Exhibit 10.12
THIS AGREEMENT is made effective as of the 10th day of August, 2000
BETWEEN:
E-COMMERCE GROUP, INC.
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3675 Pecos McLeod, Suite 1400
Las Vegas, Nevada
89121 - 3881
(hereinafter referred to as the "Company")
OF THE FIRST PART
AND:
S.C. MANAGEMENT LTD.
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Suite L, King's Court
Nassau, Bahamas
(hereinafter referred to as the "Contractor")
OF THE SECOND PART
WHEREAS the Company desires to retain the Contractor to assist the Company in
the areas of strategic development, and corporate consulting and the Contractor
has agreed to so assist the Company on the terms and conditions of this
Agreement.
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the
mutual covenants and promises set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged by
each, the parties hereto agree as follows:
ARTICLE 1
APPOINTMENT AND AUTHORITY OF CONTRACTOR
1.1 Appointment of Contractor
-------------------------
The Company hereby appoints the Contractor to perform certain services
for the benefit of the Company as hereinafter set forth, and the Company hereby
authorizes the Contractor to exercise such powers as provided under this
Agreement. The Contractor accepts such appointment on the terms and conditions
herein set forth.
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1.2 Authority of Contractor
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The Contractor shall have no right or authority, express or implied,
to commit or otherwise obligate the Company in any manner whatsoever except to
the extent specifically provided herein or specifically authorized in writing by
the Company.
1.3 Independent Contractor
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In performing its services hereunder, the Contractor shall be an
independent contractor and not an employee or agent of the Company, except that
the Contractor shall be the agent of the Company solely in circumstances where
the Contractor must be the agent to carry out its obligations as set forth in
this Agreement. Nothing in this Agreement shall be deemed to require the
Contractor to provide its services exclusively to the Company and the Contractor
hereby acknowledges that the Company is not required and shall not be required
to make any remittances and payments required of employers by statute on the
Contractor's behalf and the Contractor or any of its agents or employees shall
not be entitled to the fringe benefits provided by the Company to its employees.
1.4 Subcontracting
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In performing its services hereunder, the Contractor shall be at
liberty to subcontract or assign any of its obligations as set forth in this
Agreement to third party contractors or assignees, provided that the Contractor
shall remain responsible to the Company for such services performed.
ARTICLE 2
CONTRACTOR'S AGREEMENTS
2.1 General
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The services to be provided by the Contractor for the Company shall
include the following in relation to the Company's desire to expand its
business:
(a) assisting the Company in its strategic planning and development;
(b) providing the Company with advice in connection with the raising of
capital and the Company's affairs generally;
(c) identifying potential merger and acquisition targets for the Company
and assisting the Company in negotiating and consummating
acquisitions, for which a 5% finder's fee will be payable;
(d) implementing or causing to be implemented decisions of the Company in
accordance with and as limited by this Agreement;
(e) providing such other services as the Company may reasonably request;
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and in so assisting the Company, the Contractor shall at all times be subject to
the direction of the Company and shall keep the Company informed as to all
matters concerning the Contractor's activities.
2.2 Expense Statements
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The Contractor shall on or before the 15th day of each calendar month
during the term hereof, or if a Saturday, Sunday or holiday the next following
business day, render to the Company an itemized statement and accounting for the
previous calendar month, together with such supporting documents as and when the
Company may reasonably require, of all expenses which the Company is obligated
by this Agreement to reimburse.
The Contractor may incur expenses in the name of the Company up to an
amount per month as agreed in advance by the Company, such expenses to relate
solely to the carrying out of the Contractor's duties hereunder. The Contractor
will immediately forward all invoices for expenses incurred on behalf of and in
the name of the Company and the Company agrees to pay said invoices directly on
a timely basis.
ARTICLE 3
COMPANY'S AGREEMENTS
3.1 Compensation of Contractor
--------------------------
As compensation for the services rendered by the Contractor pursuant
to this Agreement, the Company shall issue to the Contractor, or as directed by
the Contractor, options to purchase 200,000 common shares in the capital of the
Company (the "Options") with the options to be issued and vest as follows:
(a) 100,000 Options to be issued on January 1, 2001, vesting immediately
thereafter, and exercisable at the price of US$2.00 per share from the
date of issuance; and
(b) 100,000 Options to be issued on January 1, 2002, vesting immediately
thereafter and exercisable at the price of US$2.50 per share from the
date of issuance.
