including but not limited to
any business combination, merger, acquisition or sale. The Consultant, as the
Company's financial advisor, will provide the following services:
o Distribute an informational memorandum outlining the Company's
business plans and expectations and/or contemplating specific
transactions for business combinations;
o Identify potential sources of capital;
o Provide sale, merger, acquisition financial analysis;
o Advise on structure of any potential Transaction;
o Assist with negotiations;
o Assist with due diligence.
2. Compensation.
(a) In consideration of such advice, the Company agrees to pay
Consultant in cash an amount equal to the total of eight percent (8%)
of any Financing raised by the Company over the term of this agreement,
or eight percent (8%) of the value to the Company or its
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shareholders of any business combination transaction, including but
not limited to any merger, acquisition or sale.
(b) Consultant shall receive its compensation hereunder within five
(5) days of receipt by the Company of the Financing or the closing of
any Transaction or upon other arrangements as mutually agreed by the
parties.
(c) If the Board of Directors of the Company, in its reasonable
discretion, determines to engage an additional third-party consultant
to provide fund raising or advice on behalf of the Company, any fees to
the Consultant shall be reduced to the extent fees are payable to the
third-party consultant.
3. Representation and Warranties. Each party represents and warrants to
the other (which representations and warranties shall survive the execution and
delivery of this Agreement regardless of what examinations, inspections and
other investigations either party has heretofore made or may hereafter make,
with respect to such representations and warranties) as follows:
(a) Organization. Each party is a corporation duly organized and
validly existing as a corporation under the laws of its respective
state of incorporation.
(b) Authorization. Each party has full right and power to enter into
and perform its obligations under this Agreement and has taken all
requisite corporate action to authorize the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby. This Agreement has been properly and duly executed
and delivered by each party to the other and is binding upon and
enforceable against each party in accordance with its terms, except to
the extent such enforceability may be limited by the laws of
bankruptcy, insolvency or other laws affecting creditors rights
generally or by general principles of equity.
(c) Conflicts. Neither the execution, delivery or performance of
this Agreement by either party nor the consummation of the transactions
contemplated hereby do or will, after the giving of notice, or the
lapse of time, or otherwise conflict with, result in a breach of or
constitute a default under, either party's articles or certificate of
incorporation, bylaws or other constituent documents to which it is
bound or, to the best of each party's knowledge, any applicable
federal, state or local law, statute, ordinance, rule or regulation of
any court or administrative order or process or any material contract,
agreement, arrangement, commitment or plan to which either party is a
party or by which either party or any of its assets may be bound.
4. Confidentiality. The parties agree with respect to all technical,
commercial and other information furnished or disclosed by another party,
including, but not limited to, information regarding such party's organization,
personnel, business activities, customers, policies, assets, finances, costs,
sales, revenues, technology, rights, obligations, liabilities and strategies
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("Information"), that (a) such Information is confidential and/or proprietary to
the furnishing/disclosing party and is entitled to and shall receive treatment
as such by the receiving party; (b) the receiving party will hold in confidence
and not disclose (except in respect of the transactions contemplated by this
Agreement) any such Information, treating such Information with the same degree
of care and confidentiality as it treats its own confidential and proprietary
Information; provided, however, that the receiving party shall not have any
restrictive obligation with respect to any Information which (i) is contained in
a printed publication available to the general public, (ii) is or becomes
publicly known through no wrongful act or omission of the receiving party, or
(iii) is known by the receiving party without any proprietary restrictions by
the furnishing/disclosing party at the time of receipt of such Information; and
(c) all such Information furnished to either party by the other, unless
otherwise specified in writing, shall remain the property of the
furnishing/disclosing party and, in the event this Agreement is terminated,
shall be returned to it, together with any and all copies made thereof, as well
as any internal documents prepared by the recipient describing, analyzing or
otherwise containing Information furnished by the other party upon request for
such return (except for documents which the disclosing party has been required
to submit to a governmental agency). In the alternative, upon request, all such
writings and documents shall be destroyed, rather than returned, in the event
this Agreement is terminated, and each party shall confirm in writing to the
other compliance with either such request.
5. Remedies for Breach of Confidentiality. Each party hereto
acknowledges that the remedy at law for any breach by either party of its
obligations under Section 4 hereof is inadequate and that the other party shall
be entitled to equitable remedies, including an injunction and/or specific
performance, in the event of breach by any other party.
6. Termination of the Agreement. This Agreement shall terminate
pursuant to the terms and conditions of any one or more of paragraphs (a)
through (d) below:
(a) This Agreement shall terminate without further action of any
party, upon occurrence of any of the following events: (i) the
Expiration Date; (ii) upon the written consent and agreement of each
party hereto; or (iii) the termination of the Agreement by one of the
parties hereto pursuant to any of paragraphs (b), (c), or (d) of this
Section; or (iv) the consummation of an offering by the Company of
Securities registered under the Securities Act.
(b) Termination by Consultant. The Consultant shall have the right
at its option, to terminate this Agreement upon written notice to the
Company in the event of: (i) the Company's failure to make any payment
due under Section 2 of this Agreement for a period of ten (10) days
after the Consultant shall have given written notice thereof to the
Company; or (ii) the Company's breach of any of the terms or
conditions, representations, warranties or covenants and agreements of
this Agreement, which breach shall continue uncured for a period of
thirty (30) days from the receipt of written notice by the Consultant
specifying the breach or breaches in reasonable detail.
