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CONSULTING AGREEMENT
This Consulting Agreement ("Agreement") is entered into this 26 day of
September, 1995, is to be effective October 1, 1995, and sets forth a new
understanding which has been reached between Xxxxx Xxxxx & Associates (the
"Consultant") and Bikers Dream, Inc. (the "Company"), concerning the provision
of certain management consulting, financial advisory and investment banking
services by the Consultant to the Company. This Consulting Agreement shall not
supplant the Consulting Agreement of April 6, 1995 ("Initial Consulting
Agreement"), which shall also continue in force until its expiration date of
October 4, 1995.
I. Purpose: The Company hereby engages the Consultant for a ten
month term commencing October 1, 1995 to render consulting advice to the
Company relating to management, financial and similar matters upon the terms and
conditions set forth herein.
II. Duties of the Consultant: During the term of the Agreement,
the Consultant shall use its best efforts to provide the Company with such
regular and customary financial consulting advice and management consulting as
is reasonably requested by the Company consistent with the foregoing, and
shall use its best efforts to obtain a commitment from a reputable investment
banking firm to raise up to Ten Million ($10,000,000.00) Dollars of capital for
the Company.
A. The Consultant's duties may include, but will not
necessarily be limited to, providing recommendations concerning the following
financial and related matters:
1. Rendering advice with regard to internal
operations, including:
a. the formation of corporate goals and
their implementation;
b. revising the Company's business
plan;
c. the Company's financial structure,
including its divisions or
subsidiaries;
d. corporate organization and
personnel;
2. Rendering advice and assistance with regard
to any of the following corporate finance
matters:
a. changes in capitalization of the
Company;
b. changes in the Company's corporate
structure;
c. redistribution of shareholdings of
the Company's stock;
d. offerings of securities in public
transactions;
BIKERS DREAM, INC.
FORM SB-2
EXHIBIT 10.24
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e. sales of securities in private
transactions;
f. alternative uses of corporate
assets;
g. structure and use of debt; and
h. sales of stock by insiders;
3. Disseminating information about the Company
to the investment community at large;
4. Rendering advice and assistance in connection
with the preparation of annual and interim
reports and press releases;
5. Assisting in the Company's financial public
relations;
6. Arranging, on behalf of the Company, at
appropriate times, meetings with securities
analysts of major regional investment banking
firms;
7. Assistance in negotiations with regional
investment banking firms with the goal of
maximizing the evaluation of the Company and
procuring additional equity and debt capital;
8. introducing clients, customers or other
business opportunities with a view to
generating sales of goods or services by the
Company.
B. In addition to the foregoing, the Consultant agrees
to furnish advice to the Company in connection with (i) the acquisition and/or
merger of or with other companies, any divestiture or any other similar
transaction, or the sale of the Company itself (or any significant
percentage of the assets, subsidiaries or affiliates thereof, and (ii) bank
financing or any other financing from financial institutions.
C. The Consultant shall reader such other financial
advisory and investment and/or investment banking services as may from time to
time be agreed upon by the Consultant and the Company.
III. Compensation: The compensation provided for herein is
performance based; that is, contingent upon the achievements of certain goals
by the Company with the assistance of Consultants. In consideration for the
services rendered by the Consultant to the Company pursuant to this Agreement
(and in addition to its expenses), the Company shall compensate the Consultant
as follows:
A. The Consultant is entitled to receive a monthly fee
grant of 2,500 shares of the Company's common stock for the six month period
ending October 4, 1995, an aggregate of
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15,000 shares, pursuant to the Initial Consulting Agreement.
B. In addition, in consideration of Consultants'
assistance in placing the Company's $625,000.00 convertible debt offering, the
Company will grant to Consultant an option, in the form of the option attached
hereto, to purchase at any time within two years of the date of the grant
30,000 shares of the Company's common stock at a price of $2.50 per share.
C. In addition, in consideration of Consultants'
assistance in placing an additional $600,000 of the Company's convertible debt
and other services rendered and to be rendered pursuant to this Agreement, the
Company will pay Consultant the sum of $49,200.00, beginning October 1, 1995,
in the following increments:
On October 1, 1995, $4,200.00, and $5,000.00 per month on
November 1, 1995 and the first day of each month thereafter
until fully paid with the final payment due July 1, 1996.
