Advisory Agreement - BJM Consultants Inc. and YP.Net Inc.
ADVISORY AGREEMENT
THIS ADVISORY AGREEMENT (this Agreement') is made this 25th day of October,
1999 (the "Effective Date"), by and between BJM CONSULTANTS, INC., a Florida
corporation ("Advisor") and YP.NET, INC., a Nevada corporation, with its offices
located at 484O East Jasmine Street, Suite 105, Mesa, AZ 85205 (the "Company").
WHEREAS, Advisor and Advisors' Personnel (as defined below) have experience
in evaluating and effecting mergers and acquisitions, advising corporate
management, and in performing general administrative duties for publicly-held
companies and development stage investment ventures; and
WHEREAS, the Company desires to retain Advisor to advise and assist the
Company in its development 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 is hereby acknowledged, the Company and Advisor agree
as follows:
1. Engagement. The Company hereby retains Advisor, effective as or the late
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hereof (the "Effective Date") and continuing until termination, as provided
herein , to assist the Company in its effecting the purchase of businesses
and assets relative to its business and growth strategy, resolution of
outstanding debt and obligations of the Company, the introduction of the
Company to brokers and dealers, public relations firms and consultants and
others that may assist the Company in its plans and future development and
to arrange for the purchase of outstanding warrants issued by the Client
(the "Services"). The Services are to be provided on a "best efforts" basis
directly and through Advisor's officers or others employed or retained and
under the direction of Advisor ("Advisor's Personnel"); provided, however,
that the Services shall expressly exclude all legal advise, accounting
services or other services which require licenses or certification which
Advisor may not have.
2. Term. This Agreement shall have an initial term of (1) year (the "Primary
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Term"). commencing with the Effective Date. 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 tot the other part: terminating the Agreement. Any notice to
terminate given hereunder shall be in writing g and shall he delivered at
least thirty (30) days prior to the end of the Primary Term or any
subsequent Extension Period.
3. Time and Effort of Advisor. Advisor shall allocate time and Advisor's
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Personal as it deems necessary to provide the Services. The particular
amount of time may vary front day to day or week to week. Except as
otherwise agreed, Advisor's monthly statement identifying, in general,
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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 herein under by Advisor, neither Advisor nor
Advisor's Personnel shall 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 in any subsequent Business Opportunity (as
defined herein) undertaken by the Company as a result of advice provided by
Advisor or Advisor's Personnel.
4. Compensation. The Company agrees to pay Advisor an initial fee for the
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signing of this Agreement by way of the delivery by the Company of Five
Hundred Thousand (500,000) shares of the Company's restricted common stock
to the Advisor on or before January 15, 2000 at Company's option. It is
understood that this initial fee is earned upon signing this Agreement.
Additionally, the Company shall pay Advisor a monthly of Five Thousand
Dollars ($5,000) due and payable on the first business day of each month of
the Term. Company's responsibility for payment of Advisory Fee is not
contingent on the implementation of Advisor's recommendations. Consulting
in these matter frequently take courses that cannot be predicted, and
Advisor can give no guarantee concerning the outcome.
5. Costs and Expenses. All third party and out-of-pocket expenses incurred
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by Advisor in the performance of the Services shall be paid by the Company,
or Advisor shall be reimbursed if paid by Advisor on behalf of the Company,
within ten (10) days of receipt of written notice by Consultant, provided
that the Company must approve in advance all such expenses in excess of
$500 per month with the exception of travel expenses to and from Company's
offices.
6. Place of Services. The Services provided by Advisor or Advisor's Personnel
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hereunder will be performed at Advisor's offices except as otherwise
mutually agreed by Advisor and the Company.
7. Independent Contractor. Advisor and Advisor's Personnel will act as an
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independent contractor in the performance of its 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 relative to Advisor's Personnel, and any and all business
license fees as may be required. This Agreement neither expressly nor
impliedly creates a relationship of principal and agent, or employee and
employer, between Advisor's Personnel and the Company. Neither Advisor nor
Advisor's Personnel are authorized to enter into any agreements on behalf
of the Company. The Company expressly retains the right to approve, in its
sole discretion, each Asset Opportunity or Business Opportunity introduced
by Advisor, and to make all final decisions with respect to effecting a
transaction on any business Opportunity.
