Exhibit 10.11
MCOM Management Corp
June 11, 2001
BY DHL COURIER
--------------
Xxxxxxxx.xxx, Corp.
00000 Xxxx Xxxxx Xxxxx, Xxxxx 000X
Xxx Xxxxx, XX 00000
Attn: Xx. Xxxxxx Paravia
Financial Consulting Agreement
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Our File: 2532-V
Dear Sirs:
Formalizing our earlier discussions, this is to acknowledge and confirm the
terms of our Financial Consulting Agreement ("Agreement") as follows:
1. Xxxxxxxx.xxx Corp. (the "Company") hereby engages MCOM Management Corp.
("MCOM") and MCOM hereby agrees to render services to the Company as a
financial consultant, strategic planner and advisor and as further
described herein.
2. Duties. During the term of this Agreement, MCOM shall provide advice and
consult with the Company concerning management, marketing, strategic
planning, corporate organization and structure, expansion of services, and
shall review and advise the Company regarding its overall progress, needs
and condition. MCOM agrees to provide on a timely basis the following
enumerated services plus additional services contemplated thereby:
a. Assist the Company in obtaining financing or partial financing as
needed.
b. Assist the Company in the implementation of short range and long
term strategic planning to fully develop and enhance the Company's
operations, resources, products and services;
c. Assist the Company in the implementation of a marketing program
with a view toward broadening the markets for its products and
services, particularly in the area of marketing to state
governments;
d. Assist the Company in development of third party marketing
partnerships, particularly with respect to the Company's "Play for
Fun" casino strategy.
e. Assist the Company in coordinating the publicity surrounding any
strategic or marketing "significant event" which will increase
visibility of the Company and materially affect the Company.
f. Arrange and conduct at least four meetings for the Company with
brokerage firms for the purpose of introducing the Company.
g. Coordinate both U.S. and international road shows at the Company's
request.
3. TERM. The term of this Agreement shall be for a six month period commencing
upon April 1, 2001.
4. COMPENSATION. As compensation for its services hereunder, the Company shall
issue to MCOM:
a. A warrant or option agreement to purchase 300,000 shares of the
Company's common stock at $0.25 per share, such warrant or option
agreement to include piggyback registration rights.
b. As compensation for any funds raised by the Company through its
Bridge Loan Subscription from any individual or investment banking
company introduced to the Company by MCOM, the Company shall pay
to MCOM a ten percent (10%) cash finder's fee and a ten percent
(10%) finder's fee payable in a warrant to purchase the Company's
common stock at $0.25 per share, such warrant agreement to include
piggyback registration rights.
d. Should the Company be successful in raising capital from any
individual or investment banking company introduced to the Company
by MCOM through an investment vehicle other than the aforesaid
Private Placement, any compensation due MCOM shall be negotiated
on a case by case basis.
e. Reimbursement of expenses -- MCOM will be reimbursed for all its
reasonable expenses, including authorized travel expenses incurred
on behalf of the Company in this matter. MCOM will seek prior
approval for any single expenditure in excess of $500.
6. CONFIDENTIALITY. MCOM will not disclose to any other person, firm,
corporation, nor use for its own benefit during or after the term of this
Agreement, any trade secrets
2
or other information designated as confidential by the Company which is
acquired by MCOM in the course of its performing services hereunder. (A
trade secret is information not generally known to the trade, which gives
the Company an advantage over its competitors. Trade secrets can include,
by way of example, products or services under development, production
methods and processes, sources of supply, customer lists, marketing plans
and information concerning the filing or pendency of patent applications.)
Any financial advice rendered by MCOM pursuant to this Consulting Agreement
may not be disclosed publicly in any manner without the prior written
approval of MCOM.
7. INDEMNIFICATION. The Company agrees to indemnify and hold MCOM harmless
from and against all claims, damages, liabilities, costs or expenses,
including reasonable attorney fees (collectively the "Liabilities") joint
and several, arising out of the performance of this Consulting Agreement,
whether or not MCOM is a party to such dispute. This indemnity shall not
apply however, and MCOM shall indemnify and hold the Company, its
affiliates, control persons, officers, employees and agents harmless from
and against all Liabilities, where under arbitration a final determination
that MCOM engaged in gross recklessness and willful misconduct in the
performance of its services hereunder which gave rise to the losses, claim,
damage, liability cost expense sought to be recovered hereunder (but
pending any such final determination, the indemnification and reimbursement
provision of this Consulting Agreement shall apply and the Company shall
perform its obligations hereunder to reimburse MCOM for its expenses.) The
provisions of this paragraph shall survive the termination and expiration
of this Agreement.