D. In addition, the Consultant is assisting the Company
in raising up to $10,000,00.00 of additional capital through an investment
banker or bankers introduced by Consultant to the Company. Upon the successful
closing of an offering(s) through such an investment banker, the Company agrees
to grant to Consultant an option, in the form of the option attached hereto, to
purchase 10,000 shares of the Company's common stock for each $1,000,000 of
capital received by the Company in such offering(s), up to a maximum of 100,000
shares for $10,000,000 of capital received. The options shall be granted in
pro rata increments, e.g., 7,500,000 in capital raised equates to $75,000.00 in
options. The option shall be exercisable at a price of $2.50 per share, at any
time within two years after the date of completion of a successful financing
pursuant hereto.
E. The Company hereby grants to Consultant observer
status at meetings of its Board of directors, which may be effected by
telephone.
IV. Expenses: The Company shall reimburse the Consultant for the
Consultant's counsel and the Consultant's travel and out-of-pocket expenses
incurred in connection with the services performed by the Consultant pursuant
to the Agreement, provided that any expenses above $500.00 for any single item
shall be pre-approved by the Chief Financial Officer of the Company and, upon
reasonable request, may be advanced.
V. Trade Secrets of the Consultant: The Company acknowledges that
all opinions and advice (written or oral) given by the Consultant to the
Company in connection with the Consultant's engagement are intended solely for
the benefit and use of the Company in considering the transaction to which they
relate, and the Company agrees that no person or entity other than the Company
shall be entitled to make use of or rely upon the advice of the Consultant
given under the Agreement. The Company further acknowledges that any
information given to it by the Consultant, including the names of any funding
sources, ESOP consultants, brokerage houses or management consultants, are
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confidential, and are trade secrets proprietary to the Consultant, and during
the term of the Agreement and for 5 years thereafter the Company may make no
use of such information without the express written consent of the consultant.
VI. Registration Rights: The Company shall grant the Consultant
piggyback registration rights with respect to any shares issued to Consultants
pursuant to the Initial Consulting Agreement or shares issuable on exercise
of options granted to Consultant under this Agreement.
VII. The Consultant's Services to Others: The Company acknowledges
that the Consultant and its affiliates are in the business of providing
financial services and consulting advice to others. Nothing herein contained
shall be construed to limit or restrict the Consultant in conducting such
business with respect to others, or in rendering such advice to others.
VIII. Indemnification: The Company shall indemnify and hold the
Consultant harmless to the fullest extent usual and customary in relationships
of this nature. Consultant shall indemnify and hold the Company harmless from
damages accruing to third parties and the Company arising from the disclosure
of information known to Consultant to be inaccurate or misleading.
IX. The Consultant as Independent Contractor: The Consultant shall
perform its services under the Agreement as independent contractor and not as
an employee of the Company or an affiliate thereof.
X. Accurate Information: The Company hereby represents and
warrants that all information provided the Consultant pertaining to the Company
shall be true and correct; and the Company shall hold the Consultant harmless
from any and all liability, expenses or claims arising from the disclosure or
use of such information.
XI. Confidentiality: Right to Publish Tombstone: The parties
shall enter into a confidentiality agreement customary for relationships of
this nature in order to protect the confidentiality of proprietary business
information. The Company specifically acknowledges, however, that the
Consultant shall be entitled to publish or distribute notices in the nature of
so called "tombstone" advertisements to announce the closing of transactions
involving the Company.
XII. Applicable Law: The Agreement will be governed by and
construed under the laws of the State of California, and any action brought by
either party against the other party to enforce or interpret the Agreement
shall be subject to binding arbitration within such State. In the event of
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any such action, the prevailing party shall recover all costs and expenses
thereof, including reasonable attorney's fees, from the losing party.
The undersigned concur with the matters set forth in the
foregoing Agreement.
XXXXX XXXXX & ASSOCIATES
By: /s/ XXXX XXXXX
----------------------------------
THE COMPANY
By: /s/ XXXXXX XXXXXXXX
---------------------------------
Xxxxxx Xxxxxxxx, President
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OPTION AGREEMENT
THIS OPTION AGREEMENT (the "Agreement") is entered into as of
September 26, 1995 by and between Bikers Dream, Inc., a corporation organized
under the laws of the State of California ("Company") and Xxxxx, Xxxxx &
Associates, Inc. ("Optionee").
RECITALS
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WHEREAS, Company and Optionee have entered into a Consulting Agreement
dated June 12, 1995 (the "Initial Consulting Agreement") and a second
Consulting Agreement dated September ____, 1995, ("Consulting Agreement"); and
WHEREAS, the company, pursuant to the terms of the Consulting
Agreement, has agreed to grant Optionee an option to purchase shares of the
Company's Common Stock in accordance with the terms of the Consulting
Agreement.
