CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT ("Agreement") is entered into this 31st day
of January, 1997, by and between EDnet, Inc. (the "Company"), and NET Financial
International, Ltd. with an office in Zollikon, Switzerland ("Consultant").
RECITALS
A. Consultant, through the expenditure of considerable money, time and
effort, has created and developed, and is continuing to improve, an efficient
system for providing financial services (the "Services") to public companies.
B. The Company desires to obtain the assistance of Consultant, and
Consultant is willing to provide such assistance, with respect to the Services.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, the sufficiency of which is hereby acknowledged by each of the
parties, the Company and Consultant hereby agree as follows:
1. Appointment as Consultant: Scope of Services. The Company hereby
engages Consultant as a consultant in connection with the Services. Consultant
hereby agrees to perform such services upon the terms and conditions hereinafter
set forth.
2. Term. This Agreement shall be effective for a period of three (3)
months commencing as of the date of this Agreement. Thereafter, this Agreement
will remain in effect until terminated by either party upon ten (10) days
written notice.
3. Services of Consultant.
(a) Consultant agrees that during the term of this Agreement,
unless this Agreement is sooner terminated pursuant to its terms, Consultant
shall perform the Services, including more specifically those services related
to the formation of capital. The Company specifically desires the Consultant to
assist it in raising approximately $5,000,000 on a phased basis. During phase
one (1) the Consultant will assist the Company by providing its Services in
relation to a Regulation S offering of Convertible Preferred Stock in the amount
of $1,750,000. Phase one (1) is to be completed by February 7, 1997. The parties
agree that the work performed by Consultant will be governed by the general
terms and conditions of this Agreement which will be controlling.
4. Compensation. As compensation for Consultant's services as a
consultant pursuant hereto, the Company agrees to:
(a) Pay fees to the Consultant equal to 10% of the total
amount of capital raised; and
1.
(b) Grant to Consultant as an additional consulting fee the
right to purchase from the Company fully paid, duly authorized and nonassessable
shares of Common Stock equal in face value to 6% of the capital raised pursuant
to the terms of a Warrant Agreement. These Warrants are exercisable for two
years at 100% of the closing bid price on the day of closing of the financing
with the Company. The Warrant Agreement shall provide for Piggyback Registration
Rights with the next available registration filed by the Company subsequent to
any financings following the execution of this agreement.
5. Expenses. Consultant shall be responsible for any and all of its
expenses incurred in connection with the performance of the Services.
6. Relationship of the Parties. Consultant under this Agreement is and
shall act as an independent contractor, and not as an agent, servant, or
employee of the Company. Nothing in this Agreement shall be construed to imply
that the Consultant or its agents or employees are officers or employees of the
Company. Consultant hereby acknowledges and agrees that it shall have no
authority to enter into any contract or agreement or to bind the Company except
as specifically provided herein and that in connection with the performance of
the Services it shall have no authority to make any representations of any kind
with respect to or on behalf of the Company. It is understood that independent
contractor status is a condition required by the Consultant to its agreement to
perform the Services specified to be performed by the Consultant under this
Agreement.
7. Personal Services. Consultant shall be personally responsible for
the performance of the Services described herein, and shall be responsible for
any persons employed by Consultant to assist consultant in the performance of
such Services.
8. Non-Exclusive Services/Right of First Refusal. During the term of
this Agreement, Consultant may perform and may permit any of its employees,
principals, or affiliates to perform consulting services similar to the Services
provided for herein in its sole and absolute discretion. In the event Company
seeks additional financing during the twelve (12) month period following the
signing of this agreement, Company must give Consultant the right of refusal to
obtain the additional financing for Company. If Consultant accepts the right to
obtain such financing for the Company, Consultant shall be given a period of 15
business days, from the date Consultant receives an approved form of
Subscription Agreement and up to date financials from the Company, in which to
obtain said financing for the Company on a best efforts basis. The fees for such
services will be the same as those described in paragraphs 4(a) and 4(b) above.
9. Non-Disclosure Covenant. Consultant covenants and agrees that it
will not, at any time during the term of this Agreement, or at any time
thereafter, communicate or disclose to any person, or use for its own account or
for the account of any other person, without the prior written consent of the
Company, any confidential knowledge or information concerning any patents,
inventions, know-how, processes or equipment used in, or any trade secret or
confidential information concerning the business and affairs of the Company or
any of its affiliates acquired by Consultant during the term of this Agreement.