8. DILUTION. Regarding the aforementioned issuance of shares of common stock
and warrants, if at any time the Company shall (1) declare a dividend or
make a distribution on the Common Stock payable in shares of its capital
stock (whether shares of Common Stock or of capital stock of any other
class); (ii) subdivide, reclassify or recapitalize its outstanding Common
Stock into a greater number of shares; (iii) combine, reclassify or
recapitalize its outstanding Common Stock into a smaller number of shares,
or (iv) issue any shares of its capital stock by reclassification of its
Common Stock (including any such reclassification in connection with a
consolidation or a merger in which the Company is the continuing
corporation), the amount of Common Stock issued to MCOM or its designees at
the time of the record date of such dividend, distribution, subdivision,
combination, reclassification or recapitalization shall be adjusted so that
MCOM or its designees shall be entitled to receive the aggregate number and
kind of shares which it would have owned and been entitled to receive by
virtue of such dividend, distribution, subdivision, combination,
reclassification or recapitalization. Any adjustment required by this
paragraph shall be made immediately after the record date, in the case of a
dividend or distribution, or the effective date, in the case of a
subdivision, combination, reclassification or recapitalization.
We enclose two (2) original Agreements. If this Agreement is in accordance
with your understanding, please confirm by signing and returning to MCOM
Management Corp. one (1) original, retaining the other for your files.
3
AGREED TO BY MCOM MANAGEMENT CORP.:
Mr. Michael C.O. Morfit
President
AGREED TO BY XXXXXXXX.XXX CORP.
Xx. Xxxxxx Paravia President
4
December 12, 2001
BY DHL COURIER
--------------
Xxxxxxxx.xxx, Corp.
0000 Xxxxxxx Xxxxxx Xxxx
Xxx Xxxxx, XX 00000
Attn: Xx. Xxxxx X. Xxxxxx
FINANCIAL CONSULTING AGREEMENT
------------------------------
OUR FILE: 2532-V
Dear Sirs:
This is to acknowledge and confirm the terms of our Financial Consulting
Agreement ("Agreement") as follows:
1. Xxxxxxxx.xxx Corp. (the "Company") hereby engages MCOM Management Corp.
("MCOM") and MCOM hereby agrees to render services to the Company as a financial
consultant, strategic planner and advisor and as further described herein.
2. Duties. During the term of this Agreement, MCOM shall abandon all of its
outside business interests and provide advice and consult with the Company
concerning management, marketing, strategic planning, corporate organization and
structure, expansion of services, and shall review and advise the Company
regarding its overall progress, needs and condition. MCOM agrees to provide on a
timely basis the following enumerated services plus additional services
contemplated thereby:
a. Assist the Company in obtaining financing or partial financing as
needed.
b. Assist the Company in the implementation of short range and long
term strategic planning to fully develop and enhance the Company's
operations, resources, products and services;
c. Assist the Company in the implementation of a marketing program
with a view toward broadening the markets for its products and
services;
d. Assist the Company in obtaining licensing contracts, particularly
licenses for the Company's Server Platform and Sportsbook Module.
e. Assist the Company in coordinating the publicity surrounding any
strategic or marketing "significant event" which will increase
visibility of the Company and materially affect the Company.
f. Arrange and conduct at least four meetings for the Company with
brokerage firms for the purpose of introducing the Company.
g. Coordinate both U.S. and international road shows at the Company's
request.
3. Term. The term of this Agreement shall be for a two-year period commencing
upon October 1, 2001. MCOM for the past six months has exclusively worked on
Virtgame. Xxxxxxx Xxxxxx, the president of MCOM relocated his family to San
Diego from July to September to take a hands on approach. During the past six
months MCOM has been an integral part of the following.
-Developing and implementing Virtgame Las Vegas with Xxx Xxxxxx, Xxxxx
Xxxxxx, and Xxx Xxxxxx.
-Assisting in solidifying both the Codere and Caliente Relationship.
-Creating a relationship with Tel-Nor and Conax.
-Discussing merger and acquisition proposals with American Wagering and
the Silver Nugget.
-Assisting in all corporate filings and legal filings.
-Interviewing and hiring an I.R. firm
-Initiated and currently negotiating with Dr. Xx.xxx.
-Attended 3 gaming conferences on Virtgame's behalf
-Assisting in shareholder relations.
-meeting with potential investors
In summary MCOM has been an integral part of Virtgame's survival and will be a
key element in Virtgame's explosive future.
