EXHIBIT 10.5
ADVISORY AND CONSULTING AGREEMENT
THIS ADVISORY AND CONSULTING AGREEMENT ("Agreement") is made this 14th day of
November 2000, by and between ▇▇▇▇▇▇▇▇ ▇. Small, an individual (referred to
herein as "Advisor") and NetCommerce Inc., a Nevada corporation (the
"Company").
WHEREAS, Advisor has experience in investor and shareholder relations and
evaluating and effecting financing for public and privately-held companies; and
WHEREAS, the Company desires to retain Advisor to advise and assist the
Company in investor relations and financing the Company's activities, on the
terms and conditions set forth below.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Company and Advisor
agree as follows:
1. Engagement
The Company hereby retains Advisor to act as director of investor
relations and financial advisor to the Company in connection with Investor
Relations and any proposed financing (the "Financing") of the Company. As
part of the Investor Relations and Financing, Advisor will assist the
Company and its professional advisors in the preparation of documentation,
offering circular(s), explanatory or disclosure statement(s), consent
solicitation and investor relations (collectively "Services") pursuant to
any and all arrangements made through Advisor. The Financing and Services
are to be provided on a "best efforts" basis.
In the course of providing the Services, Advisor will (a) become familiar
with, to the extent the Company deems appropriate, information to be
provided by the Company to enable Advisor to analyze the business,
operations, properties, financial condition, prospects and projects of the
Company; (b) assist and advise the Company in developing a general
strategy for accomplishing the Financing; (c) assist and advise the Company
with regards to potential Financing of the transaction; and, (d) render
such other financial advisory services including but not limited to
investor and shareholder relations as may from time to time be mutually
agreed upon by the Company and Advisor.
2. Information on the Company
In connection with Advisor's activities hereunder, the Company will furnish
Advisor with all material and information regarding the business and
financial condition of the Company (all such information so furnished being
referred to herein as the "Information"). The Company recognizes and
acknowledges that Advisor (a) will use and rely solely on the
Information, and on information available from generally recognized public
sources, in performing the Services contemplated by this Agreement without
having independently verified the same; (b) does not assume responsibility
for the accuracy or completeness of the Information; (c) will not make an
appraisal of any assets or liabilities of the Company; and (d) retains the
right to continue to conduct due diligence during the term of this
Agreement.
3. Use of Advice
Except as required by a court having jurisdiction over the Company, no
statements made or advice rendered by Advisor in connection with the
Services performed by the Advisor pursuant to this Agreement will be quoted
by, nor will any such statements or advice be referred to, in any report,
document, release or other communication, whether written or oral,
prepared, issued or transmitted by the Company or any person or corporation
controlling, controlled by or under common control with, the Company or any
director, officer, employee, agent or representative of any such person,
without the prior written authorization of Advisor, which may be given or
withheld in his sole discretion, except that the Company may disclose or
refer to such advice or statements without being required to obtain consent
to the extent required by law (in which case the appropriate party shall so
advise Advisor in writing prior to such use and shall consult with Advisor
with respect to the form and timing of disclosure), provided that the
foregoing shall not prohibit appropriate internal communication or
reference with respect to such advice internally within such parties and
provided further that the Company shall be permitted to use the
information, after appropriate review by Advisor, to support its efforts to
effect the Services and Financing.
4. Term
Unless terminated earlier pursuant to paragraph 10 below, this Agreement
shall have an initial term of one (1) year (the "Primary Term"). At the
conclusion of the Primary Term this Agreement will automatically be
extended on an annual basis (the "Extension Period") unless Advisor or the
Company shall serve written notice on the other party terminating the
Agreement. Any notice to terminate given hereunder shall be in writing and
shall be delivered at least thirty (30) days prior to the end of the
Primary Term or any subsequent Extension Period.
5. Time and Effort of Advisor
Advisor shall allocate time as it deems necessary to provide the Services.
The particular amount of time may vary from day to day or week to week.
