CONSULTING AGREEMENT
This Consulting Agreement (the "AGREEMENT") is entered into as of this
29th day of September, 1997 by and between SMARTSERV ONLINE, INC., a corporation
organized under the laws of the State of Delaware with headquarters located at
One Station Place, Stamford, Connecticut 06902 (the "COMPANY"), and Mr. Bruno
Guazzoni (the "CONSULTANT").
W I T N E S S E T H:
WHEREAS, the Consultant has provided certain financial and investment
banking advisory services (the "SERVICES") to the Company in connection with the
sale by the Company, on even date herewith, of $4,000,000 of Prepaid Common
Stock Purchase Warrants (the "OFFERING") and desires to continue to provide such
Services to the Company, subject to the terms and conditions hereinafter set
forth; and
WHEREAS, the Company has determined that the Services of the Consultant
have been and will continue to be of value to the Company and desires to engage
the Consultant in accordance with the terms hereof.
NOW, THEREFORE, with the foregoing deemed incorporated herein, in
consideration of the foregoing premises and the mutual promises, covenants and
agreements herein contained, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and the
Consultant, intending to be legally bound hereby, agree as follows:
1. ENGAGEMENT. During the Term of this Agreement (as hereinafter
defined), the Company agrees to engage the Consultant to perform the Services
and the Consultant agrees to perform the Services for the Company, subject to
the terms and conditions hereinafter set forth. In connection with the
performance of the Consultant's duties hereunder, the Consultant agrees to
devote all necessary time, energy and skill to the provision of the Services and
to generally make available to the Company his expertise and knowledge at such
times as may be mutually agreed upon by the parties; PROVIDED, HOWEVER, that in
no event shall the Consultant be required to devote a specific number of hours
or days during the Term hereof to the provision of the Services hereunder and,
PROVIDED, FURTHER, that nothing contained herein shall prohibit the Consultant
from engaging in any other activities or from providing advisory services of a
nature similar to the Services hereunder to any other person or entity.
2. TERM. The term of this Agreement shall commence on the date
hereof and shall continue for a period of five (5) years (the "TERM").
3. COMPENSATION. For Services previously rendered in connection
with the Offering and for Services to be rendered hereunder, the Company agrees
to issue and deliver to the Consultant as of the date hereof a warrant (the
"WARRANT"), in the form attached hereto as EXHIBIT A, to acquire 3,555,555
shares of the Company's common stock, par value $.01 per share (the "COMMON
STOCK"), on the terms and subject to the conditions set forth therein. The
Warrant shall be immediately exercisable and shall not be subject to vesting or
forfeiture. The Company agrees to provide the Consultant with certain
registration rights with respect to the shares of Common Stock issuable upon
exercise of or otherwise pursuant to the Warrant in accordance with the
provisions of that certain Registration Rights Agreement in the form attached
hereto as EXHIBIT B.
4. REIMBURSEMENT OF EXPENSES. The Consultant shall be reimbursed
for all reasonable and necessary expenses incurred by him in the performance of
his duties under this Agreement upon presentation to the Company of appropriate
vouchers or other documentation.
5. TERMINATION. This Agreement shall terminate automatically upon
the expiration of its Term. No termination of this Agreement shall affect
Consultant's rights with respect to the Warrant and the shares of Common Stock
issuable upon exercise thereof.
6. INDEPENDENT CONTRACTOR STATUS. The relationship of the
Consultant to the Company shall be that of an independent contractor, and not
that of an agent or employee of the Company. The Consultant agrees that he shall
be solely responsible for paying any and all federal, state and local income
taxes, as well as any Social Security tax, which may become due and payable as a
result of the compensation to be received by the Consultant from the Company for
performing the Services hereunder. No federal, state or local income taxes, or
any other payroll tax of any kind, shall be withheld or paid by the Company on
behalf of the Consultant. The Consultant agrees to indemnify and hold harmless
the Company and its affiliates from any loss, liability, damage or expense which
it or they may suffer or incur by reason of the Consultant's failure to pay any
taxes which may become payable as a result of the compensation to be received by
the Consultant from the Company for performing the Services hereunder.
7. INDEMNIFICATION. The Company shall indemnify the Consultant and
shall save and hold the Consultant harmless from and against any and all
damages, losses, obligations, deficiencies, costs and expenses, including,
without limitation, reasonable attorneys' fees and other costs and expenses,
incurred by the Consultant in connection with any proceeding to which the
Consultant is a party by reason of his engagement with the Company pursuant
hereto and/or the performance of his duties hereunder to the extent and in a
manner consistent with the Company's policies for the indemnification of its
officers and directors.