NOW THEREFORE, it is agreed:
1. Grant of Option. Company grants to Optionee on the date
hereof (the "Date of Grant") the irrevocable right and option (the "Option") to
purchase thirty thousand (30,000) shares of the Company's Common Stock (the
"Shares") at a price of Two Dollars and fifty Cents ($2.50) per share.
2. Option Term. The terms of the Option shall be for a period of
two (2) years commencing on the date hereof.
3. Exercise of Option. The Option shall be exercisable as
follows:
3.1 Thirty thousand (30,000) Shares covered by the Option
and shall become exercisable and vest upon the
execution of this Agreement.
4. Method of Exercise. The Option may be exercised by giving
written notice of exercise of the Option to the Company at the address and in
the manner set forth below. The notice shall state Optionee's election to
exercise the Option and this number of Shares with respect to which the Option
is being exercised. The notice of exercise shall be accompanied by full
payment (in cash or by check) of the amount of the purchase price of the Shares
as to which the Option is being exercised. A certificate or certificates for
the Shares as to which the Option is exercised shall be delivered to Optionee
as soon as practicable after the notice and payment has been received by the
Company.
5. Investment Representations. By accepting this Option, Optionee
represents, acknowledges and agrees that:
(a) Optionee is acquiring the Option and any Shares
acquired upon exercise of the Option for Optionee's
own account or for Xxxx Xxxxx and Xxxxxx Xxxxx,
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principals of Optionee, not with a view to, or for
sale in connection with, any distribution thereof.
(b) The Shares shall not be sold or transferred until
either (i) they first shall have been registered
under the Securities Act of 1933, or (ii) the Company
first shall have been furnished with an option of
legal counsel, reasonably satisfactory to the
Company, to the effect that such sale or transfer is
exempt from the registration requirements of the
Securities Act of 1933.
(c) The certificates evidencing the Shares issued upon
exercise of the Option will bear the following
restrictive legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 ("THE ACT") AS
AMENDED, AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED
UNLESS AND UNTIL SUCH SHARES ARE REGISTERED UNDER THE ACT OR
AN OPTION OF COUNSEL SATISFACTORY TO THE COMPANY IS OBTAINED
TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED."
6. Privileges of Stock Ownership. Neither Optionee nor any
transferee of Optionee shall have any of the rights or privileges of a
stockholder of the Company with respect to any Shares issuable upon the
exercise of the Option until certificates representing such Shares shall have
been issued and delivered.
7. Adjustments to Number and Purchase Price of Shares. If the
outstanding shares of the Common Stock of the Company are increased, decreased,
changed into or exchanged for a different number or kind of shares or
securities of the Company through merger, consolidation, combination, exchange
of shares, other reorganization, recapitalization, reclassification, stock
dividend, stock split or reverse stock split, an appropriate and proportionate
adjustment shall be made in the maximum number and kind of shares as to which
the Option may be exercised pursuant to this Agreement. Any such adjustment in
shares subject to the Option shall be made without change in the aggregate
purchase price applicable to the unexercised portion of the Option, but with a
corresponding adjustment in the price for each share covered by the Option.
Upon the dissolution or liquidation of the Company, or upon a
reorganization, merger or consolidation of the Company with one or more
corporations as a result of which the Company is not the surviving corporation,
or upon a sale of all or substantially all of the property of the Company to
another person or persons, appropriate provision shall be made in writing in
connection with such transaction for the continuance of the option and for the
assumption of the obligations of the Company hereunder, or the substitution for
the Option granted hereunder of new options covering the stock of a successor
corporation, or a parent or subsidiary thereof, with appropriate adjustment as
to the number and kind of shares and exercise prices.
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8. Registration Rights. The Optionee shall be entitled to the
following registration rights with respect to the Shares, regardless of whether
the Option has been exercised at the time of registration:
(a) If, at any time after the date hereof, the Company
proposes to register any of its securities under the
Securities Act of 1933 (the "Act"), it shall give to
the Optionee written notice of its intention in that
regard and use its best efforts to effect the
registration under such Act, if such registration is
permissible, of such number of Shares as may be
specified by written notice from the Optionee
delivered to the Company within twenty (20) days
after such notice is given (which notice shall be
deemed to have been given upon the deposit thereof in
first class or express U.S. mail, postage prepaid,
addressed to the Optionee at the address of such
person as shown on the books of the Company). The
costs and expenses of such offering, including, but
not limited to, legal fees, special audit fees,
printing expenses, filing fees, fees and expenses
relating to qualifications under state securities or
blue sky laws and premiums for insurance, if any,
incurred by the Company in connection with any
registration made pursuant to this Section 8 shall be
borne entirely by the Company.
