EXHIBIT 4.2
CONSULTING AGREEMENT
--------------------
This CONSULTING AGREEMENT ("Agreement") made and entered into as of the
1st day of March, by Moderngroove Entertainment, Inc. ("the Corporation"),
and Xxxxxxx Xxxxxx ("the Consultant").
1. Appointment of Consultant.
------------------------------
The Corporation appoints the Consultant and the Consultant accepts
appointment on the terms and conditions provided in this Agreement as a
consultant to the Corporation's business, including any other corporations
hereafter formed or acquired by the Corporation to engage in any business.
2. Board of Directors Supervision.
-----------------------------------
The activities of the Consultant to be performed under this Agreement shall
be subject to the supervision of the Board of Directors of the Corporation
("the Board") to the extent required by applicable law or regulation and by
the Board and in effect from time to time. Where not required by applicable
law or regulation, the Consultant shall not require the prior approval of
the Board to perform its duties under this Agreement. The Board has
approved this agreement.
3. Authority of Consultant.
Subject to any limitations imposed by applicable law regulation, the
Consultant shall render management and consulting services to the
Corporation, which services shall include advise and assistance concerning
any and all aspects of the operations and planning of the Corporation as
needed from time to time. These services shall include but not limited to
conducting relations on behalf of the Corporation with accountants,
attorneys. The Consultant will also make reports to the effects to cause
its employees and agents to give the Corporation the benefit of their special
knowledge, skill and business expertise to the extent relevant to the
Corporation's business and affairs. The Consultant shall make introductions
to companies who are possible strategic partners, and assist the Corporation
in developing strategic relationships with these companies. The Consultant
shall find, interview and assist the Corporation in hiring executives as the
need for such executives arise. In addition, the Consultant shall render
advise and expertise in connection with any acquisitions or dispositions
taken by the Corporation and shall from time to time bring to the attention
of the Corporation acquisition opportunities as the Consultant deems
appropriate in its sole discretion.
1
4. Reimbursement of Expenses; Independent Contractor.
------------------------------------------------------
All obligations or expenses reasonably incurred by the Consultant in the
performance of its duties under this Agreement, which are performed with
the prior written or oral approval of the Corporation shall be for the
account of, on behalf of, and at the expense of the Corporation. Provided
that no such written or oral approval shall be required for reimbursement
of any individual expense that is less than $100. The Consultant shall not
be obligated to make any advance to or for the account of the Corporation
without assurance that the necessary funds are held in accounts maintained
by the Corporation; nor shall the Consultant be obligated to incur any
liability or obligation for the account of the Corporation without
assurance that the necessary funds for the discharge of such liability or
obligation will be provided. The Corporation shall reimburse each such
expense within 15 days of submission by the Consultant to the Corporation
of a properly documented expense report. The Consultant shall be an
independent contractor, and nothing contained in this Agreement shall be
deemed or construed (I) to create a partnership or joint venture between
the Corporation and the Consultant; or (ii) to cause the Consultant to be
responsible in any way for the debts, liabilities or obligations of the
Corporation or any other party; or (iii) to constitute the Consultant or
any of its employees and employees, officers or agents of the Corporation.
The Consultant shall not hold itself out or permit itself to be regarded
(to the extent practical) as an employee, officer or agent of the
Corporation and shall strictly avoid any act or omission that may
reasonably lead to a contractual or tortuous claim against or liability
to the Corporation.
5. Other Activities of Consultant; Investment Opportunities.
-------------------------------------------------------------
The Corporation acknowledges and agrees that neither the Consultant nor
any of the Consultant's employees, officers, directors, affiliates or
associates shall be required to devote full time business efforts to the
duties of the Consultant specified in this Agreement, but instead shall
devote only so much of such time and efforts as the Consultant reasonably
deems necessary to fulfill its obligations under this Agreement. The
Corporation further acknowledges and agrees that the Consultant and its
affiliates are engaged in the account and for the account of unaffiliated
parties, and understands that the Consultant plans to continue to be engaged
in such businesses (and other business or investment be deemed to be engaged
in for the benefit of the Corporation or any of its subsidiaries or to
constitute a conflict of interest. Furthermore, notwithstanding anything
herein to the contrary, the Consultant shall be required to bring only such
investments and/or business opportunities to the attention of the
Corporation as the Consultant, in the sole discretion, deems appropriate.
2
6. Compensation of Consultant.
-------------------------------
In consideration of Consultant's agreement to provide the management
services described herein, the Corporation will transfer authorized and
issued shares of common stock of the Corporation within 60 days of start
date of contract to the following individuals in the following amounts:
A: Xxxxxxx Xxxxxx 200,000 shares
7. Term.
---------
This Agreement shall commence as of the date hereof and shall remain in
effect through March 1, 2002.
8. Termination upon breach.
----------------------------
Either the Corporation or the Consultant may terminate this Agreement in
the event of the breach of any of the material terms or provisions of this
Agreement by the other party, which breach is not cured within 10 business
days after notice of the same is given to the party alleged to be in breach
by the other party.