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(c) Termination by the Company. The Company shall have the right, at
its option, to terminate this Agreement upon the occurrence of the
following event: the Consultant's breach of any of the terms or
conditions, representations, warranties or covenants and agreements of
this Agreement, which breach shall continue uncured for a period of
thirty (30) days after the receipt of written notice by the Consultant
specifying the breach or breaches in reasonable detail.
(d) Termination Upon the Occurrence of an Event of Default. A
non-defaulting party may terminate this Agreement upon thirty (30)
days' prior written notice to the defaulting party upon the happening
of any of the following Events of Default:
(i) a decree or order by a court of competent jurisdiction
shall be entered against a party either: (A) ordering relief
under Title 11 of the United States Code or adjudging a party
hereto insolvent, or (B) approving a petition seeking
reorganization of a party hereto under Title 11 of the United
States Code or any other similar federal or state law, and any
such decree or order is not discharged or otherwise set aside
within sixty (60) days, or (C) appointing a receiver or trustee
or assignee, or liquidator or conservator in bankruptcy or
insolvency of a party hereto or a receiver of all or any
substantial portion of its property, and any such decree or
order is not discharged or otherwise set aside within sixty (60)
days, or (D) occurrence of any of the foregoing or similar
results in a non-United States jurisdiction; provided, however,
a final order or decree shall have been entered after the
expiration or the discharge or set aside periods set forth in
subparagraphs (2) and (3) above;
(ii) A party shall: (A) institute a case under Title 11 of
the United States Code, or consent to the filing of a bankruptcy
petition against it, or file a petition or answer or consent to
entry of an order for relief under Title 11 of the United States
Code or relief under any other similar federal or state law, or
(B) consent to the appointment of a receiver or trustee or
assignee or liquidator or conservator in bankruptcy or
insolvency of its or for all or any substantial portion of its
property, or make a general assignment for the benefit of
creditors, or admit in writing its inability to pay its debts
generally as they become due, or (C) accomplish any of the
foregoing or similar results in a non-United States
jurisdiction; provided, however, that a final order or decree
shall have been entered after the expiration of the discharge or
set aside set forth in subparagraphs (2) and (3) above.
7. Indemnification. Each of the Consultant and the Company (the
"Indemnifying Party") shall indemnify the other and hold each of the other's
employees, agents and representatives (collectively the "Indemnitees") harmless
from any and all demands, claims, actions, suits and proceedings which may at
any time be brought against either party and any and all liabilities, losses,
damages, costs and expenses (including, but not limited to, reasonable
attorney's fees and other legal costs and expenses) which may at any time be
suffered or incurred by any Indemnitee as a result of
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or in connection with (i) any act or omission of the Indemnifying Party in
connection with the performance of its obligations under this Agreement, or (ii)
any representation or warranty of the Indemnifying Party contained herein
proving to be untrue or incorrect in any material respect.
The right of either party to be indemnified and held harmless under
this Section shall not be exclusive but shall be in addition to any and all
other rights and remedies to which either party may be entitled under this
Agreement or otherwise.
8. Miscellaneous:
(a) The relationship of the Company and Consultant under this
Agreement is that of a purchaser of services and independent
contractor, respectively, and nothing contained in this agreement and
no action taken by either party to this Agreement shall be deemed to
constitute either party or any of such party's employees, agents or
representatives to be an employee, agent or representative of the other
party or will be deemed to create any partnership, joint venture,
association or syndicate among or between the parties, or will be
deemed to confer on either party any express or implied right, power or
authority to enter into any agreement or commitment, express or
implied, or to incur any obligation or liability on behalf of the other
party.
(b) This Agreement shall be governed by and construed and
interpreted in accordance with the internal laws of the State of
Illinois.
(c) Subject to Section 7(j) below, this Agreement is binding upon
and will inure to the benefit of the parties hereto and to their
respective heirs, executors, administrators, successors and assigns.
(d) In the event that any provision or clause of this Agreement
conflicts with or is held invalid under applicable law, such conflict
or invalidity shall not affect the other provisions of this Agreement
which can be given effect without the conflicting provision. To this
end the provisions of this Agreement are declared to be several.
(e) This Agreement may not be changed without the written consent of
the parties. All proposed modifications, notices, approvals, or other
communications provided for herein shall be in writing and shall be
personally delivered or sent by certified mail, postage full prepaid,
return receipt requested, addressed to each party.
(f) As used herein, an "Affiliate" of another person or entity means
a person or entity that directly or indirectly controls or is
controlled by, or is under common control with, the person or entity
specified.
(g) Each party to this Agreement shall pay all of the expenses
incurred by it in connection with this Agreement including without
limitation, its legal fees.
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(h) This Agreement may be executed simultaneously in counterparts
any one of which need not contain the signature of more than one party
but all such counterparts taken together will constitute one and the
same Agreement.
(i) Except as expressly provided herein, this Agreement constitutes
the entire and final agreement of the parties in respect of the subject
matter hereof and supersedes any and all prior understandings (whether
written or oral) in respect of such subject matter.
(j) Neither party may assign or otherwise transfer (whether by
operation of law or otherwise) this Agreement to any person or entity
without the express written consent of the non-assigning party.
IN WITNESS WHEREOF, the Company and Consultant have executed and
delivered this Agreement on the date first written above.
XXXXX.XXX, INC. THE XXXXXXXX GROUP, INC.
By: /s/ XXXXXXX X. XXXXXX, III By: /s/ XXXXXX X. XXXXX, XX.
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Its: Chairman Its: Managing Director
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