Exhibit 10.3
BUSINESS ADVISORY AGREEMENT - ACCI and Xxxxx Xxxxx
This Business Advisory Agreement ("Agreement") dated this 30th day of November,
2001, is entered into by and between Xxxxx Xxxxx ("Advisor"), an individual
residing in the state of Ohio, and American Career Centers, Inc. ("Company" or
"ACCI"), a Nevada corporation. Advisor and Company may each be referred to as
a "Party" and together Advisor and Company may be referred to as the "Parties".
WHEREAS, Company desires to obtain strategic planning services to evaluate its
business status and possible new directions for Company and its future
development;
WHEREAS, Company wishes to engage Advisor to complete a thorough evaluation of
Company's business practices and business development programs and provide
recommendations about various courses of action;
WHEREAS, Company wishes to engage Advisor to perform a complete review of its
current business procedures and make recommendations; and
WHEREAS, after reviewing Company's business goals with management, Advisor is
sufficiently confident that management's objectives can be achieved;
NOW THEREFORE, in consideration of the promises and covenants contained herein,
the Parties hereto agree as follows:
1. Responsibilities of Advisor. Advisor agrees to become a management
consultant to Company with respect to the evaluation of the current business
development programs and growth strategies, and make recommendations as to
possible ways to focus the assets and management resources to achieve long-term
growth. Advisor will complete an analysis of Company's current operation and
management structures. Advisor will work with management to evaluate all
strategic plans and evaluate the current capabilities of Company in view of its
organization and resources. In addition, Advisor will continue in the role of
business development for Company. It is understood that this program of
business development may involve the Company in possible business combination
or joint venture transactions. None of the services to be provided by Advisor
under this Agreement shall be in connection with the offer and sale of
securities of ACCI in a capital raising transaction, nor shall such services
directly or indirectly promote or maintain a market for any of ACCI's
securities. Advisor shall provide Company with his opinion and recommendations
with respect to the most appropriate means of meeting corporate goals; however,
the implementation of such recommendations shall be at the sole and exclusive
option of Company.
2. Analysis and Review. Advisor agrees to provide the following services,
and such other advisory services as may be appropriate and required to assist
in Company's efforts to meet the corporate goals:
A. Conduct summary due diligence and analysis of Company's
operation and structures to ascertain the feasibility of the Program
("Recommendation"). Such analysis shall include a critical evaluation
of the information and documents delivered to Advisor by Company prior
to implementation of any revision of a focused business development
program, and
B. Provide Company with a formal recommendation for implementation
of the changes.
3. Program Implementation. Upon receipt of formal approval and written
authorization from Company to proceed with the Program, Advisor shall:
A. Advise Company with respect to a plan to find business partners;
B. Provide an analysis of possible strategic alliances;
C. Provide a program for expansion of the company marketing programs;
D. Create system for evaluating possible alliance candidates; and
E. Assist Company wherever possible with the implementation of each of
the above-enumerated steps.
4. Responsibilities of Company. In connection with the above activities,
which will be undertaken by Advisor on Company's behalf, Company shall fully
cooperate with the Advisor in the fulfillment of its duties hereunder, and
Company and Advisor agree to the following:
A. Relationship. Advisor is an independent contractor of Company
and will act as an advisor to Company in accordance with this
Agreement. Advisor acknowledges and agrees that it is his
responsibility to provide all employment taxes, insurance premiums and
local, state and federal taxes related to this Agreement. Neither FICA
(Social Security), FUTA (Federal Unemployment), nor local, state or
federal income taxes will be withheld from payments to Advisor.
B. Access to Information. Furnish all non-privileged information
and data concerning Company, any transactions or prior transactions
which Advisor may request.
C. Access to Company Officers and Professionals. Company will provide
Advisor complete access to Company's officers, directors, employees,
accountants, counsel and other key persons.
5. Term. The term of this Agreement shall be for a period of four months,
commencing on the date first set forth above.
6. Truthful Representations. Company represents and warrants that all
information (a) made available to the Advisor, or (b) contained in any
materials prepared by Company will, at all times during this engagement be
true, accurate and complete in all material respects and will not contain any
untrue statement of a material fact or omit to state therein any fact necessary
to make the statements therein not misleading in light of the circumstances
under which they are made. Company further represents that any projections
provided to Advisor or contained in any materials prepared by or on behalf of
Company with respect to the subject matter thereof will have been prepared in
good faith and will be based on assumptions which in light of the circumstances
under which they are made are in Company's determination, reasonable.
7. Responsibility for Representations. Company acknowledges and agrees
that in rendering its services as agreed hereunder, Advisor will be using and
relying on the information (and information available from public sources and
other sources deemed to be reliable) without independent verification thereof
and without independent appraisal of any of Company's assets. Advisor does not
assume responsibility for the accuracy or completeness of the information. Any
advice rendered by Advisor pursuant to this Agreement may not be disclosed
publicly without Company's prior written consent.
