Business Advisory Agreement - busybox.com inc. and Cascade Partners LLC
BUSINESS ADVISORY AGREEMENT
This Agreement is made and entered into by an between busybox.com,
inc. (the "Company") and Cascade Partners LLC (the "Business Advisor"),
located at 1334 Third Street (Promenade), Suite 301, Santa Monica, CA 90401.
WHEREAS, The Company has engaged the Business Advisor to act as a
business consultant and advisor in connection with the Company's business
matters;
WHEREAS, The Business Advisor has experience in providing business
consulting and advisory services to corporations, partnerships and other
business organizations;
WHEREAS, the Company is seeking and the Business Advisor is willing
to furnish business consulting and advisory services to the Company on the
terms and conditions hereinafter set forth.
NOW THEREFORE, in consideration of, and for the mutual promises and
covenants contained herein, and for other good and valuable consideration,
the receipt of which is hereby acknowledged, the parties agree as follows:
1. PURPOSE. The company hereby engages the Business Advisor on a
non-exclusive basis for the term specified in this Agreement to render
business consulting and advisory services upon the terms and conditions set
forth herein.
2. REPRESENTATIONS OF THE BUSINESS ADVISOR AND THE COMPANY. The
Business Advisor represents and warrants to the Company that it is free to
enter into this Agreement and the business consulting and advisory service to
be provided pursuant to this Agreement are not in conflict with any other
contractual or other obligation to which the Business Advisor is bound. The
Company acknowledges that the Business Advisor is in the business of providing
business consulting and advisory services to others and that nothing herein
contained shall be construed to limit or restrict the Business Advisor in
conducting such business with respect to others, or rendering such services
to others.
3. DUTIES OF THE BUSINESS ADVISOR. During the term of this
Agreement, the Business Advisor will provide the Company with business
consulting and advisory services as specified below at the request of the
Company from time to time, provided that the Business Advisor shall not be
required to undertake duties not reasonably within the scope of the services
in which the Business Advisor is engaged generally. In performance of these
duties, the Business Advisor shall provide the Company with the benefits of
its best judgment and efforts. It is understood and acknowledged by the
parties that the amount of time spent rendering such business consulting and
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advisory services shall be determined according to the Business Advisor's and
the Company's mutually convenient schedule.
The Business Advisor's business consulting and advisory services
shall include but are not limited to:
1) Corporate structuring;
2) e-commerce planning, development and operations;
3) General business planning, development and operations; and
4) Mergers and acquisitions, and other business combinations.
4. TERM. The term of this Agreement shall be for a period of one (1)
year commencing on the execution of this Agreement.
5. FEE. In consideration of the business consulting and advisory
services to be rendered pursuant to this Agreement, the Company agrees to
issue 100,000 shares of its restricted common stock, valued at $2 per share,
to the Business Advisor. Such shares of common stock shall be issued to the
Business Advisor under the same terms and conditions as the shares of common
stock issued pursuant to the company's Private Placement Memorandum, dated
April 2, 1999, a copy of which has been provided to the Business Advisor.
However, the Company agrees to provide the Business Advisor with piggy-back
registration rights related to these shares of common stock, such that the
Company agrees to include these shares of common stock in any secondary
registration of securities of the Company subsequent to the Company's
proposed initial public offering of securities.
6. EXPENSES. In addition to the fees payable hereunder, the Company
shall reimburse the Business Advisor, within thirty (30) business days of
its request, for any and all reasonable out-of-pocket expense incurred in
connection with the services performed by the Business Advisor and its legal
counsel pursuant to this Agreement, including (I) reasonable hotel, meals and
associated expenses; (ii) reasonable charges for travel; (iii) reasonable
long-distance telephone calls; and (iv) other reasonable expenses spent or
incurred on the Company's behalf. All such monthly expenses in excess of
$5,000 shall be pre-approved by the Company.
7. INTRODUCTION OF CLIENTS, PARTNERS, ORIGINATION OF LINE OF CREDIT
AND SIMILAR TRANSACTIONS. In the event the Business Advisor originates,
directly or indirectly, a line of credit, or other financial instrument or
arrangement, with a lender or a corporate partner, the Company agrees to pay
a fee of five percent (5%) of the total amount of the line of credit,
financial instrument or financial arrangement. In the event the Business
Advisor introduces directly or indirectly the Company to a joint venture
partner or client and sales develop as a result of the introduction, the
Company agrees to pay a fee of five percent (5%) of total sales generated
directly from this introduction during the first three years following the
date of the first sale. Total sales shall mean cost receipts less any
applicable refunds, returns, allowances, credits and
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shipping charges and monies paid by the Company by way of settlement or
judgment arising out of claims made by or threatened against the Company.
Payments shall be paid on the 15th day of each month following the receipt of
customers's payments. In the event of any adjustments are made to the total
sales after the commission has been paid, the Company shall be entitled to an
appropriate refund or credit again future payments under this Agreement.