3.2 Expiration of Options
---------------------
The Options shall expire five years from the date of issuance.
3.3 Indemnity by Company
--------------------
The Company hereby agrees to indemnify, defend and hold harmless the
Contractor from and against any and all claims, demands, losses, actions,
lawsuits and other proceedings, judgments and awards, and costs and expenses
(including reasonable legal fees), arising directly or indirectly, in whole or
in part, out of any matter related to any action taken by the Contractor within
the scope of its duties or authority hereunder, excluding only such of the
foregoing as arise from the fraudulent, gross negligence, reckless or wilful act
or omission of the Contractor, its officers, directors, agents or employees or
as arise in respect of the Contractor's
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office overhead or the Contractor's general administrative expenses, and the
provisions of this Section 3.3 shall survive termination of this Agreement.
ARTICLE 4
ACKNOWLEDGEMENTS OF THE CONTRACTOR
4.1 The Contractor acknowledges and agrees that:
(a) none of the Securities have been registered under the United States
Securities Act of 1933 (the "1933 Act"), or under any state securities
or "blue sky" laws of any state of the United States, and, unless so
registered, may not be offered or sold in the United States or,
directly or indirectly, to U.S. Persons, as that term is defined in
Regulation S under the 1933 Act ("Regulation S"), except in accordance
with the provisions of Regulation S, pursuant to an effective
registration statement under the 1933 Act, or pursuant to an exemption
from, or in a transaction not subject to, the registration
requirements of the 1933 Act;
(b) the Contractor acknowledges that the Company has undertaken, and is
obligated, to register the Securities under the 1933 Act pursuant to a
Registration Rights Agreement dated as of the above date between the
Company and the Contractor;
(c) the decision to execute this Agreement and subscribe for the
Securities agreed to be issued hereunder has not been based upon any
oral or written representation as to fact or otherwise made by or on
behalf of the Company and such decision is based entirely upon a
review of any public information which has been filed by the Company
with the SEC in compliance, or intended compliance, with applicable
securities legislation. If the Company has presented a business plan
to the Contractor, the Contractor acknowledges that the business plan
may not be achieved or be achievable;
(d) by execution hereof the Contractor has waived the need for the Company
to communicate its acceptance of the subscription for the Securities
pursuant to this Agreement;
(e) the Company is entitled to rely on the representations and warranties
and the statements and answers of the Contractor contained in this
Agreement, and the Contractor will hold harmless the Company from any
loss or damage it or they may suffer as a result of the Contractor's
failure to correctly complete this Agreement;
(f) it will indemnify and hold harmless the Company and, where applicable,
its respective directors, officers, employees, agents, advisors and
shareholders from and against any and all loss, liability, claim,
damage and expense whatsoever (including, but not limited to, any and
all fees, costs and expenses whatsoever reasonably incurred in
investigating, preparing or defending against any claim, lawsuit,
administrative proceeding or investigation whether commenced or
threatened) arising out of or based upon any representation or
warranty of the Contractor contained herein or in any document
furnished by the Contractor to the
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Company in connection herewith being untrue in any material respect or
any breach or failure by the Contractor to comply with any covenant or
agreement made by the Contractor to the Company in connection
therewith;
(g) it has been advised to consult its own legal, tax and other advisors
with respect to the merits and risks of an investment in the
Securities and with respect to applicable resale restrictions and it
is solely responsible (and the Company is not in any way responsible)
for compliance with applicable resale restrictions;
(h) none of the Securities are listed on any stock exchange or automated
dealer quotation system and no representation has been made to the
Contractor that any of the Securities will become listed on any stock
exchange or automated dealer quotation system, except the OTCBB in the
United States;
(i) it is outside the United States when receiving and executing this
Agreement and is acquiring the Securities as principal for its own
account, for investment purposes only, and not with a view to, or for,
resale, distribution or fractionalization thereof, in whole or in
part, and no other person has a direct or indirect beneficial interest
in such Securities;
(j) none of the Securities may be offered or sold to a U.S. Person or for
the account or benefit of a U.S. Person (other than a distributor)
prior to the end of the Restricted Period (as defined herein);
(k) neither the SEC nor any other securities commission or similar
regulatory authority has reviewed or passed on the merits of the
Securities;
(l) the issuance of the Securities to the Contractor will not be completed
if it would be unlawful or if, in the discretion of the Company acting
reasonably, it is not in the best interests of the Company;
(m) the statutory and regulatory basis for the exemption claimed for the
offer and sale of the Securities, although in technical compliance
with Regulation S, would not be available if the offering is part of a
plan or scheme to evade the registration provisions of the 1933 Act;
and
(n) this Agreement is not enforceable by the Contractor unless it has been
accepted by the Company.