4. Compensation. As compensation for its services hereunder, the Company shall
issue to MCOM:
a. A monthly fee of $12,500.00, which pay shall be considered
retroactive to July, 2001, at which time MCOM abandoned each of its
outside business interests in order to work exclusively for the
Company. The payments from July 31 through December 31, 2001,
inclusive, i.e. $75,000, shall be deemed to have been paid as of the
date of this contract by reason of the Company having forgiven a loan
of $75,000 from the company due to MCOM having exercised 300,000
options. With respect to an additional loan from the Company to MCOM in
the amount of $15,500 due to MCOM having exercised 62,000 options,
$15,000 of such loan shall be deemed forgiven in view of MCOM having
paid to Mr. Xxxxx Xxxxxx $15,000 for a residence in San Diego from July
to November.1f monthly fee cannot be paid in cash, said amount shall be
paid in shares of common stock in the company. The price of said shares
shall be calculated based on the average price of the stock for the
thirty-day period before the date of calculation.
b. As compensation for any funds raised by the Company through any
vehicle that MCOM participates in, the Company shall pay to MCOM a five
percent (5%) cash fee and a five percent (5%) fee payable in a warrant
to purchase the Company's common stock at the price (per share) of the
offering, such warrant agreement to include piggyback registration
rights and cashless exercise provisions. This provision shall remain in
force until March 31, 2002, at which time the parties shall discuss.
c. An option agreement to purchase 500,000 shares of the company's
common stock at $0.10 per share. Such option agreement shall be issued
from the Company's plan of 1997.
d. A 10% cash payment for any licensing fees and/or monthly account
fees and/or credit card transaction fees brought to the Company by
MCOM.
e. With respect to any major licensing agreement brought to the Company
by MCOM (MCOM is presently working on potential agreements with Xx. Xx,
Conax and VectorMax), MCOM shall receive a five-year warrant agreement
for 250,000 at $1.00, such warrant agreement to include piggyback
registration rights and cashless exercise provisions.
f. Reimbursement of expenses -- MCOM will be reimbursed for all its
reasonable expenses, including authorized travel expenses incurred on
behalf of the Company in this matter. MCOM will seek prior approval for
any single expenditure in excess of $500.
6. Confidentiality. MCOM will not disclose to any other person, firm,
corporation, nor use for its own benefit during or after the term of this
Agreement, any trade secrets or other information designated as confidential by
the Company which is acquired by MCOM in the course of its performing services
hereunder. (A trade secret is information not generally known to the trade,
which gives the Company an advantage over its competitors. Trade secrets can
include, by way of example, products or services under development, production
methods and processes, sources of supply, customer lists, marketing plans and
information concerning the filing or pendency of patent applications.) Any
financial advice rendered by MCOM pursuant to this Consulting Agreement may not
be disclosed publicly in any manner without the prior written approval of MCOM.
7. Indemnification. The Company agrees to indemnify and hold MCOM harmless from
and against all claims, damages, liabilities, costs or expenses, including
reasonable attorney fees (collectively the "Liabilities") joint and several,
arising out of the performance of this Consulting Agreement, whether or not MCOM
is a party to such dispute. This indemnity shall not apply however, and MCOM
shall indemnify and hold the Company, its affiliates, control persons, officers,
employees and agents harmless from and against all Liabilities, where under
arbitration a final determination that MCOM engaged in gross recklessness and
willful misconduct in the performance of its services hereunder which gave rise
to the losses, claim, damage, liability cost expense sought to be recovered
hereunder (but pending any such final determination, the indemnification and
reimbursement provision of this Consulting Agreement shall apply and the Company
shall perform its obligations hereunder to reimburse MCOM for its expenses.) The
provisions of this paragraph shall survive the termination and expiration of
this Agreement.
8. Dilution. Regarding the aforementioned issuance of shares of common stock and
warrants, if at any time the Company shall (1) declare a dividend or make a
distribution on the Common Stock payable in shares of its capital stock (whether
shares of Common Stock or of capital stock of any other class); (ii) subdivide,
reclassify or recapitalize its outstanding Common Stock into a greater number of
shares; (iii) combine, reclassify or recapitalize its outstanding Common Stock
into a smaller number of shares, or (iv) issue any shares of its capital stock
by reclassification of its Common Stock (including any such reclassification in
connection with a consolidation or a merger in which the Company is the
continuing corporation), the amount of Common Stock issued to MCOM or its
designees at the time of the record date of such dividend, distribution,
subdivision, combination, reclassification or recapitalization shall be adjusted
so that MCOM or its designees shall be entitled to receive the aggregate number
and kind of shares which it would have owned and been entitled to receive by
virtue of such dividend, distribution, subdivision, combination,
reclassification or recapitalization. Any adjustment required by this paragraph
shall be made immediately after the record date, in the case of a dividend or
distribution, or the effective date, in the case of a subdivision, combination,
reclassification or recapitalization.
We enclose two (2) original Agreements. If this Agreement is in accordance with
your understanding, please confirm by signing and returning to MCOM Management
Corp. one (1) original, retaining the other for your files.
AGREED TO BY MCOM MANAGEMENT CORP.:
Mr. Michael C.O. Morfit
President
AGREED TO BY XXXXXXXX.XXX CORP.
Xxx X. Xxxxxx
