Management Services Consulting Agreement
This Management Services Consulting Agreement is entered into as
of May 1, 2001 (the "Effective Date"), by and between First Advisors,
Inc., a Texas corporation ("Consultant"), and National Health & Safety
Corporation, a Utah corporation, ("Company").
RECITALS
A. The Company is engaged in the business of marketing discount healthcare cards
to the consumer (the "Business").
B. Through its Employees, and through Contractors and Service Providers
engaged by Consultant, Consultant will arrange for personnel. to provide
general and specific consulting services to Company as provided in this
Agreement.
C. The Company desires to engage Consultant to provide certain consulting
services to Company to assist Company in furthering its goals for the
Business, and Consultant is willing to accept such engagement to provide
such consulting services to Company, upon the terms and subject to the
conditions contained in this Agreement.
AGREEMENT
THEREFORE, in consideration of the premises and the mutual covenants and
agreements contained in this Agreement, Company and Consultant agree as follows:
Article One
Definitions
1.1 Definitions: For purposes of this Agreement, the following terms are
defined as set forth in this Section 1.1. All references to a Recital,
Article, Section, or Schedule are to a Recital, Article, Section, or
Schedule of this Agreement, unless otherwise indicated.
a. Affiliate of any Person means any other Person who directly controls,
is controlled by, or is under common control with, such Person. For
purposes of this definition, "control," "controlled by," and "under common
control with" means possession, directly or indirectly, of power to direct
or cause the direction of management or policies (whether through ownership
of voting securities or interests, by contract, or otherwise).
b. Agreement means this Management Services Consulting Agreement, including
all Schedules, as it may be renewed, extended, restated, amended, or
supplemented from time to time.
c. Business has the meaning given such term in Recital A.
d. Business Day means every day on which commercial banks in the State of
Texas are open for business.
e. Cause means:
(1) A material default in the performance of Consultant's duties under this
Agreement, if such default has not been cured by Consultant within 30 days
following the receipt by Consultant of notice of such material default given
by Company, or
(2) Consultant's dishonesty, willful misconduct, willful violation of any
Law, action (or omission) involving moral turpitude and reflecting unfavorably
upon the public image of Company, or action (or omission) aiding or
abetting a competitor, supplier, or customer of Company to the material
disadvantage of Company.
f. Company has the meaning given such term in the initial paragraph of
this Agreement.
g. Company Representative has the meaning given such term in Section 2.8.
h. Compensation has the meaning given such term in Section 4.1.
i. Confidential Information means any information, other than Public
Information, which is in tangible form, which is deemed to be confidential
by Consultant, which is marked as confidential or proprietary (or words
of similar import) at the time of disclosure to Consultant, and which falls
within any one or more of the following categories with respect to Company
and its Affiliates:
(1) Information concerning (i) operations, (ii) finances, (iii) business
opportunities, (iv) business methods and concepts, and (v) business plans;
(2) Information concerning (i) customers, including customer names, customer
lists, and the terms of contracts with customers, and (ii) suppliers,
including the terms of contracts with suppliers;
(3) Information concerning (i) products, (ii) services, (iii) marketing and
sales plans and sales techniques, and (iv) other concepts or ideas related
to the Business that are proprietary and unique;
(4) Results of any tests and/or studies regarding the Business and/or any
reports from any third person contractors or consultants engaged to analyze
and/or interpret research data in connection with the Business;
(5) Information concerning internal policies and procedures, including
personnel policies and procedures;
(6) Information concerning Company's relationships with its accountants,
attorneys, bankers, insurance agents, or other third parties with whom
Company maintains a business relationship;
(7) Information related to, or that could be used in any way against
Company or any Affiliate of Company in connection with, any lawsuit or
any dispute in which Company or any Affiliate of Company is or might
become involved; and
(8) Financial statements, reports, manuals, notebooks, letters (and
other correspondence), and other written material pertaining to the Business.
j. Contractor means an individual with business experience and expertise
who is engaged by Consultant as an independent contractor to assist
Consultant in the provision of Services to Company pursuant to this
Agreement (such engagement by Consultant may be limited to the provision
of Services hereunder or may encompass the provision of consulting services
to other Persons in addition to Company).
k. Effective Date has the meaning given such term in the initial paragraph
of this Agreement.
l. Employee means an individual who is an employee of Consultant or an
Affiliate of Consultant and who is assigned by Consultant to provide
Services to Company pursuant to this Agreement.
m. Initial Term means the period beginning on the Effective Date and
ending on April 30, 2002.
n. Inventions have the meaning given such term in Section 5.2.
o. Laws means all applicable statutes, laws, treaties, ordinances,
rules, regulations, orders, writs, injunctions, decrees, judgments,
or opinions of any Tribunal.
p. Person means any individual, corporation, partnership, joint venture,
limited liability company, trust, Tribunal, or other entity.
q. Public Information means:
(1) Information which is publicly available,
(2) Information which Consultant develops independently without use
of any Confidential Information so long as Consultant's independent
development of such information can be documented and verified,
(3) Information, other than Confidential Information delivered to
Consultant by Company prior to the Effective Date, in Consultant's
possession on the Effective Date so long as such possession can be
verified, and
(4) Information that is rightfully received by Consultant from a third-
party who has no duty of confidentiality with respect to such information.
r. Rights means legal and equitable rights, remedies, powers, privileges,
and benefits.
s. Service Provider means a lawyer (or law firm), accountant
(or accounting firm), public relations professional (or public
relations firm), or other professional service provider who is
either engaged by Consultant as an independent contractor to assist
Consultant in the provision of Services to Company pursuant to this
Agreement or is recommended by Consultant to Company and engaged by
Company to provide professional services to Company.
t. Services have the meaning given such term in Section 2.2.
u. Taxes mean all charges of any nature whatsoever imposed by any
Law or Tribunal.
v. Term means the Initial Term and any renewal or extension of the
Initial Term.
w. Tribunal means any (a) local, state, federal, or foreign judicial,
executive, administrative, regulatory, or legislative instrumentality,
and (b) private arbitration board or panel.