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8. Rejected Asset Opportunity or Business Opportunity. If, during the Primary
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Term of this Agreement or any Extension Period, the Company elects not to
proceed to acquire, participate or invest in any Business Opportunity
identified and/or selected by Advisor, notwithstanding the time and expense
the Company may have incurred reviewing such transaction, such Business
Opportunity shall revert back to and become proprietary to Advisor, and
Advisor shall be entitled to acquire or broker the sale or investment in
such rejected Business Opportunity for its own account, or submit such
assets or Business Opportunity elsewhere. In such event, Advisor shall be
entitled to any and all profits or fees resulting from advisor's purchase,
referral or placement of any such rejected Business Opportunity, or the
Company's subsequent purchase or financing with such Business Opportunity
in circumvention of Advisor.
9. No Agency Express or Implied. This Agreement neither expressly nor
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impliedly creates a relationship of principal and agent between the Company
and Advisor, or employee and employer as between Advisor's Personnel and
the Company.
10. Termination. The Company and Advisor may terminate this Agreement prior
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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. 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 of Advisor's Personnel;
or,
ii. If Advisor willfully breaches or neglects the duties required to
be performed hereunder.
b. By Advisor.
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i. Non-payment of fees;
ii. Failure to provide forthright information cooperation or support
for Advisor's efforts;
iii. Misrepresentation of, or failure or refusal to disclose facts;
iv. Failure or refusal to accept advice.
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v. If the Company ceases business or, other than in an Initial
Merger, sells a controlling interest to a third party, or agrees
to a consolidate on or merger of itself with or into another
corporation, or enters into such a transition outside of the
scope of this Agreement, or sells substantial all of its assets
to another corporation, entity or individual outside of the scope
of this Agreement, or,
vi. If the Company subsequent to the execution hereof has a receiver
appointed for its business or assets, or otherwise becomes
insolvent or unable to satisfy its obligations in the ordinary
course of, including but not limited to the obligation to pay the
Initial Fee, the Transaction Fee, or the Advisory Fee; or
vii. If the Company subsequent to the execution hereof 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 a
bankrupt; or,
viii.If any of the disclosures made herein or subsequent hereto by
the Company to consultant 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
lO(a)(i) and (ii) above, the Company shall only be responsible to pay Advisor
for unreimbursed expenses, Advisory Fee and Transaction 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
lO(b)(i) through (viii) above, Advisor shall be entitled to any outstanding
unpaid portion of reimbursable expenses, Transaction Fee, if any, and the
balance of the Advisory Fee for the remainder of the unexpired portion of the
applicable term (Primary Term or Extension Period) of the Agreement.
11. Indemnification. Subject to the provisions herein the Company and
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Advisor agree to indemnify, defend and hold each other harmless from and
against all demands, claims, actions, losses, damages, liabilities, costs
and expenses, including without limitation, interest, penalties and
attorneys' fees and expenses asserted against or imposed or incurred by
either party by reason of or resulting from any action or a breach of an
representation, warranty, covenant, condition, or agreement of the other
party to this Agreement.
12. Remedies. Advisor and the Company acknowledge that in the event of a
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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
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be enforceable in a court of equity by a decree of specific perforce. Such
remedy, however, shall be cumulative and nonexclusive and shall be in
addition to any other remedy to which the parties may be entitled.
13. Miscellaneous.
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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
it 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 noncompliance with this Agreement shall be held to be a
waiver of any other or subsequent breach or noncompliance.
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 if
addressed
i. In the case of the Company:
YP.Net, Inc.
4840 East Jasmine Street. Suite 105
Mesa, Arizona 85205
Telephone: (480) 654-9646
Telefax: (480) 654-9727
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Attention: William O'Neal, Sr. Vice President/Genera Counsel
ii. In the case of Advisor
BJM Consultants, Inc.
2283 S. Lake Reedy Blvd.
Frostproof, Florida 33843
Telephone: (941) 635-1872
Telefax: (941) 635-7601
Attention: George Minutaglio
or to such other person or address designated in writing by the Company or
Advisor to receive notice.
g Headings. The section and subsection headings in this Agreement are
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inserted the 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 interacted
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for in Arizona, and shall be governed by the laws of the State of
Arizona, and the 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 between
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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 or
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 corrective for all purposes. At the request of any party hereto,
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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.
COMPANY: ADVISOR:
YP.NET, INC., a Nevada corporation BJM CONSULTANTS, INC., a Florida
corporation
By: /s/ William D. O'Neal By: /s/ George Minutaglio
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Name: William D. O'Neal Name: George Minutaglio
Title: President Title: Vice President
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