ARTICLE 5
DURATION, TERMINATION AND DEFAULT
5.1 Effective Date
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This Agreement shall become effective as of the 31st day of July,
2000, and shall continue for a period ending the 31st day of July, 2002, subject
to earlier termination as provided for herein.
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5.2 Termination by the Company
--------------------------
This Agreement may be terminated by the Company at any time without
notice, in the event that:
(a) the Contractor files a voluntary petition in bankruptcy, or is
adjudicated as bankrupt or insolvent; or
(b) the Contractor fails to perform any of his services in the manner or
within the time required herein or commits or permits a material
breach of or default in any of his duties or obligations hereunder and
fails to cure such breach or default within 15 days of receipt of
written notice of a demand.
5.3 Termination by the Contractor
-----------------------------
This Agreement may be terminated by the Contractor at any time without
notice, for material breach of the Agreement by the Company.
5.4 Duties Upon Termination
-----------------------
Upon termination of this Agreement, the Contractor shall upon receipt
of all payments due and owing, promptly deliver the following in accordance with
the directions of the Company:
(a) a final accounting, reflecting the balance of expenses incurred on
behalf of the Company as of the date of termination; and
(b) all documents pertaining to the Company or this Agreement, including
but not limited to, all books of account, correspondence and
contracts, provided that the Contractor shall be entitled thereafter
to inspect, examine and copy all of the documents which it delivers in
accordance with this provision at all reasonable times upon three (3)
days' notice to the Company.
5.5 Compensation of Contractor on Termination
-----------------------------------------
Upon termination of this Agreement, the Contractor shall be entitled
to receive as its full and sole compensation in discharge of obligations of the
Company to the Contractor under this Agreement all payments due and payable
under this Agreement to the date of termination and the Contractor shall have no
right to receive any further payments; provided, however, that the Company shall
have the right to offset against any payment owing to the Contractor under this
Agreement any damages, liabilities, costs or expenses suffered by the Company by
reason of the fraud, negligence or wilful act of the Contractor, to the extent
such right has not been waived by the Company.
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ARTICLE 6
CONFIDENTIALITY
6.1 Ownership of Work Product
-------------------------
All reports, documents, concepts, products and processes together with
any marketing schemes, business or sales contracts, or any business
opportunities prepared, produced, developed, or acquired, by or at the direction
of the Contractor, directly or indirectly, in connection with or otherwise
developed or first reduced to practice by the Contractor performing the services
(collectively, the "Work Product") shall belong exclusively to the Company which
shall be entitled to all right, interest, profits or benefits in respect
thereof. No copies, summaries or other reproductions of any Work Product shall
be made by the Contractor or any of its agents or employees without the express
permission of the Company, provided that the Contractor is hereby given
permission to maintain one copy of the Work Product for its own use.
6.2 Confidentiality
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The Contractor shall not, except as authorized or required by its
duties, reveal or divulge to any person or companies any of the trade secrets,
secret or confidential operations, processes or dealings or any information
concerning the organization, business, finances, transactions or other affairs
of the Company, which may come to his knowledge during the term of this
Agreement and shall keep in complete secrecy all confidential information
entrusted to him and shall not use or attempt to use any such information in any
manner which may injure or cause loss, either directly or indirectly, to the
Company's business or may be likely so to do. This restriction shall continue
to apply after the termination of this Agreement without limit in point of time
but shall cease to apply to information or knowledge which may come into the
public domain.
The Contractor shall comply, and shall cause its agents and employees
to comply, with such directions as the Company shall make to ensure the
safeguarding or confidentiality of all such information. The Company may
require that any agent or employee of the Contractor execute an agreement with
the Company regarding the confidentiality of all such information.
