CONSULTING AGREEMENT
PEABODYS COFFEE, INC. a Nevada corporation ("Peabodys" or the "Company"),
and XXXXX XXXXX, an individual ("Consultant"), effective as of November 1, 1999,
agree as follows:
1. BACKGROUND AND PURPOSE. Peabodys is in business of selling specialty coffee
drinks and related products at kiosks and other retail locations (the
"Business"). Consultant has substantial experience management of food service
companies and other companies. Peabodys desires to engage Consultant, and
Consultant desires to assist Peabodys, on the terms set forth herein.
2. ENGAGEMENT. Peabodys retains Consultant to provide to Peabodys consulting
services as more fully described herein ("Consulting Services"), and Consultant
accepts such engagement.
3. INDEPENDENT CONSULTANT. The parties agree that Consultant shall perform all
services required hereunder as an independent contractor, and not as an
employee, agent, joint venturer or partner of Peabodys for any purpose
whatsoever. Peabodys shall have no right to, and shall not, control the manner
or prescribe the method by which the Consulting Services are performed by
Consultant hereunder. Consultant shall be entirely and solely responsible for
his acts while engaged in the performance of the Consulting Services hereunder.
The employees and agents of each party shall not be considered employees or
agents of the other for any purpose. Consultant is not authorized to bind
Peabodys except as expressly authorized in writing by Peabodys.
4. CONSULTING SERVICES PROVIDED. Consultant shall use Consultant's best efforts
to provide the Consulting Services to the reasonable satisfaction of, and at all
times reasonably requested by, Peabodys. The Consulting Services shall consist
of assisting Peabodys in: (i) development of management infrastructure,
operating systems and controls; (ii) business development and expansion
activities such as establishing strategic relationships and identifying
potential targets for acquisition; and (iii) business valuation services.
Consultant shall perform the Consulting Services in a safe and professional
manner, in compliance with all laws, statutes, rules and regulations of all
federal, state and local entities.
5. TERM AND TERMINATION. The initial term of this Agreement shall be for one (1)
year. Following the initial term, the Agreement shall automatically renew for
one (1) year terms unless terminated by the parties as set forth herein.
Following the initial term, either party may terminate this Agreement: (i) at
any time upon thirty (30) days written notice to the other party; or (ii)
immediately following a material breach which remains uncured following ten (10)
days written notice.
6. COMPENSATION. As consideration for the performance of the Consulting
Services, Peabodys shall grant to Consultant a nonstatutory stock option (the
"Option") for the purchase of Seventy Five Thousand (75,000) shares of Peabodys'
common stock (the "Shares") on the following terms:
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(a) VESTING SCHEDULE: Fully vested;
(b) EXERCISE PRICE: Fifty cents ($0.50) per share;
(c) TERM: The Option shall expire after one (1) year;
(d) METHOD OF EXERCISE: Consultant shall notify the Company in writing of
the election to exercise the Option, and the number of Shares in
respect of which the Option is being exercised; and
(e) METHOD OF PAYMENT. Payment of the Exercise Price shall be by any of
the following, or a combination thereof, at the election of the
Optionee: (i) cash, or (ii) debt forgiveness.
7. INVESTOR ACKNOWLEDGEMENTS AND REPRESENTATIONS. In connection with the grant
of the Option and the issuance of the Shares, Consultant acknowledges and
represents as follows:
(a) GENERAL SECURITIES RISK. The Option and Shares are "securities" under
federal and state securities laws, and these securities involve a high degree of
risk and should not be held by anyone who cannot afford the risk of loss of his
or her entire investment.
(b) REVIEW BY FEDERAL OR STATE AGENCY. No federal or state agency has made
any finding or determination as to the fairness of the offering of the Option
and the Shares for investment, or any recommendation or endorsement of the
Option and the Shares. Specifically, these securities have not been approved or
disapproved by the Securities & Exchange Commission ("SEC"), the California
Department of Corporations ("DOC"), or any other state or federal agency.
(c) NO FEDERAL REGISTRATION. The offer and sale of the Option and the
Shares have not been registered under the Securities Act of 1933, as amended
(the "Securities Act"). The Company may, but is under no obligation to, register
the Shares on a Form S-8 Registration Statement filed with the SEC. In lieu of
the foregoing registration, the Company may offer the Option and the Shares in
reliance upon the exemption from registration provided by Rule 506 of Regulation
D promulgated under Section 4(2) of the Securities Act (17 CFR ss. 230.506).
(d) NO STATE QUALIFICATION OR REGISTRATION. The offer and sale of the
Option and the Shares have not been qualified with the Commissioner of
Corporations of the State of California, or registered or qualified with any
other state agency. The Company may offer the Option and the Shares in reliance
on the exemption from qualification set forth in Section 25102.1 of the
California Corporate Securities Law of 1968 for "covered securities" as that
term is defined in Section 18 of the Securities Act, or in reliance on any other
available exemption.