1.2 Number and Gender of Words: Whenever in this Agreement the singular
number is used, the same shall include the plural where appropriate and
vice versa, and words of any gender shall include each other gender
where appropriate.
Article Two
Creation and Nature of Relationship
2.1 Engagement of Consultant: Upon the terms and subject to the conditions
contained in this Agreement, Company engages Consultant, effective as of the
Effective Date, as a business consultant to provide the Services to Company;
and Consultant accepts such engagement and agrees to provide the Services
upon such terms and subject to such conditions.
2.2 The Services: From time to time as requested by Company, Consultant,
as an independent contractor, will provide the consulting services described
in Schedule A (collectively, the "Services") to Company during the Term.
2.3 Standard of Performance: Consultant represents and warrants to, and
covenants with, Company as follows:
a. No Conflicting Agreements: Consultant represents to Company that it is
not subject to any agreements or arrangements that prevent Consultant from
complying with its obligations to Company under this Agreement; and Consultant
agrees while this Agreement remains in effect it will not enter into any
such conflicting agreements or arrangements.
b. Quality of the Services: Consultant agrees that it will provide the
Services with reasonable care, skill, and diligence and in accordance with
applicable professional standards customary for consulting services similar
to the Services, and warrants that the Services will be provided by Employees,
Contractors, and Service Providers selected and supervised by Consultant.
THE FOREGOING IS A LIMITED WARRANTY AND IS THE ONLY WARRANTY MADE BY PROVIDER.
PROVIDER MAKES NO OTHER WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED, INCLUDING,
BUT WITHOUT LIMITATION, ANY WARRANTY CONCERNING MERCHANTABILITY OR FITNESS FOR
A PARTICULAR PURPOSE.
c. Shall in no event be liable for special, consequential, exemplary, or
incidental damages, including, but without limitation, loss of profit or
goodwill, suffered by Company or any Affiliate of Company.
d. Compliance with Laws: Consultant agrees to use good faith efforts to
comply with all applicable Laws in providing the Services.
2.4 Employees, Contractors, and Service Providers: Consultant, at its
sole discretion, will assign such of its Employees to the provision of the
Services as it deems appropriate or desirable; and, at its election, Consultant
may also engage one or more Contractors or Service Providers to provide, or
assist Employees of Consultant in providing, the Services to Company. If
any Employee, Contractor, or Service Provider assigned by Consultant to the
provision of the Services does not satisfactorily perform assigned duties,
or if Company considers any Employee's, Contractor's, or Service Provider's
conduct to be detrimental to Company or the Business, Consultant will withdraw
such Employee, Contractor, or Service Provider promptly after receipt of
Company's notification. Subject to the limited Rights of Company contained
in the second sentence of this Section 2.4, Consultant shall at all times
maintain the Right to control, direct, and supervise its Employees and
Contractors and Service Providers engaged by Consultant, including the
Right to discharge or reassign any such Employee, Contractor, or Service
Provider providing Services under this Agreement. The foregoing
notwithstanding, in the event Company requires the services of any Service
Provider and Company and/or Consultant believe Company's best interests
will be served by Company's direct engagement of such Service Provider,
Consultant, at Company's request, will make recommendations regarding one
or more qualified Service Providers and Company, at its sole discretion,
may engage the Service Consultant of its choice to provide the required
professional services; and in such event, Consultant will bear no
responsibility whatsoever for, or with respect to, the actions (or omissions)
of the Service Provider(s) engaged by Company.
2.5 Time and Attention to the Services: The engagement of Consultant to
provide the Services is intended as a part-time engagement that will not
require Consultant, or those of its Employees, Contractors, or Service
Providers providing Services to Company, to devote its, or their, full time
and attention to the provision of the Services. Consultant will use its
good faith efforts to be responsive to requests from Company for the
provision of Services at specified times; but Consultant, at its reasonable
discretion, will determine how much time and attention to devote to the
provision of the Services.
2.6 Nature of Relationship: In its capacity as a business consultant to
Company under this Agreement, Consultant will have no authority or power to
bind Company to any agreement, contract, or order, or in any other manner,
without Company's written approval, nor will Consultant be authorized to act
as an agent or representative of Company unless expressly authorized in
writing to do so. In the performance of its duties under this Agreement,
Consultant will be an independent contractor with the sole Right to supervise,
manage, control, and direct the performance of the details incident to such
duties, and nothing contained in this Agreement will be deemed or construed
to create a partnership or joint venture, to create the relationship of
employer - employee, or, except as expressly set forth herein or in a separate
writing delivered pursuant hereto, principal - agent, or to otherwise create
any liability for either Company or Consultant with respect to any
indebtedness, liabilities, or obligations of the other or of any other Person.