Except as otherwise agreed, Advisor's monthly statement identifying, in
general, tasks performed for the Company shall be conclusive evidence that
the Services have been performed. Additionally, in the absence of willful
misfeasance, bad faith, negligence or reckless disregard for the
obligations or duties hereunder by Advisor, Advisor shall not be liable to
the Company or any of its shareholders for any act or omission in the
course of or connected with rendering the Services, including but not
limited to losses that may be sustained in any corporate act involved in
respect to any Financing undertaken by the Company as a result of
introductions or advice provided by Advisor.
6. Compensation
The Company agrees to pay Advisor a fee (the "Advisory Fee") for the
services provided by Advisor pursuant to this Agreement, as follows:
A. As to the Financing and Services to be rendered, the Company shall pay
Advisor an Advisory Fee of One Million Six Hundred Thousand
(1,600,000) shares of common stock of the Company to be registered and
issued, upon execution of this Agreement.
7. Place of Services
The Services provided by Advisor hereunder will be performed at Advisor's
offices except as otherwise mutually agreed by Advisor and the Company.
8. Independent Contractor
Advisor will act as an independent contractor in the performance of his
duties under this Agreement. Accordingly, Advisor will be responsible for
payment of all federal, state, and local taxes on compensation paid under
this Agreement, including income and social security taxes, unemployment
insurance, and any other taxes due, and any and all business license fees
as may be required. This Agreement neither expressly nor impliedly
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creates a relationship of principal and agent, or employee and employer,
between Advisor and the Company. Advisor is not authorized to enter into
any agreements on behalf of the Company. The Company expressly retains the
right to approve, in its sole discretion, the Services and each Financing
opportunity introduced by Advisor, and to make all final decisions with
respect to the Services to be rendered and effecting a transaction on any
Financing.
9. No Agency Express or Implied
This Agreement neither expressly nor impliedly creates a relationship of
principal and agent between the Company and Advisor, or employee and
employer as between Advisor and the Company.
10. Termination
The Company and Advisor may terminate this Agreement prior to the
expiration of the Primary Term upon thirty (30) days written notice with
mutual written consent. Failing to have mutual consent, without prejudice
to any other remedy to which the terminating party may be entitled, if
any, either party may terminate this Agreement with thirty (30) days
written notice under the following conditions:
A. By the Company.
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(i) In the event Advisor has not been provided by November 30, 2000
the documentation necessary to allow the Company to effect the
Financing, acceptable to the Company; or,
(ii) If during the Primary Term of this Agreement or any Extension
Period, Advisor is unable to provide the services as set forth
herein for thirty (30) consecutive business days because of
illness, accident, or other incapacity; or,
(iii) If Advisor willfully breaches or neglects the duties required
to be performed hereunder.
B. By Advisor.
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(i) If the Company breaches this Agreement or fails to make any
payments or provide information required hereunder; or,
(ii) Other than in the Financing, if the Company ceases business, or
sells a controlling interest to a third party, or agrees to a
consolidation or merger of itself with or into another
corporation, or enters into such a transaction outside of the
scope of this Agreement, or sells substantially all of its assets
to another corporation, entity or individual outside of the scope
of this Agreement; or,
(iii) If the Company has a receiver appointed for its business or
assets, or otherwise becomes insolvent or unable to timely
satisfy its obligations in the ordinary course of business,
including but not limited to the obligation to pay the Advisory
Fee; or,
(iv) If the Company institutes, makes a general assignment for the
benefit of creditors, has instituted against it any bankruptcy
proceeding for reorganization for rearrangement of its financial
affairs, files a petition in a court of bankruptcy, or is
adjudicated bankrupt; or,
(v) If any of the disclosures made herein or subsequent hereto by the
Company to Advisor are determined to be materially false or
misleading.
In the event Advisor elects to terminate without cause or this Agreement is
terminated prior to the expiration of the Primary Term or any Extension
Period by mutual written agreement, or by the Company for the reasons set
forth in A(i) and (ii) above, the Company shall only be responsible to pay
Advisor the Advisory Fee accrued up to and including the effective date of
termination. If this Agreement is terminated by the Company for any other
reason, or by Advisor for reasons set forth in B(i) through (v) above,
Advisor shall be entitled to any outstanding unpaid portion of any unpaid
Advisory Fee for the remainder of the unexpired portion of the applicable
term (Primary Term or Extension Period) of the Agreement.