(e) FOREIGN SECURITIES LAWS. The Company makes no representation with
regard to the securities laws and other laws of any country other than the
United States.
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(f) TAX CONSEQUENCES. The tax consequences to Consultant of investing in
the Shares or holding or exercising the Option will depend on Consultant's
particular circumstances and neither Peabodys nor its officers, directors,
agents, employees, affiliates or consultants will be responsible to Consultant
for the tax consequences of such investment or exercise. CONSULTANT WILL LOOK
SOLELY TO, AND RELY UPON, CONSULTANT'S OWN ADVISOR WITH RESPECT TO THE TAX
CONSEQUENCES OF THIS INVESTMENT.
(g) NO WARRANTIES REGARDING PERFORMANCE. At no time have any of the
following been guaranteed or warranted to Consultant by the Company, or any of
its officers, directors, agents or employees, or any other person, expressly or
by implication:
(i) the approximate or exact length of time that Consultant will be
required, by market conditions or otherwise, to remain the owner of the Option
and the Shares;
(ii) the amount of profit and/or amount of any type of consideration,
profit or loss, if any, to be realized as a result of this investment; or
(iii) the future successful operation of the Company.
(h) NO WARRANTIES REGARDING BENEFIT TO INVESTORS. No representations or
warranties of any kind are intended to be made in this Agreement nor should any
be inferred from the information and statements contained herein with respect to
the economic return or benefits which may accrue to investors. No assurance is
given that existing tax, securities, or other laws will not be changed or
interpreted adversely. Consultant is not to construe the contents of this
Agreement or any prior, concurrent or subsequent communication from Peabodys,
its officers, directors, agents or employees, or any professional associated
with this offering as legal, tax or investment advice. CONSULTANT SHALL CONSULT
WITH HIS OWN COUNSEL, ACCOUNTANT AND OTHER ADVISORS AS TO THE LEGAL, TAX AND
RELATED MATTERS CONCERNING THE INVESTMENTS DESCRIBED HEREIN.
(i) ARBITRARY OFFERING PRICE. The offering price of the Option and the
Shares has been determined arbitrarily by the Company and does not necessarily
bear any relationship to the assets, book value or any other recognized criteria
of value or the prospective value of the Company's assets. No assurance is or
can be given that the Option and the Shares could be sold for the offering price
or for any amount.
(j) INVESTMENT INTENT. Consultant is acquiring the Option and the Shares
for Consultant's own account, solely for investment and not with a view to
resale or distribution;
(k) FINANCIAL EXPERIENCE. By reason of Consultant's business or financial
experience, or the business or financial experience of Consultant's professional
advisor who is not affiliated with or compensated by Peabodys, Consultant has
the capacity to evaluate adequately the merits and risks of, and protect its own
interests in connection with, this investment;
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(l) SUBSTANTIAL RISK. Consultant recognizes that an investment in Peabodys'
stock involves substantial risks, including a risk of total loss of Consultant's
investment. Consultant can afford to bear the economic risks of this investment
for an indefinite period and has no need for liquidity in this investment.
Consultant has adequate means of providing for Consultant's current needs and
contingencies if this investment results in a total loss;
(m) FURNISHED INFORMATION. Consultant is acquiring the Option and the
Shares without having been furnished an offering memorandum or prospectus. In a
recently completed sale of common stock to a principal of Consultant, that
person received a Peabodys' Form 10-SB, which Peabodys recently filed with the
Securities and Exchange Commission. Consultant and its principals have had
access to, and have carefully read and understand, all the provisions of this
Agreement and the Form 10-SB. Consultant has had access to all such other
information about Peabodys and the Common Stock as Consultant has deemed
necessary or desirable to reach an informed and knowledgeable investment
decision;
(n) AVAILABILITY OF INFORMATION. Peabodys has made available to Consultant
all documents that have been requested relating to an investment in the Option
and the Shares, and has provided answers to all of Consultant's questions
concerning the securities. In evaluating the suitability of an investment in the
Option and the Shares, Consultant has not relied upon any representations or
other information (whether oral or written) other than as contained in any
documents or answers to questions furnished by Peabodys, or gained through
Consultant's due diligence described in subpart (m);
(o) FURTHER ASSURANCES. Within five (5) days after receipt of a written
request from Peabodys, Consultant shall provide such information and shall
execute and deliver such documents as reasonably may be necessary to comply with
any and all laws, regulations and ordinances to which Peabodys is subject; and
(p) ACCURACY, CONFIDENTIALITY OF INFORMATION. All of the information
provided to Peabodys or its agents and all representations made herein are
complete, true and correct as of the date hereof. Consultant understands that
Consultant's answers will be confidential but authorizes Peabodys or its agents
to disclose the information contained herein to appropriate regulatory agencies
if called upon to establish the availability of an exemption from registration
under the Act or qualification under state securities laws or for other
purposes.
8. EXPENSES. Consultant shall be solely responsible for all expenses incurred in
providing the Consulting Services. Peabodys shall not be obligated to reimburse
Consultant for any such expenses.
