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**Exhibit10.24**

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**SPECIALCOMMITTEE COMPENSATION AGREEMENT**

 

                This Agreement (“Agreement”), dated July 1, 2001, isentered into by and between Edward S. Adams, a Minnesota resident (“Adams”),and VirtualFund.com, Inc., a Minnesota corporation (the “Company”).

**R E C I T A L S**

                WHEREAS, the Company wishes to procure the servicesof Adams for the Company as a member of the Special Acquisition/InvestmentCommittee, whether or not Adams is on the Board of Directors of the Company,and Adams is willing to provide his services to the Company on the terms andconditions hereinafter set forth.

                NOW THEREFORE, in consideration of the premisesrecited above and the mutual promises and agreements herein, the parties tothis Agreement hereby agree as follows:

1.             Duties.

1.01.        Duties. The Company herebyappoints Adams as a member of the Special Acquisition/Investment Committee andAdams hereby accepts his position on such Special Acquisition/InvestmentCommittee on the terms and conditions set forth in this Agreement. Adams shallhave such authority and responsibility, and shall serve in such capacitiesconsistent with that status, as may from time to time be assigned to him by theBoard of Directors of the Company.  Inconnection with his role as a member of the Special Acquisition/InvestmentCommittee, Adams will work to find a business opportunity, investment orinvestments, and/or transaction to enhance value for the shareholders of theCompany and in connection therewith will:

•                    Contact, discuss and elicit interest from investmentbankers, business brokers, accountants, attorneys and other professionals (andspheres of influence) who might help the Company to identify and effectuate atransaction;

•                    Conduct and oversee the due diligence required toanalyze transaction options;

•                    Review and analyze proposals for a transaction, bothpreliminary and firm, that are received from interested parties;

•                    Present the Board of Directors with details regardingproposed transactions for their consideration and input;

•                    Negotiate the structure of, parameters of andvaluation with respect to any transaction;

•                    Negotiate any letters of intent and all otherdocuments necessary to consummate a transaction;

•                    Coordinate all necessary legal, accounting or othernecessary professional assistance required to successfully consummate atransaction;

•                    Negotiate with lending or financial institutions orany other sources of capital, if necessary, to successfully consummate atransaction; and

•                    Coordinate all of the activities contemplated in thepursuit of the above responsibilities.

 

 

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1.02.        Performance of Duties. Adamsshall serve the Company and its subsidiaries faithfully and to the best of hisability, and devote such time as may reasonably be required to the business andaffairs of the Company and its subsidiaries during the term of this Agreement.

1.03.        No Other Agreements. Adams herebyconfirms that he is under no contractual commitments inconsistent with hisobligations set forth in this Agreement.

2.             Term.  The term of this Agreement shall begin onthe date first above written and expire on the date that is three (3) yearsafter such date (even if Adams ceases to serve as a member of the Board ofDirectors of the Company during the term of this Agreement), unless thisAgreement is terminated earlier in accordance with Section 5.01hereof.  Except as otherwise specifiedherein, all rights, duties and obligations of Adams, including withoutlimitation the compensation and benefits provided in Section 4 of thisAgreement, shall commence as of the date first above written.

3.             Location. Adams shallperform his duties in a location or locations as may be mutually agreed upon bythe Company and Adams. 

4.             Compensation and Benefits.

4.01.        Base Compensation. During theTerm of this Agreement, the Company shall pay to Adams base compensation at therate of not less than $12,500 per month in addition to his regular directorfees.  Such base compensation shall bepaid at the beginning of each calendar month during the term of this Agreement.Adams’s base compensation shall be reviewed annually and may be increased (butnot decreased).

4.02.        StockOptions.  The Company shall grant toAdams, on the anniversary date of this Agreement, a stock option under theCompany’s Stock Plan to purchase a total of 100,000 shares of the Company’sCommon Stock for each year of service during the Term at a price of $0.15 pershare, in a manner otherwise consistent with the terms of the Company’s StockOption Plan.

 

4.03.        Bonuses and Incentive Compensation.  In addition to the base compensation and thestock options described in Sections 4.01 and 4.02, Adams shall be eligible toparticipate in any bonus or performance based incentive compensation planswhich are established by the Board of Directors of the Company or provided forby the Board of Directors of the Company in connection with a businessopportunity, investment or investments, and/or transaction undertaken orcompleted by the Company.