8. COMPANY PROPERTY. During the Term of this Agreement and
thereafter, all materials, know-how, inventions, trade secrets, data and other
proprietary information of any kind furnished by the Company to the Consultant
are and shall remain the sole and confidential property of the Company. In the
event that the Company requests the return of such materials at any time during
the Term of this Agreement or following its termination, the Consultant shall
immediately deliver
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such material to the Company.
9. CONFIDENTIALITY. All disclosures of trade secrets, inventions,
know-how, financial information or other confidential or proprietary information
made by the Company to the Consultant shall be received and maintained in
confidence by the Consultant during the Term of this Agreement and thereafter
and the Consultant shall treat all such trade secrets, inventions, know-how,
financial information or other confidential or proprietary information as
confidential except (a) as to the persons directly responsible for the effective
operation of the Company; (b) as to the professional advisers of the Company;
(c) as to such disclosures to customers of the Company as are necessary for the
effective carrying on of business by the Company; (d) as to such information as
is required by law to be disclosed by the Consultant or by the Company; and (e)
as to such information as is or may fall within the public domain.
10. EQUITABLE RELIEF. The Consultant recognizes that the remedy at
law for any breach or threatened breach by him of his covenants and agreements
set forth in Sections 8 and 9 hereof would be inadequate and that any such
breach or threatened breach would cause such immediate and permanent damage as
would be irreparable and the exact amount of which would be impossible to
ascertain. Accordingly, the Consultant agrees that in the event of any breach or
threatened breach of any such covenant or agreement, in addition to any other
legal and equitable remedies which may be available to the Company, the Company
may specifically enforce the covenants and restrictions pertaining to his
obligations set forth in Sections 8 and 9 hereof and may obtain temporary and/or
permanent injunctive relief without the necessity of proving actual damage by
reason of such breach or threatened breach thereof and, to the extent
permissible under the applicable statutes and rules of procedure, a temporary
injunction may be granted immediately upon the commencement of any such suit and
without notice. The covenants and restrictions pertaining to the Consultant's
obligations set forth in Sections 8 and 9 hereof shall survive the expiration or
sooner termination of this Agreement in accordance with the terms hereof and
shall remain in full force and effect.
11. ENTIRE AGREEMENT. This Agreement, the Warrant and the
Registration Rights Agreement constitute the entire understanding between the
parties with respect to the subject matter contained herein and supersede any
prior understandings and agreements between them respecting such subject matter.
12. HEADINGS. The headings describing the provisions of this
Agreement are for convenience of reference only and shall not affect its
interpretation.
13. SEVERABILITY. If any provision of this Agreement is held
illegal, invalid or unenforceable, such illegality, invalidity, or
unenforceability shall not affect any other provision hereof. Such provision and
the remainder of this Agreement shall, in such circumstances, be modified to the
extent necessary to render enforceable the remaining provisions hereof.
14. NOTICES. All notices shall be in writing and shall be deemed to
have been given if presented personally, sent by recognized national overnight
courier, or sent by certified or registered
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mail, postage prepaid, return receipt requested, to the following addressees:
If to the Company:
SmartServ Online, Inc.
One Station Place
Stamford, CT 06902
Telecopy: (203) 353-5962
Attention: Chairman
With a copy to:
Parkin Chapin Flattau & Klimpl, LLP
1211 Avenue of the Americas
New York, NY 10036
Telecopy: (212) 704-6288
Attention: Michael J. Shef, Esquire
If to the Consultant, to such
address as the Consultant shall
provide to the Company pursuant to
the provisions hereof.
Notice of any change in such addresses shall also be given in the manner set
forth above. Whenever the giving of notice is required, the giving of such
notice may be waived by the party entitled to receive such notice.
15. COUNTERPARTS. This Agreement may be executed in counterparts,
all of which taken together shall constitute one and the same instrument.
16. WAIVER. The failure of either party to insist upon strict
performance of any of the terms or conditions of this Agreement shall not
constitute a waiver of any of its rights hereunder.
17. SUCCESSORS AND ASSIGNS. This Agreement binds, inures to the
benefit of, and is enforceable by the Consultant and his heirs and personal
representatives, and the Company and its successors and permitted assigns, and
does not confer any rights on any other persons or entities.
18. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of Delaware.
19. AMENDMENTS. This Agreement may be amended and supplemented only
by a written instrument duly executed by both parties.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
SMARTSERV ONLINE, INC.
By:_________________________
Name:
Title:
____________________________
Bruno Guazzoni
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