All fees to be paid pursuant to this paragraph, except as otherwise
specified, are due and payable to the Business Advisor in good funds at the
closing or closings of any transaction specified in this paragraph. In the
event that this Agreement shall not be renewed or terminated for any reason,
notwithstanding any such non-renewal or termination, the Business Advisor
shall be entitled to a full fee as provided under this paragraph for any
transaction for which the discussions were initiated during the term of this
Agreement and which is consummated within a period of twelve months after
non-renewal or termination of this Agreement. Nothing herein shall impose any
obligation on the part of the Company to enter into any transaction or to use
any services of the Business Advisor offered pursuant to this paragraph or
this Agreement.
8. MERGERS, ACQUISITIONS, AND OTHER COMBINATIONS. You have agreed that
Business Advisor may act as a non-exclusive business advisor for you in
various transactions in which the Company may be involved, including but not
limited to, mergers, acquisitions, business combinations, joint ventures,
debt or equity placements or other corporate transactions. The Company hereby
agrees that in the event that the Business Advisor shall first introduce to
the Company another party or entity, and that as a result of such
introduction, a transaction between such entity and the Company is
consummated ("Consummated Transaction"), then the Company shall pay to the
Business Advisor a fee as follows:
a. Five Percent (5%) of the first $1,000,000 of the consideration paid
in such transaction;
b. Four percent (4%) of the consideration in excess of $1,000,000 and up
to $2,000,000;
c. Three percent (3%) of the consideration in excess of $2,000,000 and up
to $3,000,000;
d. Two percent (2%) of any consideration in excess of $3,000,000 and up
to $4,000,000;
e. One percent (1%) of any consideration in excess of $4,000,000.
The fee due Business Advisor shall be paid by the Company in good funds
and/or securities at the closing of the Consummated Transaction as mutually
agreed between the Company and the Business Advisor without regard to whether
the Consummated Transaction involves payments in cash, in stock or in a
combination of stock and cash, or is made on an installment sale basis. By
way of example, if the Consummated Transaction involves securities of the
acquiring entity (whether securities of the Company, if the Company is the
acquiring party, or securities of another entity, if the Company is selling
party) having a value of $5,000,000 the consideration to be paid by the
Company to the Business Advisor at closing shall be $150,000.
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In the event that for any reason the Company shall fail to pay the
Business Advisor all or any portion of the fee payable hereunder when due,
interest shall accrue and be payable on the unpaid balance due hereunder from
the date when first due through and including that date when actually
collected by the Business Advisor, at a rate equal to two (2) points over the
prime rate of Citibank, N.A. in New York, New York, computed on a daily basis
and adjusted as announced from time to time.
Notwithstanding anything herein to the contrary, if the Company shall,
within 180 days immediately following the termination of the Agreement,
conclude a Consummated Transaction with any party introduced by the Business
Advisor to the Company prior to the termination of the Agreement, the Company
shall also pay the Business Advisor the fee determined above.
The Company represents and warrants to the Business Advisor that the
engagement of the Business Advisor hereunder has been duly authorized and
approved by the board of directors of the Company and this Agreement has been
duly executed and delivered by the Company and constitutes a legal, valid and
binding obligation of the Company.
9. USE OF BUSINESS ADVICE BY THE COMPANY. The company acknowledges that
all opinions and advice (written or oral) given by the Business Advisor to
the Company in connection with the engagement of the Business Advisor are
intended solely for the benefit and use of the Company in considering the
transaction to which they relate, and the Company agrees that no person or
entity other than the Company shall be entitled to make use of or rely upon
the advice of the Business Advisor to be given hereunder, and no such opinion
or advice shall be used for any other purpose or reproduced, disseminated,
quoted or referred to at any time, in any manner or for any purpose, not may
the Company make any public references to the Business Advisor, or use of
the Business Advisor's name in any annual reports or any other reports or
releases of the Company without the prior written consent of the Business
Advisor.
The Company acknowledges that the Business Advisor makes no
representations whatsoever as to making a market in the Company's
securities or to recommending or advising its clients, or any other persons,
to purchase the Company's securities. Research reports or corporate business
reports that may be prepared by the Business Advisor will, when and if
prepared, be done solely on the merits or judgment and analysis of the
Business Advisor or any senior personnel of the Business Advisor.
10. COMPANY INFORMATION; CONFIDENTIALITY. The Company recognizes and
confirms that, in advising the Company and in fulfilling its engagement
hereunder, the Business Advisor will use and rely on data, material and other
information furnished to the Business Advisor by the Company. The Company
acknowledges and agrees that in performing its services under this
engagement, the Business Advisor may rely upon the data, material and other
information supplied by the Company without independently verifying the
accuracy, completeness or veracity of same. In addition, in the performance
its services, the Business Advisor may look to such others for such factual
information, economic advice and/or research upon which to base its advice to
the Company hereunder as the Business Advisor shall in good faith deem
appropriate.