The same shall not be used
2.
by Consultant in any way other than in performance of its services under this
Agreement and shall be returned to the Company promptly at the termination of
the work performed pursuant to this Agreement by Consultant. Consultant will not
deliver, reproduce, or in any way allow such information or documents to be
delivered by it or any person or entity outside the Company without duly
authorized specific direction or consent of the Company. Consultant further
covenants and agrees that, during the term of this Agreement and thereafter, it
will retain all such confidential knowledge and information concerning the
foregoing, in trust, for the sole benefit of the Company and its affiliates and
their respective successors and assigns. Consultant shall ensure the compliance
of all of its employees and agents with the provisions of this covenant. This
Section 9 shall survive the termination of this Agreement.
10. Obligations of the Company. The Company hereby agrees to facilitate
the performance of the Services by the Consultant and to provide Consultant with
access to all information and personnel reasonably requested by Consultant
relating to the Services.
11. Indemnification.
(a) Consultant agrees to indemnify and to save and hold
harmless the Company, its agents and employees from and against any and all
claims, losses, liabilities, damages, costs, and expenses, including without
limitation attorneys fees, to which the Company may be subject under any
applicable act, rule, regulation, statute or at common law or otherwise, and
will reimburse the Company and such other persons for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending actions, whether or not resulting in any liability, insofar as such
losses, claims, damages, liabilities, or expenses arise out of or are based on
any (i) breach of inaccuracy of any representation, warranty, or covenant of
Consultant contained herein; or (ii) misrepresentation or fraud made as a result
of or in connection with Consultant's performance of the Services hereunder.
(b) Promptly after receipt by Consultant under Subsections
11(a) or 11(b) hereof of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under any such Subsections, notify the indemnifying party in
writing of the commencement of such action. Any failure to so notify the
indemnifying party shall relieve the indemnifying party of liability.
12. Indemnification.
(a) Company agrees to indemnify and to save and hold harmless
Consultant, its agents and employees from and against any and all claims,
losses, liabilities, damages, costs, and expenses, including without limitation
attorneys fees, to which the Consultant may be subject under any applicable act,
rule, regulation, statute or at common law or otherwise, and will reimburse the
Consultant and such other persons for any legal or other expenses reasonably
incurred by them in connection with investigation or defending actions, whether
or not resulting in any liability, insofar as such losses, claims, damages,
liabilities, or expenses arise out of or are based on any (i) breach or
inaccuracy of any representation, warranty, or covenant of the Company contained
herein; or (ii) any misrepresentations or any untrue statements of a material
3.
fact contained in any offering materials or the omission therefrom of a material
fact required to be stated therein or necessary to make the statement therein
not misleading.
(b) Promptly after receipt by Consultant under Subsections
12(a) or 12(b) hereof of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under any such Subsections, notify the indemnifying party in
writing of the commencement of such action. Any failure to so notify the
indemnifying party shall relieve the indemnifying party of liability.
13. Intellectual Property. Consultant acknowledges that the Company's
trademarks, trade names and emblems are the property of the Company and that it
is expressly understood that no licensed use of intellectual property is granted
herein to Consultant. It is further understood that any use of Consultant of any
such intellectual property shall be in the name of the Company. Upon termination
of this agreement, Consultant shall immediately and permanently discontinue and
cease and desist from engaging in any activity which would tend to indicate that
Consultant is affiliated with anyone who is authorized to utilize the
intellectual property.
14. Representations and Warranties of Consultant. Consultant hereby
represents and warrants as of the date hereof each of the following:
(a) Consultant has the requisite power and authority to enter
into this agreement and to carry out its obligations hereunder. The execution
and delivery of this agreement by Consultant and the consummation by Consultant
of the transactions contemplated hereby have been duly authorized by Consultant,
and no other action on the part of Consultant is necessary to authorize this
agreement in such transactions. This agreement has been duly executed and
delivered by Consultant and constitutes a valid and binding obligation of
Consultant, enforceable in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization
or other similar laws relating to the enforcement of creditors' rights generally
by general principles of equity.
15. Representations and Warranties of the Company. The Company hereby
represents and warrants as of the date hereof each of the following:
(a) The Company is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Colorado, with all
requisite corporate power and authority to carry on its business now conducted
and to own and operate the assets and properties now owned and operated by it.
The Company is duly qualified to do business and is in good standing in Colorado
and in each jurisdiction in which it is required to be qualified and in which
the failure to be so qualified could have a material adverse effect on the
business of operations of the Company.
(b) The Company has the requisite corporate power and
authority to enter into this Agreement and to carry out its obligations
hereunder. The execution and delivery of this agreement by the Company and the
consummation by the Company of the transactions
4.
contemplated hereby have been duly authorized by the Company, and no other
corporate proceedings on the part of the Company are necessary to authorize this
agreement in such transactions. This agreement has been duly executed and
delivered by the Company and constitutes a valid and binding obligation of the
Company, enforceable in accordance with its terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization or other
similar laws relating to the enforcement of creditors' rights generally by
general principles of equity.