(b) In the event of any registration of Shares pursuant
hereto, the Company shall indemnify the holders of
the Shares being registered, their officers and
directors and each person, if any, who controls such
holders within the meaning of Section 15 of the
Securities Act of 1933, against all losses, claims,
damages and liabilities caused by any untrue
statement or alleged untrue statement of a material
fact contained in any registration statement or
prospectus (and as amended or supplemented) or any
preliminary prospectus or any offering circular,
relating to such registration, or caused by any
omission or alleged omission to state a material fact
required to be stated therein or necessary to make
the statements therein not misleading in light of the
circumstances under which they are made, unless such
statement or omission was made in reliance upon and
in conformity with information furnished in writing
to the Company by the holder expressly for use
therein. The obligations of the Company to register
any of its securities in accordance with the
foregoing shall be subject to the condition that the
Optionee shall agree in writing to indemnify the
Company, its officers and directors, and each person,
if any, who controls the Company within the meaning
of Section 15 of the Securities Act of 1933, and
each person, if any, who controls such underwriter
with respect to losses, claims, damages and
liabilities caused by any untrue statement or
omission made in reliance upon and in conformity with
information furnished in writing by the Optionee to
the Company expressly for use in such registration
statement, prospectus or offering circular.
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(c) Upon the exercise of registration rights pursuant
hereto, the Optionee agrees to supply the Company
with such information as may be required by the
Company to register or qualify the Shares as
described herein.
(d) The registration rights granted to the Optionee
pursuant to this Agreement shall also be for the
benefit of, and enforceable by, any subsequent holder
of the Shares, whether or not any express assignment
of such rights to any such subsequent holder is made.
9. General Provisions.
(a) The subject headings of the sections and paragraphs
of this Agreement are included for purposes of
convenience only, and shall not affect the
construction or interpretation of any of its
provisions.
(b) This Agreement constitutes the entire agreement
between the parties, pertaining to the subject matter
contained in it and supersedes all prior and
contemporaneous agreements, representations and
understandings of the parties. No supplement,
modification, or amendment of this Agreement shall be
binding unless executed in writing by all of the
parties. No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a
continuing waiver. No waiver shall be binding unless
executed in writing by the party making the waiver.
(c) This Agreement may be executed simultaneously in one
or more counterparts, each of which shall be deemed
an original, but all of which together shall
constitute one and the same instrument.
(d) This Agreement shall be binding on, and shall inure
to the benefit of, the parties to it and their
respective heirs, legal representatives, successors
and permitted assigns.
(e) Any and all notices, demands or other communications
required or desired to be given hereunder by any
party shall be in writing and shall be validly given
or made to another party if given by personal
delivery, telex, facsimile, telegram or if deposited
in the United States mail, certified or registered,
postage prepaid, return receipt requested. If such
notice, demand or other communication is given by
personal delivery, telex, facsimile or telegram,
service shall be conclusively deemed made at the time
of receipt. If such notice, demand or other
communication is given by mail, such notice shall be
conclusively deemed given forty-eight (48) hours
after the deposit thereof in the United States mail
addressed to the party to whom such notice, demand
of other communication is to be given as hereinafter
set forth:
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To Company: Bikers Dream, Inc.
0000 Xxxxxxx Xxx
Xxxxx Xxx, Xxxxxxxxxx 00000
To Optionee: At the Address set forth below his
name on the signature page of this
Agreement.
Any party may change its address for purposes of this paragraph by
giving the other parties written notice of the new address in the manner set
forth above.
IN WITNESS WHEREOF, the parties have executed this Option Agreement
as of the day and year first above written.
"COMPANY" "OPTIONEE"
Bikers Dream, Inc. Xxxxx, Xxxxx & Associates, Inc.
By: /s/ XXXXXX XXXXXXXX By: /s/ XXXXXX XXXXX
--------------------------- -----------------------------
Xxxxxx Xxxxxxxx Its: Secretary/CFO
Its: President ------------------------
Address: 000 Xxxx Xxxxxx
Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
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