Consultant will be free to set its own hours and appointments and, as
contemplated by Section 2.5, to devote as much time to the provision of
Services as Consultant deems appropriate and consistent with its obligations
under this Agreement.
2.7 Consultant Responsibilities: To facilitate the performance of the Services
by Consultant, Consultant will provide access to its facilities, information,
and personnel (including, but without limitation, its directors, officers,
employees, financial and other advisors, and agents) to Company during
reasonable hours.
2.8 Company Representative: Company's representative for all matters related
to this Agreement and the Services to be provided hereunder will be the Board
of Directors of Company or such other representative as the Company may
designate from time to time by written notice to Consultant (the "Company
Representative"). Subject to the independence afforded Consultant pursuant to
other provisions of this Article Two, Consultant will receive instruction,
direction, and supervision from the Company Representative and the Company
Representative will have complete authority to act for and on behalf of Company
with respect to this Agreement and the Services. Consultant will provide the
Company Representative with such information concerning the provision of the
Services, as the Company Representative shall request from time to time.
Consultant will act upon the instructions or directions of the Company
Representative, but will not be required to act upon any such instructions or
directions if acting upon the same would require Consultant to incur any
expenses or to expend any of its own funds. At any time, Consultant may
seek instruction or direction from the Company Representative, and may refrain
from acting on any matter with respect to which it has sought instruction or
direction until the requested instruction or direction is provided to
Consultant. Under no circumstances will Consultant be liable for any action
taken or omitted to be taken in reliance on the instruction or direction of
the Company Representative.
2.9 Exclusivity:
a. Consultant's Right to Provide Consulting Services to Others: Subject to the
conflict of interest provisions contained in Section 7.16, nothing contained
in this Agreement is intended to or shall be deemed to limit Consultant's
ability to accept business consulting engagements from other Persons, expressly
excluding Persons who are competitors with Company and Persons that have
developed technology and/or that offer products or services similar to those
developed and/or offered by Company.
b. Limitations on Company's Right to Engage Other Consultants: While this
Agreement remains in effect, Company agrees that it will not engage any Person
other than Consultant to provide consulting services the same as or
substantially similar to the Services to be provided by Consultant under this
Agreement; however, nothing contained in this Agreement is intended to limit
the ability of Company to engage any Person to provide consulting services that
differ from the Services or to otherwise enter into any arrangement with any
Person so long as such arrangement does not conflict with this paragraph b or
other provisions of this Agreement.
Article Three
Term and Termination
3.1 Term: This Agreement is effective on and as of the Effective Date and it
shall remain in effect for the Initial Term and any renewals or extensions
thereof, unless earlier terminated in accordance with Section 3.2.
3.2 Termination of this Agreement: This Agreement may be terminated as
follows:
a. By Mutual Consent: Company and Consultant may terminate this Agreement at
any time by written mutual consent executed by an authorized officer or
manager of Company and Consultant.
b. Without Cause: For its sole convenience either Party may terminate this
Agreement at any time by giving written notice of termination to the other
Party not less than 30 days before the date of termination.
c. With Cause: Either Party may terminate this Agreement at any time for
Cause by giving written notice of termination to the other Party. Notice
given pursuant to this paragraph must include a list of the actions or
omissions constituting Cause and giving rise to such notice.
3.3 Unpaid Compensation: On or promptly after the effective date of
termination under this Section 3.2, (i) Consultant will be paid all unpaid
Compensation due to Consultant under this Agreement and all then unreimbursed
expenses due to Consultant under this Agreement, and (ii) Consultant will
deliver to Company all property of Company in the possession of Consultant,
including, but without limitation tangible Confidential Information of Company
in Consultant's possession, as required by Section 5.1.
3.4 Renewals and Extensions: Unless earlier terminated by Company or
Consultant pursuant to Section 3.2, this Agreement will continue in effect
after the last day of the Initial Term until the earlier of (a) termination by
Company or Consultant pursuant to Section 3.2 or (b) the first anniversary of
the Effective Date, on which date this Agreement will terminate unless further
extended in writing by Company and Consultant.
Article Four
Compensation and Expenses
4.1 Compensation to Consultant: During the Term, Company will compensate
Consultant for providing the Services by the payment of the compensation set
forth in Schedule B (the "Compensation"). Payment of Compensation due to
Consultant shall be made in accordance with Section 4.4, as applicable.
4.2 Expenses: As part of the compensation payable to Consultant pursuant to
Section 4.1, Consultant will be entitled to reimbursement for the following out
-of-pocket expenses incurred by Consultant in connection with the provision of
the Services or otherwise incurred on behalf of Company, in all cases at
Consultant's actual cost without any markup or increase:
a. Contractors: Company will reimburse Consultant for fees and expenses paid
or payable by Consultant to any Contractor engaged by Consultant in respect of
those Services provided by such Contractor, provided that the engagement of
such Contractor by Consultant and the incurrence of such fees and expenses have
been authorized by Company in advance.
b. Service Providers: Company will reimburse Consultant for fees and expenses
paid or payable by Consultant to any Service Provider engaged by Consultant in
respect of those Services provided by such Service Provider, provided that the
engagement of such Service Provider by Consultant and the incurrence of such
fees and expenses have been authorized by Company in advance.