16. Notices. Any notice of communication to be given under the terms of
this Agreement shall be in writing and delivered in person or deposited,
certified or registered, in the United States mail, postage prepaid, addressed
as follows:
If to Consultant: Xx. Xxxxxx Xxxxxxxx, President
NET Financial International, Ltd.
c/o Akar Verwaltungs, AG
Xxxxxxxxxx 00 X.X. Xxx 00
XX-0000 Xxxxxxxx 0
Xxxxxxxxxxx
(x) 011 41 1 3962700
(f) 011 41 1 3962705
If to Company: Xxx Xxxxxxxxx, CEO
EDnet, Inc.
Xxx Xxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
(p) 415-274-8800
(f) 000-000-0000
17. Severability. In the event that any provision in this Agreement is
held to be invalid, void or illegal by any court of competent jurisdiction, then
the court making such determination may reduce the obligations so as to be
enforceable according to applicable law and enforce such obligations as reduced.
The remaining provisions of this agreement shall be enforced according to their
terms.
18. Modifications And Amendments. This Agreement shall not be altered
or amended, except by writing signed by all the parties hereto, or such parties'
authorized agents.
19. Entire Agreement. This agreement constitutes and embodies the full
and complete understanding and agreement of the parties hereto with respect to
the subject matter hereof and supersedes all prior understandings or agreements
whether oral or in writing.
20. Governing Law. This agreement shall be governed by and construed in
accordance with the laws of the State of Connecticut, without regard to the
conflict of laws principles thereof.
5.
21. Headings. The paragraph headings used herein are for convenience
and reference only and are not intended to define, limit or describe the scope
or intent of any provision of this Agreement.
22. No Waiver By Failure To Act. Neither any failure nor any delay on
the part of either party hereto in exercising any right hereunder shall operate
as a waiver thereof; nor shall any single or partial exercise of any right
hereunder preclude any other or further any exercise thereof or the exercise of
any other right.
23. Assignment. This agreement shall inure to the benefit of, and shall
be binding upon, the successors and assigns of the parties hereto; provided,
however, that Consultant shall not assign any right herein or delegate any
duties without the prior written consent of the Company.
24. No Partnership; Third Person. It is not intended by this Agreement
to, and nothing contained in this Agreement shall, create any partnership, joint
venture or other arrangement between Consultant and the Company. No term or
provision of this Agreement is intended to, or shall, be for the benefit of any
person, firm, corporation or other entity not a party hereto and no such party
shall have any right or cause of action hereunder.
25. Arbitration. The parties shall resolve any dispute arising
hereunder before a panel of three arbitrators selected pursuant to and run in
accordance with the rules of the American Arbitration Association. The
arbitration shall be held in Stamford, Connecticut. Each party shall bear their
own attorney's fees and costs of such arbitration. Disputes under this Agreement
as well as of the terms and conditions of this Agreement shall be governed in
accordance with and by the laws of the State of Connecticut (without regard to
its conflicts of law principles).
26. For the purposes of this Agreement, the term "Company" includes any
entity which acquires, by merger or otherwise, all of the Company's assets, and
the successors or assigns of the Company.
6.
IN WITNESS WHEREOF, this Consulting Agreement has been executed as of the day
and year first written above.
EDNET, INC.
By: /s/ Xxx Xxxxxxxxx
--------------------------
Xxx Xxxxxxxxx
Its: CEO, duly authorized
NET FINANCIAL INTERNATIONAL, LTD.
By: /s/ Xxxxxx Xxxxxxxx
--------------------------
Xxxxxx Xxxxxxxx
Its: President, duly authorized
7.
SCHEDULE A
I. The parties recognize that certain responsibilities and obligations are
imposed by both U.S. and foreign securities laws as well as by the applicable
rules and regulations of the NASD, in-house "due diligence" or "compliance"
departments of brokerage houses, etc. Accordingly Consultant agrees to the
following limitations on services:
1. Consultant shall NOT release any financial or other information or
data about the Company without the consent and approval of the Company.
2. Consultant shall NOT conduct any meeting with financial analyst
without informing the Company in advance of the proposed meeting and the format
or agenda of such meeting and the Company may elect to have a representative of
the Company attend such meeting.
3. Consultant shall NOT release any information or data about the
Company to any selected or limited person(s), entity, or group if Consultant is
aware that such information or data has not been generally released or
promulgated.
4. Consultant shall not take any action or knowingly permit the Company
to take any actions, which would violate any foreign securities laws or rules
and regulations issued thereunder.
8.