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Except as contemplated by the terms hereof or as required by applicable
law, the Business Advisor shall keep confidential all no-public information
provided to it by the company, and shall not disclose such information to any
third party without the Company's prior consent, other than such of its
employees and advisors as the Business Advisor determines to have a need to
know.
11. INDEMNIFICATION. The Company shall indemnify and hold harmless the
Business advisor against any and all liabilities, claims, lawsuits, including
any and all awards and/or judgments to which it may become subject under the
Securities Act of 1933, (the "Act"), the Securities Exchange Act of 1934, as
amended (the "1934 Act") or any other federal or state statute, at common law
or otherwise, insofar as said liabilities, claims and lawsuits (including
costs, expenses, awards and/or judgements) arise out of or are
in connection with the services rendered by the Business Advisor or any
transactions in connection with this Agreement, except for any liabilities,
claims, lawsuits (including awards and/or judgements), arising out of willful
misconduct or willful omissions of the Business Advisor. In addition, the
Company shall also indemnify and hold harmless the Business Advisor against
any and all reasonable costs and expenses, including reasonable legal counsel
fees and expenses, incurred relating to the foregoing.
The Business Advisor shall give the Company prompt notice of any such
liability, claim or lawsuit which the Business Advisor contends is the subject
matter of the Company's indemnification and the Company thereupon shall be
granted the right to take any and all necessary and proper action, at its
sole cost and expense, with respect to such liability, claim or lawsuit,
excepting therefrom any and all proceedings or hearings before any regulatory
bodies and/or authorities.
The Business Advisor shall indemnify and hold the Company harmless
against any and all liabilities, claims and lawsuits, including any and all
awards and/or judgments to which it may become subject under the Act, the
1934 Act or any other federal or state statute, at common law or otherwise,
insofar said liabilities,claims and lawsuits (including costs, expenses,
awards and/or judgements) arise out of or are based upon willful misconduct or
willful omissions of the Business Advisor. In addition, the Business Advisor
shall also indemnify and hold the Company harmless against any and all
reasonable costs and expenses, including reasonable legal counsel fees and
expenses, incurred relating to the foregoing.
The Company shall give the Business Advisor prompt notice of such
liability, claim or lawsuit which the Company contends is the subject matter
of the Business Advisor's indemnification and the Business Advisor thereupon
shall be granted the right to take any and all necessary and proper action,
at its sole cost and expense, with respect to such liability, claim or
lawsuit, including the right to settle, compromise or dispose of such
liability, claim or lawsuit, excepting therefrom any and all proceedings or
hearings before any regulatory bodies and/or authorities.
12. THE BUSINESS ADVISOR AS AN INDEPENDENT CONTRACTOR. The Business
Advisor shall perform its services hereunder as an independent contractor and
not as an employee of the Company or an affiliate thereof. It is expressly
understood and agreed to by the parties hereto
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that the Business Advisor shall have no authority to act for, represent or
bind the Company or any affiliate thereof in any manner, except as may be
agreed to expressly by the Company in writing from time to time.
13. ENTIRE AGREEMENT. This Agreement between the Company and the Business
Advisor constitutes the entire agreement and understanding of the parties
hereto, and supersedes any and all previous agreements and understandings,
whether oral or written, between the parties with respect to the matters set
forth herein.
14. MISCELLANEOUS.
(a) Any notice or communication permitted or required hereunder shall be
in writing and shall be deemed sufficiently given if hand-delivered or sent
by facsimile and postage prepaid by certified or registered mail,
return-receipt-requested, to the respective parties herein or to such other
address as either party may notify the other in writing.
(b) This Agreement shall be binding upon and inure to the benefit of each
of the parties hereto and their respective successors, legal representative
and assigns.
(c) This Agreement may be executed in any number of counterparts, each of
which together shall constitute one and the same original document.
(d) No provision of this Agreement may be amended, modified or waived,
except in a writing signed by all of the parties hereto.
(e) This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware. The parties agree that any action brought
by any party against another party in connection with any rights or
obligations arising out of this Agreement shall be instituted in a proper
federal or state court of competent jurisdiction with jurisdiction only in
the State of Delaware. A party to this Agreement named as a defendant in any
action brought in connection with this Agreement in any court outside of the
State of Delaware shall have the right to have the case dismissed, requiring
the other party to refile such action in a proper court in the State of
Delaware.
(f) This Agreement has been duly authorized, executed and delivered by
and on behalf of the Company and the Business Advisor.
IN WITNESS WHEREOF, the parties hereto, upon proper authority, have
caused this Agreement to be duly executed, on the 15th day of October, 1999.
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busybox.com, inc.
By: /s/
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Patrick A. Grotto
Chairman of the Board and
Chief Executive Officer
CASCADE PARTNERS LLC
By: /s/
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Matt Ward
President and Chief
Executive Officer
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