EXHIBIT 10.60
ADVISORY AGREEMENT
AGREEMENT, dated as of December 31, 2001, by and between Intervisual Books,
Inc., a California corporation (the "Corporation"), and Wardenclyffe Group, Inc.
(the "Consultant").
W I T N E S S E T H :
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WHEREAS, the Corporation and Intervisual Partners, LLC (the "Investor")
have entered into a Series A Preferred Stock Purchase Agreement, of even date
herewith, pursuant to which the Investor proposes to acquire certain shares of
the Corporation's newly designated Series A Preferred Stock (the "Purchase
Agreement");
WHEREAS, upon completion of such acquisition, the Corporation will require
certain consultancy services from the Consultant;
WHEREAS, the Consultant desires to supply consultancy services to the
Corporation upon the terms and conditions set forth herein; and
WHEREAS, it is a condition to the closing of the Purchase Agreement that
the Consultant and the Corporation enter into this Agreement providing for the
Consultant to supply the consultancy services described herein to the
Corporation.
NOW, THEREFORE, the parties hereto agree as follows:
1. Duties.
(a) The Corporation hereby engages Consultant and Consultant hereby
agrees to render services as a consultant to the Corporation for the term
specified in Section 2 hereof.
(b) Consultant shall, at all reasonable times and as reasonably
required, provide the Corporation with regular and customary public relations
and strategic advisory services. Consultant's duties may include, but will not
necessarily be limited to, providing:
(i) advice regarding, and assistance in, the formation of
corporate goals and their implementation;
(ii) advice regarding, and the development of, the Corporation's
business plan and its implementation and evolution;
(iii) advice regarding the financial structure of the Corporation
and its subsidiaries;
(iv) advice regarding corporate organization and structure, and
identification and retention of personnel;
(v) assistance with respect to investor relations; and
(vi) assistance with respect to identification and retention of
financial analysts.
Consultant shall provide such services and shall devote such time and
attention as the Corporation and the Consultant shall reasonably agree shall be
necessary or desirable for the performance of Consultant's duties as a
consultant when called upon to do so by the Corporation, provided that the
Corporation shall not require that Consultant's services be performed at any
particular place or at any particular time.
2. Term. The term of this Agreement shall commence on the date hereof and
shall continue for a period of one (1) year thereafter (the "Term") unless
sooner terminated pursuant to Section 8 of this Agreement.
3. Independent Contractor. Consultant is an independent contractor.
Nothing contained in this Agreement shall be deemed or construed to create a
joint venture, partnership, principal-agent or employment relationship between
the parties. Consultant expressly acknowledges and agrees that it shall have no
authority to, and that it shall not, enter into any contract or agreement on
behalf of the Corporation, bind the Corporation in any manner, or otherwise act
as, or hold itself out as, an agent of the Corporation.
4. Compensation. For all services to be rendered hereunder by
Consultant, the Corporation agrees to compensate the Consultant as follows:
(a) Monthly Fee: The Corporation agrees to pay the Consultant a
monthly fee equal to Two Thousand Dollars ($2,000), payable monthly in arrears
on the last business day of each month.
(b) Finder's Fee: In the event that the Consultant, or an agent,
representative or other designee of the Consultant, first introduces to the
Corporation a third party, and as a result of such introduction, during the Term
or within three (3) months thereafter, such third party acquires, directly from
the Corporation, debt or equity securities of the Corporation, the Consultant
shall be entitled to a fee in the aggregate amount of 7% of the aggregate
consideration received by the Corporation from such third party.
5. Right of First Refusal to Act as Investment Banker. The Consultant
shall have the right of first refusal to act as the Corporation's investment
banker with respect to all strategic decisions of the Corporation, including,
but not limited to, mergers, acquisitions, divestitures and joint ventures;
provided, however, that in order to exercise such right of first refusal
Consultant must have all necessary licenses. The Consultant agrees that
Consultant's compensation for its services as the Corporation's investment
banker shall not exceed an amount that would have otherwise been paid by the
Corporation for comparable services of a reputable investment banking firm.
6. Expenses. The Corporation shall reimburse Consultant for all
reasonable and necessary out-of-pocket expenses of Consultant incurred in
connection with the services
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being rendered to the Corporation hereunder, subject to presentation of
appropriate vouchers, bills or similar documentation, and provided that any such
expenses in excess of $5,000 shall be agreed in advance by the Corporation in
writing.
7. Nondisclosure and Ownership of Proprietary Information.
(a) Definition of Proprietary Information. Consultant hereby
acknowledges that Consultant shall or may make use of, acquire, create, develop
or add to certain confidential and/or proprietary information regarding the
Corporation and its business (whether in existence prior to, as of or after the
date hereof, collectively, "Proprietary Information"), which Proprietary
Information shall include, without limitation, all of the following materials
and information (whether or not reduced to writing and whether or not patentable
or protected by copyright): inventions, processes, formulae, programs, technical
data, "know-how," procedures, manuals, confidential reports and communications,
marketing methods, product sales or cost information, new product ideas or
improvements, new packaging ideas or improvements, research and development
programs, identities or lists of suppliers, vendors, or other customers,
financial information and financial projections of the Corporation of any nature
whatsoever, or any other trade secrets or confidential or proprietary
information relating to the Corporation and/or its business. Consultant (i)
shall hold all such Proprietary Information in the strictest confidence, (ii)
shall cause its employees and agents to hold all such Proprietary Information in
the strictest confidence, and (iii) agrees not to use, copy, or otherwise
replicate any Proprietary Information of the Corporation.