8. Indemnification of Advisor. If in connection with the services or
matters that are the subject of this Agreement Advisor becomes involved in any
capacity in any action or legal proceeding, due to the actions, information,
position, assertions, and/or affirmations put forth by Company or by Advisor at
the direction of Company, or in reliance upon material or information furnished
by Company, Company agrees to indemnify and hold harmless Advisor as the case
may be for the reasonable legal fees of counsel, court costs and other expenses
(including the costs of investigation and preparation) incurred. Company also
agrees to hold harmless Advisor against any losses, claims, damages or
liabilities, joint services or matters which are the subject of this Agreement;
provided however that Company shall not be liable to Advisor with respect to
any loss, claim, damages or liability to the extent and only to the extent that
such loss, claim, damage or liability resulted from the gross negligence or
willful misconduct of Advisor. The provisions of this paragraph shall survive
the expiration of the period of this Agreement including any extensions thereof
set forth herein.
9. Implementation of Program. In the event that Company provides Program
Authorization to Advisor, Company agrees, subject to its resources, to:
A. Allocate the services of its Chief Executive Officer, Chief
Financial Officer and engage such other outside professionals as
required to successfully implement and complete each task associated
with the Program, pursuant to Advisor's recommendation, unless modified
in writing by the mutual consent of the parties, and
B. Issue such compensation as may be suggested by Advisor so as to
cause timely implementation of the Program pursuant to Advisor's
recommendation, unless modified in writing by the mutual consent of the
parties.
10. Compensation. In consideration for the services which are to be
provided by Advisor under this Agreement, Company agrees to compensate Advisor
as follows:
A. Analysis and Review Services. Company will pay to Advisor for
services rendered for the period August 1, 2001 through November 30,
2001 at the rate of $4,000 per month due and payable on November 1,
2001, along with the non-refundable engagement fee of $17,333.00, due
on September 15, 2001 for a total of $24,000 all past due and all
payable upon the execution of this Agreement.
B. Stock in Lieu of Cash Compensation. Advisor will be paid in
restricted Common Stock of ACCI. The ratio that will govern the amount
of stock considered equal to an amount of cash fee will be 1.20:1
($1.20 in stock will be considered equal to $1.00 in cash). To
determine the exact number of shares to be awarded in lieu of cash, the
"Stock Equivalent" shall be divided by the closing bid price of the
shares as quoted on the OTC:BB as of November 27, 2001, which is $.05
per share. Utilizing the calculation described above, 800,000 shares
of restricted ACCI common stock, par value $ .001 per share, will be
issued to satisfy the compensation due under this Agreement. All
shares will be issued according to all state and federal rules and
regulations. Company shall use all reasonable and best efforts to
prepare and file a Form S-8 Registration Statement covering the
registration of the above-referenced shares within 10 days in of the
date of the execution of this Agreement. Company will bear the full
expense of the Form S-8 Registration filing.
11. Expenses. Upon demand, but no more than monthly, Company shall
reimburse Advisor for all of his reasonable out of pocket expenses incurred in
connection with the performance of his services pursuant to this Agreement.
Such expenses shall include, but not be limited to travel, lodging, research,
entertainment, printing, postage and similar charges. Advisor agrees that he
shall obtain authorization from Company prior to incurring any expense in
excess of Five Hundred Dollars ($500.00).
12. Confidentiality. Except to the extent necessary to perform its
obligations hereunder or to comply with any applicable law, regulation or rule,
neither Party shall disclose or divulge to any third party other than the other
Party's directors, officers, auditor or legal advisors, either before or after
the termination of this Agreement, any document or information exchanged
between the Parties during the term of this Agreement without prior written
consent of the other Party, which consent shall not unreasonably withheld.
13. Use of Advice and Recommendations. Neither the Recommendations or any
advice, whether oral or in writing, and no other material prepared for Company
in connection with Advisor's services hereunder is to be used for any purpose
other than the purpose for which such report, advice or material was prepared,
or is to be used or referred to by Company in any public documents or otherwise
publicly referred to without Advisor's written consent. Notwithstanding the
foregoing, in the event that Company receives a request to disclose all or any
part of the information contained in any such report, advice or material under
the terms of a valid and effective subpoena or order issued by a court of
competent jurisdiction, Company may disclose such information provided that
Company notifies Advisor of the existence, terms and circumstances surrounding
such request.
14. Non-Circumvention. Company hereby irrevocably agrees not to circumvent,
avoid or bypass Advisor, either directly or indirectly. Company will not
directly use or approach Advisor's associates, contacts or introductions in
order to avoid payments of fees to Advisor, or otherwise benefit, either
financially or otherwise, from information supplied to it or individuals and or
business entities introduced to it by Advisor with regard to any business
opportunity, business combination or joint venture under discussion. The spirit
of mutual trust and confidence shall be the underlying principle of this
undertaking, and the Parties agree to adhere thereto.