9. INDEMNIFICATION. Consultant shall defend, indemnify and hold harmless
Peabodys and Peabodys' officers, directors, agents and employees, from and
against any and all claims, demands, losses, expenses, obligations, liabilities,
damages or causes of action, including reasonable attorneys' fees and costs, of
any nature arising directly or indirectly from: (i) the alleged existence of any
agency relationship between Consultant and Peabodys based upon the acts or
omissions of Consultant; (ii) the violation by Consultant of any federal, state
or local law, including any attorneys' fees which Peabodys may incur as a result
of any such claim, demand or cause of action; and/or (iii) damages to any third
parties or to Peabodys or its
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agents and employees caused by any action or inaction of Consultant in
connection with the performance of the Consulting Services. Peabodys shall
notify Consultant of the existence of any claim, demand, or other matter to
which Consultant's indemnification obligations would apply no later than thirty
(30) days from the date Consultant becomes aware of such claim, demand or other
matter, specifying in writing the facts relating to such claim, demand or other
matter, and shall give Consultant a reasonable opportunity to defend the same at
Consultant's own expense and with counsel of Consultant's selection; PROVIDED
that Peabodys shall at all times also have the right, but not the obligation, to
fully participate in the defense at Peabodys' own expense. If Consultant shall,
within a reasonable time after this notice, fail to defend, Peabodys shall have
the right, but not the obligation, to undertake the defense of, and compromise
or settle (exercising reasonable business judgment) the claim or other matter on
behalf, for the account and at the risk, of Consultant. Without limiting the
foregoing, Consultant specifically agrees to indemnify and hold harmless
Peabodys from any and all legal expenses reasonably incurred by Peabodys in
enforcing its rights under this Section 9.
10. MISCELLANEOUS.
10.1. ENTIRE AGREEMENT. This Agreement contains the entire agreement among
the parties and supersedes all prior and contemporaneous oral and written
agreements, understandings and representations among the parties. No amendments
to this Agreement shall be binding unless executed in writing by the party
against whom enforcement of such modification is sought.
10.2. NONASSIGNABILITY. Consultant may not assign its obligations hereunder
without the prior written consent of Peabodys.
10.3. SEVERABILITY. If any provision of this Agreement is held by a court
of competent jurisdiction to be invalid, void, or unenforceable, the remaining
provisions shall nevertheless continue in full force and effect without being
impaired or invalidated in any way.
10.4. ATTORNEYS' FEES; PREJUDGMENT INTEREST. If the services of an attorney
are required by any party to secure the performance of this Agreement or
otherwise upon the breach or default of another party to this Agreement, or if
any judicial remedy or arbitration is necessary to enforce or interpret any
provision of this Agreement or the rights and duties of any person in relation
thereto, the prevailing party shall be entitled to reasonable attorneys' fees,
costs and other expenses, in addition to any other relief to which such party
may be entitled. Any award of damages following judicial remedy or arbitration
as a result of the breach of this Agreement or any of its provisions shall
include an award of prejudgment interest from the date of the breach at the
maximum amount of interest allowed by law.
10.5. WAIVER. Any of the terms or conditions of this Agreement may be
waived at any time by the party entitled to the benefit thereof, but no such
waiver shall affect or impair the right of the waiving party to require
observance, performance or satisfaction either of that term or condition as it
applies on a subsequent occasion or of any other term or condition.
10.6. NOTICE. Any notice under this Agreement shall be in writing, and any
written notice or other document shall be deemed to have been duly given (i) on
the date of personal service on the parties, (ii) on the third business day
after mailing, if the document is mailed by
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registered or certified mail, (iii) one day after being sent by professional or
overnight courier or messenger service guaranteeing one-day delivery, with
receipt confirmed by the courier, or (iv) on the date of transmission if sent by
telegram, telex, telecopy or other means of electronic transmission resulting in
written copies, with receipt confirmed. Any such notice shall be delivered or
addressed to the parties at the addresses set forth below or at the most recent
address specified by the addressee through written notice under this provision.
10.4. GOVERNING LAW. The rights and obligations of the parties and the
interpretation and performance of this Agreement shall be governed by the laws
of the State of California, excluding its conflict of laws rules, and the laws
of the United States.
10.5. VENUE. Each party consents to the jurisdiction of, and any actions
arising under this Agreement shall be heard and resolved in, the courts of the
State of California.
10.6. COUNTERPARTS. This Lease may be executed in any number of
counterparts with the same effect as if the parties had all signed the same
document. All counterparts shall be construed together and shall constitute one
agreement.
10.7. AMENDMENT. The provisions of this Agreement may be modified at any
time by written agreement of the parties.
PEABODYS COFFEE, INC.,
A Nevada corporation
By:_________________________________
Xxxx Xxxxxxx, President
Address: 0000 Xxxxxxxx Xxxx., Xxxxx 0
Xxxxxxx, XX 00000
CONSULTANT:
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XXXXX XXXXX
Address:
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