Consulting Agreement
Agreement, made on the 12th day of July 1999, by and between Acceleration
Software International Corporation, 1223 NW Finn Hill Road, Poulsbo, WA 98370
(the "Company") and Millennium Capital Quest, 222 Munson Road., Wolcott, CT
06716 (the "Consultant")
In consideration of the mutual covenants contained herein, the parties hereto
agree as follows::
1. The Consultant, together with Gregg R. Nolan, Chairman/CFO, C. James
Margelot, President/CEO and T. Garcia, CIO, for the Consultant will provide
consulting services consisting of financial public relations, advise regarding
corporate structuring and marketing advice. Additionally, the Consultants shall
assist Company management and legal counsel in structuring the Company for
expanded marketing operations and business development and other general
management consulting services as required during the term of this Agreement.
Further the Consultants will coordinate communication with the Board of
Directors, appropriate federal agencies, internet webpage developers and ISP's,
affiliated companies, banking institutions, investment banks, equity investor
groups and by assisting attorneys and accountants selected by the Company
familiar with such procedures. The Consultants shall advise the Company on
structure of the promotion, and assist the Company in development of its
financial marketing plan.
2. Further, the Consultants will prepare a summary financing plan, assist
attorneys who will review draft offering memorandum, facilitate web site
productions for the internet and act as a consultant to the attorney and
accountants for the Company and assist attorneys and accountants where
necessary. The Consultants acknowledge that all "Confidential Information"
provided to them by the Company is proprietary and shall be treated in strict
confidence. Further, The Consultants agree that the distribution of any such
information to third parties in the normal course of business and the operations
of this engagement shall only be made upon the written consent of the Company.
Further, the Consultants agree to return any Confidential Information upon the
termination or conclusion of the assignment. For purposes of this Agreement, the
term "Confidential Information" means any Company proprietary information,
technical data, trade secrets or know-how, including, but not limited to,
computer software, documentation, research, product plans, products, services,
suppliers, customer lists, prices and costs, markets, developments, inventions,
notebooks, processes, formulas, technology, designs, drawings, engineering,
hardware configuration information, marketing, licenses, finances, budgets or
other business information disclosed to Consultant by Company either directly or
indirectly in writing, orally or by drawings or observation. Confidential
Information includes, but is not limited to, information pertaining to any
aspects of the Company's business which is either information not known by
actual or potential competitors of the Company or is proprietary information of
the Company or its customers or suppliers, whether of a technical nature or
otherwise.
3. The Company fully understands that the Consultants are not lenders,
broker-dealers, investment bankers, underwriters or securities sales agents in
any form. They do not have or control investment capital. The Consultants may
not by law, solicit the sale of any securities for any compensation whatsoever,
but will act as financial and public relations advisors to the Company and
advise the Company on presentations to new business clients and its full range
of financial resources. Consultant is an independent contractor. This Agreement
shall not create nor be deemed to create any other relationship between Company
and Consultant. Neither Consultant nor any of its agents shall create any
obligation, responsibility, express or implied, on behalf of or in the name of
Company or by Company in any way except as specifically authorized in this
Agreement. Consultant shall maintain its own workers' compensation coverage, and
shall pay any and all tax due on amounts it receives hereunder, and neither
Consultant nor any of its agents or employees shall be entitled to participate
in or receive benefits under any Company employee-benefit plans.
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4. It shall be the Consultant's specific task to assist the Company by
rendering advice and assistance to a competent securities attorney and provide
the Company advice in marketing efforts. The Company understands that due to the
many variables involved, the Consultants make no representation whatsoever as to
its opinion of the Company's ability to sell any securities, such opinion coming
from the Company's attorney.
5. The Company agrees to compensate the Consultants for the work performed
to date and to be performed under this Agreement, based upon achieving certain
milestones, including development of financial and business plans and
development of a business financing package for the Company according to the
following schedule and as outlined below:
A. Consultants will be entitled to payments from Company in accordance with
the following:
(i) $25,000.00 upon the start of the preparation of Company
disclosure documents and its required attachments, marketing materials and its
website;
(ii) $12,500.00 upon filing with the SEC of a registration
statement on form SB-2. (It being further understood that the entire package
shall be reviewed and filed subject to the advice of counsel for the Company
and the attachment of the opinion and consent letters of counsel);
(iii) $50,000 upon the Company having $3,000,000 in cash in the bank;
(iv) $100,000 upon the Company having $18,000,000 in cash in the
bank; and
(v) A grant under the Company's 1999 stock option plan of options
to purchase shares of common stock of the Company for a ten (10) year period at
an exercise price of $1.50 per share in an amount equal to 0.1% of the common
stock of the Company outstanding.
Any fees actually paid to the Consultants are non-refundable and shall be
used to conduct due diligence, investigation of the corporate financing plan and
development program as appropriate and to coordinate the structure of financings
with legal and accounting counsel.
B. Further, all other fees and costs incurred by the Company on its own
behalf, such as legal, accounting, printing, promotion and travel are those of
the Company. In consideration of the above Agreements, the Consultants agree to
provide to the Company, financial public relations services, marketing and
consultation services, and its advise on document structure, filing, blue sky
regulations, contacting Investors, Syndicators, Broker-Dealers, databases and
access to its Web Page developer, telemarketing, internet and computer systems.