6.3 Devotion to Contract
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During the term of this Agreement, the Contractor shall devote
sufficient time, attention, and ability to the business of the Company, and to
any associated company, as is reasonably necessary for the proper performance of
its services pursuant to this Agreement. Nothing contained herein shall be
deemed to require the Contractor to devote its exclusive time, attention and
ability to the business of the Company. During the term of this Agreement, the
Contractor shall, and shall cause each of its agents, employees or
subcontractors assigned to performance of the services on behalf of the
Contractor, to:
(a) at all times perform its services faithfully, diligently, to the best
of its abilities and in the best interests of the Company;
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(b) devote such of its time, labour and attention to the business of the
Company as is necessary for the proper performance of the Contractor's
services hereunder; and
(c) refrain from acting in any manner contrary to the best interests of
the Company or contrary to the duties of the Contractor as
contemplated herein.
6.4 Other Activities
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The Contractor shall not be precluded from acting in a function
similar to that contemplated under this Agreement for any other person, firm or
company.
ARTICLE 7
MISCELLANEOUS
7.1 Waiver; Consents
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No consent, approval or waiver, express or implied, by either party
hereto, to or of any breach of default by the other party in the performance by
the other party of its obligations hereunder shall be deemed or construed to be
a consent or waiver to or of any other breach or default in the performance by
such other party of the same or any other obligations of such other party or to
declare the other party in default, irrespective of how long such failure
continues, shall not constitute a general waiver by such party of its rights
under this Agreement, and the granting of any consent or approval in any one
instance by or on behalf of the Company shall not be construed to waiver or
limit the need for such consent in any other or subsequent instance.
7.2 Governing Law
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This Agreement and all matters arising thereunder shall be governed by
the laws of laws of the State of Nevada and the federal laws of the United
States applicable herein and the parties hereto agree to attorn to the
jurisdiction of the Courts thereof.
7.3 Successors, etc.
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This Agreement shall enure to the benefit of and be binding upon each
of the parties hereto and their respective heirs, successors and permitted
assigns.
7.4 Assignment
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This Agreement may not be assigned by any party except with the
written consent of the other party hereto.
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7.5 Entire Agreement and Modification
---------------------------------
This Agreement constitutes the entire agreement between the parties
hereto and supersedes all prior agreements and undertakings, whether oral or
written, relative to the subject matter hereof. To be effective any
modification of this Agreement must be in writing and signed by the party to be
charged thereby.
7.6 Headings
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The headings of the Sections and Articles of this Agreement are
inserted for convenience of reference only and shall not in any manner affect
the construction or meaning of anything herein contained or govern the rights or
liabilities of the parties hereto.
7.7 Notices
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All notices, requests and communications required or permitted
hereunder shall be in writing and shall be sufficiently given and deemed to have
been received upon personal delivery or, if mailed, upon the first to occur of
actual receipt or seventy -two (72) hours after being placed in the mail,
postage prepaid, registered or certified mail, return receipt requested,
respectively addressed to the Company or the Contractor as follows:
The Company:
E-COMMERCE GROUP, INC.
3675 Pecos McLeod, Suite 1400
Las Vegas, Nevada
USA
89121 - 3881
Attention: Tony Arnold
The Client:
S.C. MANAGEMENT LTD.
Suite L, King's Court
Nassau, Bahamas
Attention: Christine Ferguson
or such other address as may be specified in writing to the other party, but
notice of a change of address shall be effective only upon the actual receipt.
7.8 Time of the Essence
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Time is of the essence.
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7.9 Further Assurances
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The parties hereto agree from time to time after the execution hereof
to make, do, execute or cause or permit to be made, done or executed all such
further and other lawful acts, deeds, things, devices and assurances in law
whatsoever as may be required to carry out the true intention and to give full
force and effect to this Agreement.
7.10 Counterparts
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This Agreement may be executed in several counter-parts, each of which
will be deemed to be an original and all of which will together constitute one
and the same instrument.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the day and year first above written.
E-COMMERCE GROUP, INC.
Per:
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Authorized Signatory
S.C. MANAGEMENT LTD.
Per:
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Authorized Signatory