c. Airfare: Company will reimburse Consultant for airfare incurred by
Consultant (and its Employees, Contractors, and Service Providers), if the
travel for which airfare is incurred is authorized by Company in advance.
d. Ground Transportation: Company will reimburse Consultant for rental car,
taxi, and other ground transportation charges, including bridge tolls and
similar expenses, incurred by Consultant (and its Employees, Contractors, and
Service Providers) in the course of travel that has been authorized by Company
in advance.
e. Lodging and Meals: Company will reimburse Consultant for reasonable lodging
and meal expenses incurred by Consultant (and its Employees, Contractors, and
Service Providers) in the course of travel that has been authorized by Company
in advance. Consultant will not be entitled to reimbursement for lodging or
meals purchased for individuals other than Employees, Contractors, and Service
Providers assigned to the performance of Services.
f. Telephone: Company will reimburse Consultant (and its Employees,
Contractors, and Service Providers) for long distance and toll telephone calls
placed by Consultant and relating to the provision of Services.
g. Delivery and Copying: Company will reimburse Consultant for messenger
services, for overnight delivery and express mail services, for telecopying
services, and for copying services or for use of Consultant's office
photocopier at a rate not to exceed ten cents ($.10) per page.
h. Materials: Company will reimburse Consultant for materials and supplies
provided by Consultant to Company, purchased by Consultant for use in
connection with the provision of Services, or otherwise utilized by Consultant
in connection with the provision of Services, provided that such materials and
supplies are of more than nominal value and their provision to Company or
utilization by Consultant are authorized by Company in advance.
i. Research: Company will reimburse Consultant for the costs of market segment
research, competitive analysis research, and valuation research undertaken by
third Persons, provided that the engagement of such third Persons is approved
in advance by Company.
j. Taxes: Company will reimburse Consultant for Taxes, other than income and
franchise Taxes paid or payable by Consultant in respect of Compensation paid
to Consultant, paid by Consultant in connection with the provision of the
Services to Company.
4.3 Taxes: All Compensation paid to Consultant pursuant to Section 4.1 shall
be paid without withholding, set off, or deduction of any kind whatsoever,
except as otherwise required by applicable Laws. Consultant will be responsible
for the payment of all income and franchise Taxes that arise from the payment
of Compensation to Consultant under this Agreement. Any Taxes other than
income and franchise Taxes that arise from the payment of Compensation to
Consultant under this Agreement, including, but without limitation, federal,
state, and local privilege and excise Taxes attributable to the Services or the
provision thereof, shall be the responsibility of Company and if paid by
Consultant shall be added to an invoice as an expense to be reimbursed by
Company.
4.4 Non-Cash Compensation: Compensation payable to Consultant in the form of
stock warrants, capital stock, or other securities will be payable in the manner
provided in Schedule B. In the event Company fails timely to issue any stock
warrant, capital stock, or other securities, or otherwise comply with its
obligations in respect of any non-cash Compensation, in accordance with Schedule
B, Consultant, at its election, may (i) suspend all Services then being
provided to Company, and/or (ii) exercise any Rights Consultant may have under
applicable Law or otherwise in respect of Company's failure to comply with such
obligations.
Article Five
Certain Covenants
5.1 Confidentiality: Consultant acknowledges that in the course of providing
the Services to Company under this Agreement, Consultant will or may obtain
certain Confidential Information, which Confidential Information has been or
will be uniquely developed by Company and cannot be readily obtained by third
Persons from outside sources. Consultant accordingly agrees as follows:
a. Covenant of Confidentiality: Consultant agrees that all Confidential
Information communicated in connection with this Agreement or the provision of
the Services to Consultant by, or otherwise belonging to, Company and its
Affiliates, or their customers, whether before or after the Effective Date,
shall be and remain the property of Company, shall at all times be held in
confidence, and shall not be disclosed by Consultant to third-parties (other
than (i) Employees, Contractors, and Service Providers assigned to provide
Services hereunder or (ii) pursuant to the order of any Tribunal) without the
prior written consent of Company.
b. Care of Confidential Information: Consultant will protect Confidential
Information communicated to it using at least the same degree of care, but no
less than reasonable care, to prevent the unauthorized use, disclosure, or
publication of such Confidential Information as Consultant uses to protect its
own confidential information of like nature. Consultant will be deemed to have
discharged its obligations concerning the care of Confidential Information if
Consultant has exercised this degree of care and if upon discovery of and use
or disclosure not authorized or permitted by, or pursuant to, this Agreement
Consultant uses its good faith efforts to prevent any further use or disclosure
and promptly notifies Company of such unauthorized use or disclosure and the
steps it is taking, or proposes to take, to prevent further unauthorized use or
disclosure.
c. Use of Confidential Information: Consultant will use the Confidential
Information obtained by it solely for purposes related to the provision of the
Services and for no other purpose.
d. Return of Confidential Information: Promptly after termination of this
Agreement, Consultant will surrender to Company all data, lists, books,
materials, and records of or pertaining to any Confidential Information
obtained in connection with this Agreement or the provision of the Services
hereunder, including any copies thereof and all property in the possession of
Consultant belonging to Company or any of its Affiliates.
e. Right to Injunction: Consultant acknowledges that a violation or attempted
violation on Consultant's part of any agreement in this Section 5.1 will cause
irreparable damage to Company and its Affiliates, and accordingly Consultant
agrees that Company shall be entitled as a matter of right to an injunction,
out of any court of competent jurisdiction, restraining any violation or
further violation of such agreements by Consultant; such Right to an
injunction, however, shall be cumulative and in addition to any other remedies
Company may have.
f. Survival: The terms and agreements set forth in this Section 5.1 shall
survive expiration of the Term or the termination of this Agreement for any
reason, and shall remain in effect for the period of 12 months following the
expiration of the Term or the termination of this Agreement. The existence of
any claim of Consultant, whether predicated on this Agreement or otherwise,
shall not constitute a defense to the enforcement by Company of the agreements
contained in this Section 5.1.
