EXHIBIT 10.5
CONSULTING AGREEMENT
CONSULTING AGREEMENT (the "Agreement") dated as of April 30, 2002 between
WOTTAGE INTERNATIONAL CORPORATION LTD. c/o Xxxxx X. Xxxxxx, located at Box 599,
Carribean Place, Leeward Hwy, Providenciales, Turks and Caicos Islands,
hereinafter ("Client") and WIEN GROUP, INC., a New York Corporation located at
000 Xxxxxxxxxx Xxxx., Xxxxx 0X, Xxxxxx Xxxx, XX 00000, and its Joint Venture
Partner UNITED INSTITUTIONAL INVESTMENTS, INC., a Delaware Corporation c/o Xxxx
Xxxxxx, President, 000 Xxxxxxxxxx Xxxx., Xxxxx 0000, Xxxxxx Xxxx, XX 00000,
collectively hereinafter ("Consultant").
W I T N E S S E T H
WHEREAS, Client and/or its affiliates desires to receive advisory services from
the Consultant in connection with:
(a) assisting in activities including, but not limited to, market support,
corporate finance, merchant banking mergers and acquisitions, and investor
relations;
(b) assisting in ongoing strategic planning, investment policies, and financial
packaging;
(c) providing representation and introduction to various financial institutions,
strategic partners, and potential clients; and
(d) assisting in the negotiation of contracts with lenders, suppliers, clients,
and or strategic partners.
(collectively, the "Objectives")
WHEREAS, the Consultant has established their expertise in, among other things,
financial matters, assisting in the planning of corporate expansion, arranging
private financing, and financial consulting services in general.
NOW, THEREFORE, in consideration of the mutual covenants and agreements, and
upon the terms and agreements, and upon the terms and subject to the conditions
hereinafter set forth, the parties do hereby covenant and agree as follows:
SECTION 1. RETENTION OF CONSULTANT. Client engages the Consultant, and the
Consultant accepts such engagement, subject to the terms and conditions of this
Agreement.
SECTION 2. SERVICES. At such times as are mutually convenient to the Consultant
and Client during the Term (as defined below), the Consultant shall provide
consulting services to Client and/or its affiliates in connection with each of
the Objectives.
1
EXHIBIT 10.5
SECTION 3. COMPENSATION. For services rendered by the Consultant pursuant to
this Agreement, Client shall pay Consultant the following:
a) Upon execution of this Agreement, Client shall pay the Consultant a retainer
of $5,M allocated to cover initial expenses, 25,000 freely tradable shares of
NetNation Communications Inc. (Nasdaq symbol: NNCI); and a block purchase /
trade of up to 900,000 common shares at a price of $1.25 to be purchased by the
Consultant, or its successors or assigns, over a period no longer than 21
calendar days after the execution date of this agreement.
b) In further consideration, Options shall be hereby granted from Client
("Optionor") to the Consultant ("Optionee"), as follows:
* 100,000 @ exercise price $1.50 per share
* 100,000 @ exercise price $2.00 per share
* 100,000 @ exercise price $2.50 per share
* 100,000 @ exercise price $3.00 per share
* 100,000 @ exercise price $3.50 per share
i. The first 200,000 options (exercise price $1.50 and exercise price $2.00)
shall expire 6 months from the date of this agreement. The second 200,000
options (exercise price $2,50 and exercise price $3.00) shall expire 12 months
from the date of this agreement and the last 100,000 options (exercise price
$3.50) shall expire 18 months from the date of this agreement.
ii. The Options granted herein may be exercised by Optionee in whole or in part
at any time or times on or before 5:00 p.m. on the dates as set forth in Section
3b)i. Optionee may exercise the Options from time to time by delivering to the
Optionor the amounts set forth in Section 3 above net to Optionor (pro rata)
for each Share (the "Exercise Price") for which Optionee is exercising the
Option. Payments shall be made to Optionor by certified check or money order.