15. Termination by Advisor. It is hereby agreed and understood that Advisor
shall have the right to interview Company and accomplish a due diligence review
with respect to Company's representations and that at Advisor's sole discretion
if such interviews and due diligence demonstrate substantive and/or material
discrepancies from that which was put forth by the Company then Advisor shall
have the right to terminate this Agreement and be held harmless from any claims
of Company for such termination as well as from any claims of third parties
which may result from any such discrepancy. In the event that Advisor is
unable to perform its responsibilities under this Agreement due to the failure
of Company to perform its responsibilities hereunder, Advisor shall be released
from its responsibilities under this Agreement and shall receive any
compensation due and owing pursuant to Paragraph 10 above.
16. Termination by Company. Notwithstanding Paragraph 5, Company may
terminate this Agreement at any time, without cause, upon thirty (30) days'
written notice to Advisor. In the event that Company terminates Advisor without
cause prior to the expiration of the term set forth in Paragraph 5, Advisor
shall be entitled to all compensation set forth in Paragraph 10. In the event
that at time of such termination Company shall be in discussions with respect
to any persons or entities introduced by Advisor, Advisor will maintain the
exclusive right to conclude any transactions between Company and such persons
or entities. In case of termination, regardless of when or by whom such
termination may have been brought about, Advisor will receive full
reimbursement for the entire amount of expenses incurred by Advisor in
connection with his services pursuant to Paragraph 11 of this Agreement.
Neither termination nor completion shall affect the provisions of Paragraphs 6,
7, 8, 11, 12, 13 or 14, which shall remain operative and in full force and
effect for a period of two years subsequent to termination.
17. Securities Laws. The Parties to this Agreement mutually agree to comply
with any and all applicable securities laws with respect to their performance
under this Agreement.
18. Miscellaneous Provisions.
A. Notices. All notices, requests, demands and other
communications to be given hereunder shall be in writing and shall be
deemed to have been duly given on the date of personal service or
transmission by fax if such transmission is received during the normal
business hours of the addressee, or on the first business day after
sending the same by overnight courier service or by telegram, or on the
third business day after mailing the same by first class mail, or on
the day of receipt if sent by certified or registered mail, addressed
as set forth below, or at such other address as any party may hereafter
indicate by notice delivered as set forth herein. Notice shall be
given to Advisor as follows: 0000 Xxxx Xxxxxx, Xxxxxxxxxx, Xxxx, 00000.
Notice shall be given to Company as follows: American Career Centers,
Inc. 00000 Xxxxx 00xx Xxxxxx, Xxx Xxxx, XX 00000.
B. Binding Agreement; Assignment. This Agreement shall constitute
the binding agreement of the Parties hereto, enforceable against each
of them in accordance with its terms. This Agreement shall inure to
the benefit of each of the Parties hereto, and their respective
successors and permitted assigns.
C. Entire Agreement. This Agreement constitutes the entire and
final agreement and understanding between the Parties with respect to
the subject matter hereof and the transactions contemplated hereby.
D. Waiver. No waiver of any provision of this Agreement shall be
deemed to be or shall constitute a waiver of any other provision,
whether or not similar, nor shall any waiver constitute a continuing
waiver. No waiver shall be binding unless executed in writing by the
Party making the waiver.
E. Headings. The headings provided herein are for convenience
only and shall have no force or effect upon the construction or
interpretation of any provision hereof.
F. Counterparts. This Agreement may be executed 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.
G. Further Documents and Acts. Each party agrees to execute such
other and further documents and to perform such other and further acts
as may be reasonably necessary to carry out the purposes and provisions
of this Agreement.
H. Governing Law & Venue. This Agreement shall be governed by and
construed in accordance with the laws of the State of California,
without giving effect to the principles of conflicts of laws applied
thereby. The parties hereby agree that any disputes arising hereunder
shall be brought before any court of competent jurisdiction sitting in
the city of Las Vegas, and hereby consent to jurisdiction and venue in
the State of Nevada.
I. Advice, Drafting. Each party further agrees and acknowledges
that this Agreement represents the respective understandings of such
parties as negotiated between them, and no ambiguity or other aspect of
this Agreement shall be construed against any party solely by virtue of
the drafting or presentment of this Agreement. Each party has been
advised to speak with a legal and an accounting professional to
understand the legal and tax implications and impact of the
transactions contemplated hereby, and neither party has relied upon the
other, the Company or their respective counsel in connection therewith.
J. Severability. The provisions of this Agreement are severable,
and if any one or more provisions is determined to be illegal, invalid
or otherwise unenforceable, in whole or in part, by any court of
competent jurisdiction, then the remaining provisions of this Agreement
and any partially unenforceable provisions to the extent enforceable in
the pertinent jurisdiction, shall continue in full force and effect and
shall be binding and enforceable on the Parties.
K. Survival. The representations, warranties, general covenants
and indemnities contained in this Agreement shall survive the
termination of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
COMPANY:
AMERICAN CAREER CENTERS, INC.
By: /s/ Xxxxxx Xxxxx
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Xxxxxx Xxxxx
President & CEO
ADVISOR:
XXXXX XXXXX
By: /s/ Xxxxx Xxxxx
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Xxxxx Xxxxx