5.2 Inventions or Discoveries: Either individually or jointly with others,
Consultant acknowledges that during the Term it may discover, conceive, make,
perfect, or develop inventions, discoveries, improvements, ideas, computer
programs, know-how, and/or data that result from the provision of the Services
and relate to the Business of Company ("Inventions). Consultant agrees to
disclose and assign to Company any and all such Inventions and shall promptly
execute and deliver all documents necessary to vest such Rights in Company.
5.3 Copyright: Consultant agrees that Company shall own all original written
materials, including programming documentation, originated, and prepared
specifically for Company pursuant to this Agreement. Consultant also
acknowledges that such copyrightable works are "works made for hire" under U.S.
copyright laws. Consultant further agrees, if so requested, and at Company's
expense, to execute written acknowledgments or assignments of copyright
ownership of works covered by this Agreement as may be necessary to preserve or
vest such Rights in Company. Consultant further waives and agrees not to
assert any Rights, if any, to attribution and integrity ("moral rights") that
Consultant may have in any such copyrightable works.
5.4 Non-Solicitation: During the Term and for a period of 12 months after the
expiration or earlier termination of this Agreement, neither party to this
Agreement will hire or solicit for hire any employee of the other party, or of
any Affiliate thereof, with whom it has had contact in connection with the
provision of the Services under this Agreement without the express written
consent of the other party. The foregoing notwithstanding, in the event either
party breaches the agreement of such party to refrain from hiring any employee
of the other party contained in this Section 5.4, such party will be obligated
to pay the non-breaching party an amount equal to 50% of the then current
annual salary of the employee who is wrongfully hired as compensation for the
expense incurred, or anticipated to be incurred, in replacing such employee.
Article Six
Exculpation and Indemnification
6.1 Exculpation: Neither Consultant, nor any of its shareholders, members,
directors, managers, officers, employees, contractors, agents, representatives,
or attorneys, nor any of Consultant's Affiliates, Contractors, or Service
Providers, nor any of their respective partners, shareholders, members,
directors, managers, officers, employees, contractors, agents, representatives,
or attorneys, as applicable, shall be liable to Company, or any Affiliate of
Company, for honest mistakes of judgement, or for action or inaction, taken
reasonably and in good faith for a purpose that was reasonably believed to be
in the interests of Company, or for losses due to such mistakes, action, or
inaction, or to the negligence, dishonesty, or bad faith of any employee,
contractor, or other agent of Consultant or any of Consultant's Affiliate's,
Contractors', or Service Providers' employees, contractors, or agents; provided,
that such employee, contractor, or agent was selected, engaged, or retained
and supervised with reasonable care; and provided, that this Section 6.1 shall
not extend to any action which constitutes fraud, willful misconduct, gross
negligence, or a material breach of this Agreement. Consultant may consult
with counsel and accountants in respect of the provision of the Services and be
fully protected and justified in any action or inaction that is taken or not
taken in accordance with the advice or opinion of such counsel or accountants,
provided that they shall have been selected with reasonable care.
Notwithstanding any of the foregoing to the contrary, the provisions of this
Section 6.1 shall not be construed so as to relieve (or attempt to relieve) any
Person of any liability by reason of recklessness or intentional wrongdoing to
the extent (but only to the extent) that such liability may not be waived,
modified, or limited under applicable Law, but shall be construed so as to
effectuate the provisions of this Section 6.1 and of Section 6.2 to the fullest
extent permitted by law.
6.2 Indemnification by Company: Company agrees to, and does hereby, indemnify
Consultant and Consultant's shareholders, members, directors, managers,
officers, employees, contractors, agents, attorneys, and representatives, and
Consultant's Affiliates, Contractors, and Service Providers, and their
respective partners, shareholders, members, directors, managers, officers,
employees, agents, attorneys, and representatives, against all claims, damages,
losses, and expenses, including reasonable attorneys' fees and expenses,
arising out of Company's performance under this Agreement or otherwise with
respect to the Business and/or the Services that are caused in whole or in part
by Company's willful misconduct or grossly negligent act or omission or that
are caused by the willful misconduct or grossly negligent act or omission of
any Affiliate of Company, or of any Person employed or engaged by Company for
whose acts Company may be liable.
6.3 Indemnification by Consultant: Consultant agrees to, and does hereby,
indemnify Company and Company's shareholders, members, directors, managers,
officers, employees, contractors, agents, attorneys, and representatives
against all claims, damages, losses, and expenses, including reasonable
attorneys' fees and expenses, arising out of Consultant's provision of the
Services under this Agreement that are caused in whole or in part by
Consultant's willful misconduct or grossly negligent act or omission or that
are caused by the willful misconduct or grossly negligent act or omission of
any Affiliate of Consultant, or of any Person employed or engaged by Consultant
for whose acts Consultant may be liable.