Upon receipt by Optionor of Optionee's payment, Optionor shall, within five
days, transfer the number of Shares so purchased upon the exercise to the
Optionee.
iii. Optionor currently represents that he is in possession of the shares to be
delivered as stated in Section 3, and that the certificates and executed Stock
Powers for shares shall be delivered to the Optionee within five days of the
Optionor receiving full payment of all or any part of the option so exercised by
the Optionee. For convenience the Optionee may request delivery of the shares
by IMM transfer.
c) A cash fee equal to 4% of the gross amount of any subordinate, mezzanine
and/or equity financing obtained by Client and/or its affiliates and arranged by
the Consultant, shall be payable to Consultant directly from closing proceeds,
and
2
EXHIBIT 10.5
d) For any direct business joint Ventures between Client and/or its affiliates
and Consultant, these shall be divided equally and for any services rendered for
M & A work these shall be assessed and agreed to on a case-by-case basis.
SECTION 4. EXPENSES. Client shall pay the Consultant on a monthly basis, all
costs and out-of-pocket expenses, incurred by the Consultant in connection with
its obligations and duties under this Agreement; provided, however, that the
Consultant shall obtain the prior written consent of Client for any single item
of expense in excess of $100. Clients consent hereunder shall not be
unreasonably withheld or delayed.
SECTION 5. NON-EXCLUSIVITY. The parties hereto acknowledge that Consultant have
been retained by Client on a non-exclusive basis. If Client or any principal
thereof or any one affiliated with Client or its principals arranges financing
with any person or entity introduced by the Consultant within five (5) years
from such introduction, the Consultant shall be entitled to the compensation
referred to in Section 3 above.
SECTION 6. FULL COOPERATION. In connection with the activities of the Consultant
on behalf of Client, Client will cooperate with the Consultant and will furnish
the Consultant and the Consultant's representatives with all information and
data concerning Client and/or its affiliates as may be required in connection
with the Consultant's services hereunder. Client will also provide Consultant
and the Consultant's representatives with access to Client's officers,
directors, employees, agents, representatives, independent accountants and legal
counsel.
SECTION 7. REPRESENTATIONS. Client warrants and represents to the Consultant
that this Agreement does not conflict with any other agreement binding Client.
Client warrants and represents to the Consultant, that Client is fully
authorized to offer and pay the Consultant's compensation referred to in Section
3 above.
Client warrants and represents to the Consultant that to the best of Client's
knowledge all information provided or made available to the Consultant
(including but not limited to, all information contained in our Business Plan)
will, at all times during the period of this engagement, be complete and
correct, will contain all material facts, and will not omit to state a material
fact necessary in order to make the statements therein not misleading in the
light of the circumstances under which such statements are made.
Client further warrants and represents to the Consultant that any projections
provided by Client to the Consultant (whether before, on or after the date
hereof) have been prepared in good faith and are based upon reasonable
assumptions, Client acknowledges and agrees that in rendering the Consultant's
services hereunder, the Consultant will be using and relying upon the
information (and information available from public sources and other sources
deemed reliable by the Consultant) without independent verification thereof or
independent appraisal of any of Client's assets by the Consultant and that the
Consultant assumes no responsibility for the accuracy of the information or any
other
3
EXHIBIT 10.5
information regarding Client or any financing. Any advice rendered by the
Consultant pursuant hereto may not be publicly disclosed or otherwise utilized
without the Consultant's prior written consent.
SECTION 8. NOT A BROKER-DEALER. Client understands that the Consultant is not a
registered broker/dealer, that the Consultant's activities on Client's and/or
its affiliates' behalf in connection with any financing will be limited to the
identification of prospective broker-dealers, and that the Consultant has not
been engaged to effect any transaction with respect to Client's and/or its
affiliates' securities for Client or others.