6. The Company agrees to reimburse the Consultants for clerical, printing,
media placement, and other out-of-pocket expenses, if incurred, in connection
with its services to the Company. All such expenses shall be approved in advance
by the Company. These expenses shall include any advertising credit advanced to
the company by the consultants, to be repaid from the minimum proceeds of the
offering. At the sole discretion of the Company, ad credit may be advanced to
the Company in an amount not to exceed $500,000.00
7. In addition to the functions to be performed in connection with the
offering pursuant to this agreement, the consultants agree to make themselves
additionally available to the Company at all reasonable times as necessary for
the duration of the consulting and marketing phase of the project. This
Agreement may be terminated with or without cause by either party on thirty days
written notice. Unless terminated for cause by Company (which includes any
failure by the Consultants to abide by all terms of this agreement) (a) the
parties agree to delivery of all agreed-upon work product and the payment of all
installment fees and reimbursement of all outstanding pre-agreed upon expenses
of the Consultants due through the date of
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termination, and (b) in the event that at the date of Company's termination
notice, the Company shall have an effective offering, be in the process of fund
raising and materially be using the work product of the Consultants to raise
capital in accordance with this Agreement, the Company agrees to provide proof
of funds raised to date and pay to the Consultants the compensation described in
items (iii) through (v) in paragraph 5.A. above.
8. The Company understands that the Consultants must at all times rely upon
the information supplied to the Consultants by its members, managers, officers,
directors, agents and employees. Therefore, the Company agrees to indemnify,
hold harmless and defend the Consultants, its officers, directors, agents and
employees at the Company's expense (including attorneys' fees) arising from any
proceeding or suit relating to any material inaccuracy or incompleteness of any
information supplied to the Consultants by the Company, and violation of any
state or federal securities, franchise or business opportunity law committed by
the Company. The Consultants agree to indemnify, hold harmless and defend the
Company, its officers, directors, agents and employees at the Consultant's
expense (including attorneys' fees) in any proceedings or suit and for any
damages due to any negligence or unlawful or intentional misconduct on the part
of the Consultants, its agents or employees.
9. The Company and the Consultants mutually agree that this Agreement and
all provisions and rights hereto shall not be assigned to any other party
without the mutual consent in writing by both parties to this Agreement. This
Agreement shall be binding on all sucessors and assigns of the parties hereto.
10. This contract shall be construed in accordance with the laws of the
State of Washington. The Company represents it will be in compliance with and
authorized to do business in any additional states in which it is required to do
so. Further, the parties agree that all disputes shall first be subject to
resolution by arbitration according to the rules and provisions defined by the
American Arbitration Association. Any arbitration shall be conducted in King
County, Washington. The arbitrators shall have no authority to award any
punitive or exemplary damages, or to vary or ignore the terms of the Agreement.
The costs of arbitration, including reasonable attorneys' fees incurred by the
prevailing party (including any such costs incurred on appeal), shall be paid to
the prevailing party by the party designated as such by the arbitrator (or
court, as applicable).
11. The term of this contract shall be for a period of 12 months, renewable
by mutual agreement of the parties.
12. The parties reserve the right to the control and use of their names and
all symbols, trademarks, or service marks presently existing or later
established. Neither party shall use the other party's name, symbols,
trademarks, or service marks or such marks as such party controls in advertising
or promotional materials or otherwise without the prior written consent of such
other party. Any use by a party, without the approval of the other party, of the
name, symbols, trademarks or service marks of such other party shall cease
immediately upon the earlier of written notice of such other party or
termination of this Agreement. Each party hereby grants the other the right to
use its name, address and telephone number in connection with the other party's
obligations hereunder.
13. Prior Agreements. No other prior agreements exist.
In witness whereof, the parties hereto have executed this Agreement
on the date above written.
MILLENNIUM CAPITAL QUEST CORP.
"The Consultants"
/s/ Gregg R. Nolan
Authorized (for MCQ)
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ACCELERATION SOFTWARE INTERNATIONAL CORPORATION
"The Company"
/s/ Clint Ballard
Clint Ballard, CEO
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Acceleration Software International Corporation
1223 NW Finn Hill Road
Poulsbo, Washington 98370
March 31, 2000
Millennium Capital Quest
222 Munson Road
Wolcot, Connecticut 06716
Re: Consulting Agreement, dated July 12, 1999 Between Us
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Gentlemen:
This letter confirms our agreement that the exercise price of the
stock options listed in Section 5A(v) of the above-referenced Consulting
Agreement shall be $4.78 per share. Except as set forth above, the terms and
provisions of the Consulting Agreement shall remain in full force and effect.
Sincerely,
ACCELERATION SOFTWARE
INTERNATIONAL CORPORATION
By: /s/ Clint Ballard
-----------------------------------
Clint Ballard
President
Accepted and agreed as of
the date first above written:
MILLENNIUM CAPITAL QUEST
By: /s/ Gregg R. Nolan
-----------------------------
Name: Gregg R. Nolan
Title: Chairman/CFO