Article Seven
Miscellaneous
7.1 Headings: The headings, captions, and arrangements used in this Agreement
are for convenience only and do not limit, amplify, or modify the terms of this
Agreement.
7.2 Communications: Unless specifically otherwise provided, whenever this
Agreement requires or permits any consent, approval, notice, request, or demand
from one party to another, such communication must be in writing (which may be
by facsimile transmission or email acknowledged by the recipient) to be
effective and shall be deemed to have been given on the day delivered or, if
mailed, on the third Business Day after it is enclosed in an envelope,
addressed to the party to be notified at the address stated below, properly
stamped, sealed, and deposited in the appropriate official postal service, or
if emailed, on the day acknowledged. For notice to be effective to the Company
, all members of the current Board of Directors must be notified in accordance
with this paragraph
Until changed by notice, the address, facsimile number, and email address for
each party is as follows:
For the Company: National Health & Safety Corporation:
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For the Consultant: First Advisors, Inc.
Attn: President
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7.3 Survival: All covenants, agreements, representations, and warranties made
in this Agreement shall survive all closings under this Agreement and, to the
extent expressly stated in certain Sections of this Agreement, the expiration
of the Term or the early termination of this Agreement.
7.4 Governing Law: THIS AGREEMENT IS BEING EXECUTED AND DELIVERED, AND IS
INTENDED TO BE PERFORMED, IN THE STATE OF TEXAS, AND THE LAWS (OTHER THAN
CONFLICT OF LAWS PROVISIONS THEREOF) OF THE STATE OF TEXAS AND OF THE UNITED
STATES OF AMERICA SHALL GOVERN THE RIGHTS AND DUTIES OF THE PARTIES AND THE
VALIDITY, CONSTRUCTION, ENFORCEMENT, AND INTERPRETATION OF THIS AGREEMENT.
7.5 Mediation: Except for matters following under the provisions for
injunctive relief set forth in Article Five, any controversy or claim arising
out of or relating to this Agreement, or a breach of any provision hereof,
shall first be submitted to mediation before a mediator in ▇▇▇▇▇▇ County, Texas
who is mutually acceptable to Company and Consultant. In the event Company
and Consultant cannot reach agreement as to a mutually acceptable mediator,
then each of Company and Consultant shall select a mediator in ▇▇▇▇▇▇ County,
Texas, and the two individuals so selected shall then select a third individual
who shall serve as the mediator pursuant to this Section 7.5. Any mediation
conducted under this Section 7.5 shall be conducted in accordance with the
Commercial Financial Disputes Mediation Rules of the American Arbitration
Association.
7.6 Arbitration: Except for matters following under the provision for
injunctive relief set forth in Article Five, any controversy or claim arising
out of or relating to this Agreement, or a breach of any provision hereof, if
not resolved by mediation pursuant to Section 7.5, shall be settled by binding
arbitration held in ▇▇▇▇▇▇ County, Texas in accordance with the Commercial
Financial Disputes Mediation Rules of the American Arbitration Association, and
the award rendered by the arbitrators shall be entered in any court having
jurisdiction thereof. Disputes resolved by arbitration will be resolved by a
panel of three arbitrators unless the parties agree to resolution by a single
arbitrator. Prior to the commencement of hearings, each of the arbitrators
shall provide an oath of impartiality.
7.7 Venue: Any litigation arising out of or in connection with this Agreement,
whether initiated by Company or Consultant, shall be brought in the district
courts of ▇▇▇▇▇▇ County, Texas, or in the United States District Court for the
Western District of Texas, Austin Texas.
7.8 Joint Defense: If Company and Consultant are named as defendants in the
same legal proceeding (whether in court, an arbitration proceeding, a
governmental investigation, or otherwise), or in similar or related legal
proceedings, the sharing of information, strategies, documents, or exhibits,
joint participation in interviews with witnesses or discussions with consulting
experts or others, or similar cooperative action taken by them in connection
with such proceedings shall be subject to a "joint defense" privilege and each
of them shall, and shall use commercially reasonable efforts to cause their
counsel and employees and agents to, maintain as confidential any such shared
information to the same extent that such party maintains the confidentiality
of other privileged information (but shall not have the Right to waive such
privilege without the written consent of the other party to the proceeding).
7.9 Attorneys' Fees: In any action to enforce this Agreement, the prevailing
party shall be entitled to recover all out-of-pocket costs and expenses, and
reasonable attorneys' fees, in addition to any other relief to which it may be
entitled.
7.10 Invalid Provisions: If any provision of this Agreement is held to be
illegal, invalid, or unenforceable, such provision shall be fully severable;
this Agreement shall be construed and enforced as if such provision had never
comprised a part hereof; and the remaining provisions shall remain in full
force and effect and shall not be affected by such provision or by its
severance. Furthermore, in lieu of such provision there shall be added
automatically a provision as similar in terms to such illegal, invalid, or
unenforceable provision as may be possible and be legal, valid, and enforceable.