SECTION 9. INDEMNIFICATION. Client agrees to indemnify and hold harmless the
Consultant, and any company controlling the Consultant or controlled by the
Consultant, and their respective officers, agents and employees to the full
extent lawful, from and against any losses, claims, damages or liabilities
(including reasonable counsel fees) related to or arising out of this agreement
or in connection with a financing and to reimburse the party entitled to be
indemnified hereunder for all reasonable expenses (including reasonable counsel
fees) as may be incurred by such party in connection with investigating,
preparing or defending any such action or claim, provided, however, that Client
shall not indemnify and hold harmless the Consultant or any such other person
for any liability attributable to the Consultant's or such other person's gross
negligence or willful misconduct or to the Consultant's breach of the
Consultant's obligations hereunder.
The Consultant agrees to indemnify and hold harmless Client and its officers,
agents and employees to the full extent lawful, from and against any losses,
claims, damages or liabilities (including full extent lawful, from and against
any losses, claims, damages or liabilities (including reasonable counsel fees)
relating to the Consultant's gross negligence, willful misconduct or breach of
its obligations hereunder and to reimburse the party entitled to be indemnified
hereunder for all reasonable expenses (including reasonable counsel fees) as may
be incurred by such party in connection with investigating, preparing or
defending any such action or claim, provided, however, that the Consultant shall
not indemnify and hold harmless Client or any such other person for any
liability attributable to Client's or such other person's gross negligence or
willful misconduct or to Client's breach of its obligations hereunder; and
provide, further, that the Consultant's maximum liability hereunder shall not
exceed the amount or monetary value (determined on a liquidity basis) of any
compensation received by the Consultant pursuant to Section 3 hereof.
SECTION 10. WAIVER OF BREACH. The failure by Client to exercise any rights or
powers hereunder shall not be construed as a waiver thereof. The waiver by
Client of a breach of any provision of this Agreement by the Consultant shall
not operate nor be construed as a waiver of any subsequent breach by the
Consultant.
SECTION 11. NOTICES. Any notices, requests, demands and other communications
which are required or permitted under this Agreement shall be in writing and
shall be deemed
4
EXHIBIT 10.5
sufficiently given upon receipt if personally delivered, faxed, sent by
recognized national overnight courier or mailed by certified mall, return
receipt requested, to the address of the parties set forth above. Such notices
shall be deemed to be given (i) when delivered personally, (ii) one day after
being sent by overnight courier carrier or (iii) three days after being mailed,
respectively.
SECTION 12. TERM. This Agreement shall be for a term commencing on the date
hereof and ending in one (1) year with an automatic extension for an additional
one (1) year in the event that the Consultant is successful in arranging any
subordinate, mezzanine and/or equity financing.
SECTION 13. GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with the internal laws of the State of New Jersey.
SECTION 14. ENTIRE AGREEMENT, AMENDMENTS. This Agreement contains the entire
agreement and understanding between the parties and supersedes and preempts any
prior understandings or agreements, whether written or oral. The provisions of
this Agreement may be amended or waived only with the prior written consent of
Client and the Consultant.
SECTION 15. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon, inure
to the benefit of, and shall be enforceable by the Consultant and Client and
their respective successors and assigns; provided, however, that the rights and
obligations of the Consultant under this Agreement (with the exception of those
rights in Section 3 hereof) shall not be assignable.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement.
For the Consultant:
WIEN GROUP, INC. UNITED INSTITUTIONAL INVESTMENTS,
INC.
By: /s/ Xxxx X. Xxxxxx By: /s/ Xxxx X. Xxxxxx
--------------------------- ---------------------------
Name: Xxxx X. Xxxxxx Name: Xxxx X. Xxxxxx
Title: Executive Vice President Title: President
For the Client:
WOTTAGE INTERNATIONAL CORPORATION, LTD.
By: /s/ Xxxxx X. Xxxxxx
------------------------
Name: Xxxxx X. Xxxxxx
Title: Signing Officer & Trustee
5