(b) Ownership. Consultant acknowledges and agrees that all right,
title and interest in and to any Proprietary Information shall be and shall
remain the exclusive property of the Corporation. Without limiting the
foregoing, Consultant shall assign to the Corporation any and all right, title
and interest which Consultant may have in all Proprietary Information made,
developed or conceived of in whole or in part by Consultant during its
engagement hereof. Consultant agrees to make all necessary disclosures and
execute, acknowledge and deliver all instruments and perform all acts reasonably
requested by the Corporation to effectuate the assignment provided for in the
previous sentence.
(c) Return of Information. Upon the termination of this Agreement for
any reason or upon request of the Corporation, all Proprietary Information,
intellectual property, discoveries and trade secrets, together with all copies
of the same, shall be returned to the Corporation.
(d) Representations and Warranties. Consultant represents and
warrants that all work and materials or portions thereof delivered by Consultant
in connection with Consultant's services to the Corporation shall be original,
shall be solely of Consultant's authorship and design and shall not infringe
upon the rights of any other person or party.
8. Termination. Notwithstanding any provision of this Agreement to the
contrary, this Agreement may be terminated under any of the following
circumstances:
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(a) The Corporation may terminate this Agreement at any time, with or
without a Cause, effective upon written notice thereof to Consultant. As used
herein, "Cause" shall mean the breach by Consultant of any of its material
obligations under of this Agreement, which breach shall remain uncured for
thirty (30) days after written notice thereof from the Corporation to
Consultant.
(b) Consultant may terminate this Agreement at any time for Good
Reason, effective upon written notice thereof to the Corporation. As used
herein, "Good Reason" shall mean the breach by the Corporation of any of its
material obligations under this Agreement, which breach shall remain uncured for
thirty (30) days after written notice thereof from Consultant to the
Corporation.
(c) Upon termination of this Agreement pursuant to this Section 8,
the Consultant shall be entitled to all amounts or benefits to be paid or
provided by the Corporation under this Agreement up to the date of termination.
In addition, and in lieu of any and all other rights or remedies which
Consultant would or might have, if this Agreement is terminated prior to the end
of the Term, either by the Corporation for any reason other than Cause or by
Consultant for Good Reason, Consultant shall also be entitled to receive, as its
sole and exclusive remedy, in a single lump sum, an amount equal to the total
additional compensation which Consultant would have been entitled to receive had
there been no termination of this Agreement prior to the expiration of the Term.
9. No Set-Offs, etc. Except as expressly set forth in this Agreement, no
amounts agreed to be paid or benefits agreed to be furnished by the Corporation
under this Agreement shall be subject to any deduction, diminution or set off of
any kind whatsoever.
10. Binding Effect and Assignment. This Agreement shall be binding upon
and insure to the benefit of the Corporation, its successors and permitted
assigns and the Consultant, its successors and permitted assigns. No assignment
of this Agreement shall be valid unless consented to in writing by the
non-assigning party.
11. Waivers. The failure of any party to this Agreement to enforce its
terms and provisions or covenants shall not be construed as a waiver of the same
or of the right of such party to enforce the same.
12. Entire Agreement. This Agreement sets forth the entire Agreement
between the parties with respect to its subject matter and merges and supersedes
all prior discussions, agreements and understandings of every kind and nature
between them, including, without limitation, any other agreement with any third
party for the supply of Consultant's services to the Corporation. No party
hereto shall be bound by any term or condition other than as expressly set forth
or provided for in this Agreement. This Agreement may not be changed or modified
except by an agreement in writing, signed by the party or parties to be bound
thereby.
13. Notices. All notices, requests, demands and other communications
provided for, under, or made in connection with this Agreement, shall be in
writing and shall be deemed to have been given by any party hereto at the time
when delivered by hand against the
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appropriate receipt, or sent by facsimile transmission or mailed by registered
or certified mail or the equivalent thereof, addressed to the addresses of the
respective parties stated below, or as changed or added as any party may fix in
accordance with this Section 13.
If to the Corporation:
Intervisual Books, Inc.
0000 Xxxxx Xxxx Xxxxxxxxx, Xxxxx 0000
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
If to the Consultant:
Wardenclyffe Group, Inc.
00 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
14. Governing Law. This Agreement shall be governed by and construed in
all respects in accordance with the laws of the State of California without
regard to its conflict of law principles.
15. Counterparts. This Agreement may be executed by the parties hereto in
separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts together shall constitute one and the same
instrument. Facsimile signatures shall be deemed original for all purposes.
16. Condition to Effectiveness. The effectiveness of this Agreement is
specifically conditioned upon the release from escrow to the Company of
$1,600,000 at the Second Closing (as defined in the Purchase Agreement) as
provided for in the Purchase Agreement. The parties acknowledge that unless such
sum is released from escrow to the Company at the Second Closing this Agreement
shall be null and void and of no further effect.
[signature page follows]
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[SIGNATURE PAGE TO ADVISORY AGREEMENT]
IN WITNESS WHEREOF this Agreement has been entered into the day
and year first above written.
INTERVISUAL BOOKS, INC.,
a California corporation
By: /s/ Xxxxx X. Xxxx
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Name: Xxxxx X. Xxxx
Title: Chairman of the Board
WARDENCLYFFE GROUP, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxx
Title: President
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