7.11 Entirety and Amendments: THIS AGREEMENT REPRESENTS THE FINAL AGREEMENT
BETWEEN THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS BY THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES. Only a written instrument can amend this agreement. This written
instrument must be executed jointly by an authorized officer of Company and
Consultant. Further, this agreement can be supplemented only by documents
delivered in accordance with the express terms of this agreement.
7.12 Waivers: No course of dealing nor any failure or delay by either party to
this Agreement or by such party's officers, managers, directors, employees,
representatives, or attorneys with respect to exercising any Right of such
party hereunder shall operate as any waiver thereof under this Agreement. A
waiver must be in writing and signed by the party granting such waiver to be
effective, and such waiver will be effective only in the specific instance and
for the specific purpose for which it is given.
7.13 Multiple Counterparts: This Agreement has been executed in a number of
identical counterparts, each of which shall be deemed an original for all
purposes and all of which constitute, collectively, one agreement; but, in
making proof of this Agreement, it shall not be necessary to produce or
account for more than one such counterpart.
7.14 Parties Bound; Assignments: This Agreement is binding upon, and inures to
the benefit of, Company, Consultant, and their respective successors and
assigns; provided that Consultant may not, without the prior written consent of
Company, assign any Rights, duties, or obligations hereunder, and any
purported assignment in violation of the foregoing shall be void and
ineffective.
7.15 Publicity: Consultant will submit to Company all advertising, sales
promotion, press releases, and other publicity relating to this Agreement or
the Services performed hereunder in which Company's name or ▇▇▇▇ is mentioned;
and Consultant further agrees not to publish or use such advertising, sales
promotion, press releases, or publicity without Company's prior approval.
7.16 Compliance with Company Policy: Consultant's personnel performing
Services on Company's premises shall observe in all material respects all
security and safety rules and all other applicable rules and policies in force
at the site of the Services.
7.17 Conflicts of Interest: This Agreement is intended to secure to Company
Consultant's assistance and cooperation and shall preclude Consultant from
performing services similar to the Services for other Persons that, in the
reasonable judgment of Consultant, would result in a conflict of interest with
the contractual relationship represented by this Agreement. Consultant
represents that it has advised Company in writing prior to the Effective Date
of any relationship with any other Person, including competitors of Company,
which, in the judgment of Consultant, would present a conflict of interest or
which, in the judgment of Consultant, would prevent Consultant from performing
the Services in accordance with this Agreement. The foregoing notwithstanding
, nothing contained in this Agreement is intended to restrict Consultant from
providing consulting services to, or engaging in any contractual relationship
with, any Person so long as such services or other relationship will not create
a conflict of interest or otherwise contravene the terms of this Agreement.
7.18 Force Majeure: Consultant shall not be liable to Company due to any
failure or delay in performance of its obligations under this Agreement because
of circumstances beyond its control, including but not limited to acts of God,
acts of the public enemy, war, civil disorders, flood, fire, riot, accident,
strikes or work stoppages, lockouts, embargo, inability to obtain phone lines,
government action (including enactment of any Laws which restrict or prohibit
the providing of the Services contemplated by this Agreement), and other causes
beyond its control whether or not of the same class or kind as specifically
named above. If Consultant is unable to substantially perform its obligations
hereunder for any of the reasons described in this Section 7.18, the obligation
of Consultant shall be suspended for the duration of, and to the extent of,
such force majeure event; provided, that Consultant shall promptly notify
Company of its inability to perform, the steps it proposes to take to rectify
or mitigate such inability, and the anticipated length of such inability.
7.19 Further Assurances: From time to time after the Effective Date, each
party will, at the expense of the requesting party, execute and deliver such
further instruments and documents and take such other action as the other party
to this Agreement may reasonably request in order more effectively to carry
out or confirm the intent of this Agreement.
7.20 Execution by Facsimile: The manual signature of any party hereto that is
transmitted to any other party by facsimile shall be deemed for all purposes to
be an original signature. Any party that delivers a signature page by
facsimile agrees to deliver an original manually signed counterpart of such
party's signature page to any party who requests it promptly after receipt of
such request.
7.21 No Strict Construction: This Agreement is the result of substantial
negotiations between Company and Consultant and their respective counsel and
has been prepared by their joint efforts. Accordingly, the fact that one
party's counsel may have drafted this Agreement or any portion hereof is
immaterial and this Agreement will not be strictly construed against any party.
7.22 Construction: Whenever the context requires, the gender of all words used
in this Agreement includes the masculine, feminine, and neuter. The term
"including" and variations of the term mean "including without limitation."
Signature Page Follows
In Witness Whereof, as of the Effective Date, the authorized officers, or
representatives of the Company and Consultant have signed and delivered this
Agreement to the other.
Company: Consultant:
National Health & Safety Corporation First Advisors, Inc.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ Davis______________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇ Name: ▇▇▇▇▇▇ Davis______________
Title: President & CEO Title: Senior Vice President___
Schedule A
The Services
The Services delivered to Company by Consultant under this Agreement are those
indicated by the insertion of an "x" (or other appropriate marking) in the box
preceding each service:
1. Company Overview and Business Plan.
X 1.1 Analysis of Company's current status, with the objective of
assisting Company in defining specific and general areas for improvement and
expansion of the Business.
X 1.2 Review of Company's business and/or strategic plan (the
"Business Plan"), with the objective of assisting Company in polishing and
refining the Business Plan for use in connection with Company's current or
future efforts to attract investment capital. (Consultant will have the
obligation to write, prepare, and continuously update the Business Plan).