9. Standard of Care.
---------------------
The Consultant (including any person or entity acting for or on behalf of
the Consultant) shall not be liable for any damages suffered by the
Corporation which are caused by any mistake of fact, errors of judgment,
or by any acts or omissions of any kind of the Consultant, unless caused by
the intention misconduct, recklessness or gross negligence of the
Consultant.
10. Confidentiality.
---------------------
All information, knowledge and data relating to or concerned with the
operations, business and affairs of the Consultant or the Corporation
which are exchanged by the parties hereto in connection with the
performance by the Consultant of its duties hereunder shall be the property
of the Corporation. The information, knowledge and data shall be treated
as confidential information and shall be held in a fiduciary capacity by
the parties hereunder. Neither the Consultant nor the Corporation shall
disclose or divulge such information to any firm, person, corporation, or
other entity other than required by law or in connection with the
performance of its duties hereunder.
3
11. Non-Competition.
---------------------
During the "Restricted Period" (as hereinafter defined), the Consultant
agrees not to (and shall cause each of its employees and affiliates not to)
directly or indirectly, alone or as a partner, officer, director, employee,
consultant, agent, independent contractor, member or stockholder of an
company or person, engage in (or have a pecuniary, financial or beneficial
interest in) the business of the Corporation. The Consultant further agrees
that, during the Restricted Period, the Consultant shall not in any
capacity, either separately, jointly or in association with others, directly
or indirectly employed or retained by the Corporation (or who was employed
or retained at any time within the two (2) years prior to the date either
Consultant employs or seeks to employ such person); and (b) solicit, induce,
or influence any proprietor, partner, stockholder, lender, director,
officer, employee, joint venture, investor, consultant, agent, lesser,
supplier, customer or any other person which has a business relationship
with the Corporation or any subsidiary, at any time during the Restricted
Period, to discontinue or reduce or modify the extent of such relationship
with the Corporation. The Restricted Period shall mean one year after
the date of termination of this Agreement.
12. Indemnification of Consultant.
-----------------------------------
The Corporation hereby agrees to indemnify and hold harmless the
Consultant and its present and future officers, directors, affiliates,
employees, and agents, ("Indemnified Parties") to the fullest extent
permitted by law for actions of the Corporation set forth in Schedule B.
The Corporation further agrees to reimburse the Indemnified Parties on a
monthly basis for any cost of defending any action investigation
(including attorney's fees and expenses) subject to an undertaking from
such Indemnified Party to repay the Corporation if such party is
determined not to be entitled to such indemnity.
13. Assignment.
----------------
Without the consent of the Consultant, the Corporation shall not assign,
transfer or convey any of its rights, duties or interest under this
Agreement; nor shall it delegate any of the obligations or duties required
to be kept or performed by it hereunder. The Consultant shall not assign,
transfer or convey any of its rights, duties or interests kept or performed
by it under this Agreement, except that the Consultant may transfer its
rights and obligations hereunder to one of its affiliates, or to an assignee
who utilizes the services of employees of the Consultant.
4
14. Notices.
-------------
All notices, demands, consents, approvals and requests given by either
party to the other hereunder shall be in writing and shall be personally
delivered or sent by registered or certified mail, return receipt requested,
postage prepaid, to the parties at the following address:
If to the Corporation:
Moderngroove Entertainment Inc.
0000 Xxxx 0xx Xxx.
Xxxxxxxxx, XX Xxxxxx X0X0X0
If to the Consultant:
Xxxxxxx Xxxxxx
000 Xxxxxx Xxxx
Xxxxxxxx, XX 00000
Any party may at any time change its respective address by sending written
notice to the other party of the change in the manner hereinabove
prescribed.
15 Severability.
-----------------
If any term or provision of this Agreement or the application thereof to
any person or circumstance shall, to any extent, be invalid or unenforceable,
the remainder of this Agreement, or the application of such term or
provision to persons or circumstances other than those as to which it is
held invalid or enforceable, shall be valid and be enforced to the fullest
extent permitted by law.
16. Entire Agreement.
----------------------
This Agreement contains the entire agreement between the parties hereto
with respect to the matters herein contained and any change or modification
must be in writing and signed by the party against whom enforcement of the
change or modification is sought.
17. Governing Laws.
--------------------
This Agreement shall be governed by and constructed in accordance with the
laws of the State of Florida. The sole venue for any action relative to
this agreement shall be in the State or Federal Courts of Palm Beach County,
Florida.
5
IN WITNESS WHEREOF, if the parties hereto have caused this Consulting
Agreement to be duly executed by their authorized representatives as of
the date first above written.
Modergroove Entertainment, Inc.
By: /s/ Xxxx Xxxxxxx By: /s/ Xxxxxxx Xxxxxx
-------------------- -----------------------
Xxxx Xxxxxxx Xxxxxxx Xxxxxx
President/CEO Consultant
6