11. Remedies
Advisor and the Company acknowledge that in the event of a breach of this
Agreement by either party, money damages would be inadequate and the non-
breaching party would have no adequate remedy at law. Accordingly, in the
event of any controversy concerning the rights or obligations under this
Agreement, such rights or obligations shall be enforceable in a court of
equity by a decree of specific performance. Such remedy, however, shall be
cumulative and non-exclusive and shall be in addition to any other remedy
to which the parties may be entitled.
12. Miscellaneous
A. Subsequent Events. Advisor and the Company each agree to notify the
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other party if, subsequent to the date of this Agreement, either party
incurs obligations which could compromise its efforts and obligations
under this Agreement.
B. Amendment. This Agreement may be amended or modified at any time and
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in any manner only by an instrument in writing executed by the parties
hereto.
C. Further Actions and Assurances. At any time and from time to time,
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each party agrees, at its or their expense, to take actions and to
execute and deliver documents as may be reasonably necessary to
effectuate the purposes of this Agreement.
D. Waiver. Any failure of any party to this Agreement to comply with any
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of its obligations, agreements, or conditions hereunder may be waived
in writing by the party to whom such compliance is owed. The failure
of any party to this Agreement to enforce at any time any of the
provisions of this Agreement shall in no way be construed to be a
waiver of any such provision or a waiver of the right of such party
thereafter to enforce each and every such provision. No waiver of any
breach of or non-compliance with this Agreement shall be held to be a
waiver of any other or subsequent breach or non-compliance.
E. Assignment. Neither this Agreement nor any right created by it shall
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be assignable by either party without the prior written consent of the
other.
F. Notices. Any notice or other communication required or permitted by
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this Agreement must be in writing and shall be deemed to be properly
given when delivered in person to an officer of the other party, when
deposited in the United States mails for transmittal by certified or
registered mail, postage prepaid, or when deposited with a public
telegraph company for transmittal, or when sent by facsimile
transmission charges prepared, provided that the communication is
addressed:
(i) In the case of the Company:
NetCommerce Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile:
(ii) In the case of Advisor:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇, ext. 723
Telefax: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other person or address designated in writing by the
Company or Advisors to receive notice.
G. Headings. The section and subsection headings in this Agreement are
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inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement.
H. Governing Law. This Agreement was negotiated and is being contracted
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for in the United States, State of California, and shall be governed
by the laws of the State of California, and United States of America,
notwithstanding any conflict-of-law provision to the contrary.
I. Binding Effect. This Agreement shall be binding upon the parties
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hereto and inure to the benefit of the parties, their respective
heirs, administrators, executors, successors, and assigns.
J. Entire Agreement. This Agreement contains the entire agreement
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between the parties hereto and supersedes any and all prior
agreements, arrangements, or understandings between the parties
relating to the subject matter of this Agreement. No oral
understandings, statements, promises, or inducements contrary to the
terms of this Agreement exist. No representations, warranties,
covenants, or conditions, express or implied, other than as set forth
herein, have been made by any party.
K. Severability. If any part of this Agreement is deemed to be
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unenforceable the balance of the Agreement shall remain in full force
and effect.
L. Counterparts. A facsimile, telecopy, or other reproduction of this
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Agreement may be executed simultaneously in two or more counterparts,
each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument, by one or more parties
hereto and such executed copy may be delivered by facsimile of similar
instantaneous electronic transmission device pursuant to which the
signature of or on behalf of such party can be seen. In this event,
such execution and delivery shall be considered valid, binding and
effective for all purposes. At the request of any party
hereto, all parties agree to execute an original of this Agreement as
well as any facsimile, telecopy or other reproduction hereof.
M. Time is of the Essence. Time is of the essence of this Agreement and
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of each and every provision hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date above written.
"Advisor"
By:
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
The "Company"
NetCommerce Inc.
By:
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President