X 1.3 Review of Company's financial statements and financial
projections, with the objective of assisting Company in presenting its historic
and its projected future financial performance accurately and clearly to
prospective bankers, investors, and other parties.
X 1.4 Review of Company's capital structure and capitalization, with
the objective of assisting Company in developing an appropriate capital
structure and appropriate capitalization for its desired future growth, and for
developing a timetable and a plan for seeking and obtaining the capital
required by Company to achieve its desired goals.
X 1.5 Assist Company in assessing the valuation of Company for the
purposes of setting the exercise price of stock options granted to directors,
officers, employees, and consultants, and for the purpose of establishing a
valuation for financing transactions that might be undertaken by Company.
X 1.6 Review of Company's marketing and sales plan, with the
objective of assisting Company in polishing and refining its marketing and
sales plan for use in connection with Company's current and future efforts to
grow its revenues.
X 1.7 Analysis of Company's target market, with the objective of
assisting Company to understand its market and competition and to position its
products and services within its target market.
2. Management and Personnel
X 2.1 Review of management structure, and assessment of strengths and
weaknesses of members of management team, with the objective of making
recommendations regarding improvements to the management team of Company.
X 2.2 Assistance with recruitment of directors, advisory board
members, officers, managers, and other key personnel, with the objective of
assisting Company assemble a management team appropriate for the successful
execution of Company's Business Plan.
X 2.3 Review of Company's compensation of directors, advisory board
members, officers, managers, and key personnel, including review of Company's
incentive plan, with the objective of assisting Company with the development
and implementation of compensation and incentive arrangements appropriate for
the successful execution of Company's Business Plan.
X 2.4 Review of Company's employment agreements, employee
non-disclosure and inventions agreements, and other agreements with employees,
with the objective of assuring that Company's contractual relationships with
its employees are appropriate.
X 2.5 Review of Company's employee benefits program, employee
policies, recruiting procedures, employee manuals, and the like, with the
objective of establishing appropriate employee benefits policies and
procedures.
3. Financing.
X 3.1 In light of Company's capital structure, financial condition,
and financing needs, assist Company with the development of a financing plan
(which may include a proposed term sheet summarizing the proposed terms of the
financing desired or required by Company), with the objective of assisting
Company in attracting the financing it requires for the execution of its
Business Plan.
X 3.2 Assist Company with the development of a written and oral
presentation to be delivered to prospective investors or financing sources,
with the objective of presenting Company's Business Plan in a manner that will
attract financing.
X 3.3 Assist Company in identifying prospective investors or
financing sources who are suitable prospects for debt and/or equity financing
required by Company.
X 3.4 Make introductions to specific prospective investors or
financing sources who are suitable prospects for debt and/or equity financing
required by Company (provided, that in connection with introductions to
prospective investors or financing sources Consultant's role will be limited to
that of "finder" only, and under no circumstances will Consultant be obligated
to solicit any prospective investor or financing source to invest in or
provide financing to Company, nor to sell any security issued by Company).
X 3.5 Assist Company in evaluating potential investors or financing
sources for their suitability as financing sources for Company.
X 3.6 Review offers and term sheets submitted by prospective
investors or financing sources and advise Company in respect of Company's
negotiations with one or more prospective investors or financing sources
(provided, that under no circumstances will Consultant be obligated to engage
in any negotiations with any prospective investor or financing source on behalf
of Company).
X 3.7 Assist Company with the completion of financing documents to be
utilized in connection with proposed financing transactions.
4. Strategic and Professional Relationships.
X 4.1 Assist Company with the development of a plan for establishing
strategic relationships with prospective suppliers, customers, manufacturers,
distributors, licensors, licensees, advisors, and others with whom a
relationship might be beneficial to the development of the Business.
X 4.2 Make introductions to specific prospective strategic suppliers,
customers, manufacturers, distributors, licensors, licensees, advisors, and
others consistent with Company's plan for establishing strategic relationships.
X 4.3 Assist Company in assessing its professional services needs in
one or more of the following areas (as requested by Company and as agreed by
Consultant): accounting; legal; public relations; advertising; graphic design;
printing/production; insurance; website development; real estate; telecom;
hardware; software; and production systems; and make introductions to specific
persons in these areas.
Schedule B
Compensation
During the initial term of the Agreement and any renewals, the Company agrees
to pay the Consultant in Common Stock of the Company. The Consultant will be
paid a base of 750,000 shares each month and may be paid up to, but not
exceeding, 1,250,000 shares per month. Payment of such stock shall be in
advance, on the first day of each month, to the Consultant's brokerage firm as
designated in writing by the Consultant.
The Consultant acknowledges that the Common Stock to be issued under this
Consulting Agreement will constitute "restricted securities" under Rule 144
promulgated by the Securities and Exchange Commission. The Consultant
represents that it will not sell or transfer the Common Stock so issued except
in compliance with the Securities Act of 1933.
The Company agrees to prepare and file with the Securities and Exchange
Commission, at its sole expense and promptly after the execution of this
Agreement, one or more registration statements on Form S-8 (or any equivalent
or successor form) to register all Common Stock paid to the Consultant under
this Agreement under the Securities Act of 1933.
Management Services Consulting Agreement
National Health & Safety Corporation and First Advisors, Inc.
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