4.04.        Expenses.  The Company shall pay or reimburse Adams forall reasonable and necessary out-of-pocket expenses incurred by him (including,but not limited to, travel, entertainment and moving expenses) in theperformance of his duties under this Agreement, subject to the presentment ofappropriate vouchers in accordance with the Company’s normal policies forexpense verification.

 

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5.             Termination.

 

5.01.        Termination. Adams’s duties underthis Agreement may be terminated prior to the expiration of the Term set forthin Section 2, in which case the Company will be obligated to compensate Adamsas provided for in Section 5.02:

(a)           Termination uponDeath. Adams’s duties under this Agreement shall terminate upon his death.

(b)           Termination uponDisability. The Company may terminate Adams’s duties in the event thatAdams is determined to be disabled, as defined in Section 5.03.

(c)           Termination bythe Company without Cause.  TheCompany may terminate Adams’s duties under this Agreement for any reason or forno reason upon ninety (90) days’ written notice to Adams.

(d)           Termination bythe Company for Cause. The Company may terminate Adams’s duties under thisAgreement for Cause, as defined in Section 5.03, effective immediately upondelivery to Adams of written notice of such termination; provided, however,that Adams shall not be terminated for Cause unless and until the Company shallhave delivered to Adams a copy of a resolution duly adopted by the affirmativevote of not less than a majority of the entire membership of the Company’sBoard of Directors at a meeting called and held for such purpose (afterreasonable notice to Adams and an opportunity for Adams, together with Adams’scounsel, to be heard by said Board), finding that, in the good faith opinion ofsaid Board, Adams’s conduct constitutes Cause for termination and specifyingthe particulars thereof in detail.

(e)           Termination byAdams. Adams may terminate his duties with the Company hereunder at anytime (i) for Good Reason, as defined in Section 5.03, effectiveimmediately upon delivery to the Company of written notice of such termination,or (ii) for any reason or for no reason upon ninety (90) days’ writtennotice to the Company.

(f)            Termination byMutual Consent. The parties may terminate the their mutual relationshipunder this Agreement at any time by mutual consent.

5.02.        Compensation Upon Termination.

(a)           Death orDisability. In the event this Agreement is terminated by reason of Adams’sdeath or disability, Adams shall be entitled to payment of compensation earnedthrough the date of termination; payment of any bonus or other incentivecompensation for the year in which such death or disability occurs, pro ratedfor the portion of the year preceding the date of termination; andreimbursement of expenses incurred through the date of termination. Adams shallnot be entitled to receive any compensation, bonus or other payments orbenefits under this Agreement with respect to any periods after the date oftermination by reason of death or disability.

(b)           Termination byCompany without Cause or by Adams for Good Reason. If Adams’s duties underthis Agreement are terminated by the Company without Cause pursuant to Section5.01(c) or by Adams for Good Reason pursuant to Section 

 

 

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5.01(e)(i), Adamsshall be entitled to payment of compensation earned through the date oftermination; payment of any bonus or other incentive compensation for the yearin which such termination occurs, pro rated for the portion of the yearpreceding the date of termination; and reimbursement of expenses incurredthrough the date of termination.  Inaddition, Adams shall be entitled to continue to receive, as a severancebenefit, payment of his base compensation (at the highest annual rate in effectduring the Term of this Agreement) for the remainder of the Term of thisAgreement.  In the event Adams isterminated or chooses to terminate his duties under this Section 5.02(b), theCompany must pay all the sums due and owing to him immediately, after anadjustment is made for the acceleration of such payment by the use of adiscounted present value rate of eight percent (8.00%).

(c)           Termination byCompany for Cause or by Adams without Good Reason. If Adams’s duties underthis Agreement are terminated by the Company for Cause pursuant to Section5.01(d), or by Adams without Good Reason pursuant to Section 5.01(e)(ii), Adamsshall be entitled to payment of compensation earned through the date oftermination; payment of any bonus or other incentive compensation for the yearin which such termination occurs, pro rated for the portion of the yearpreceding the date of termination; and reimbursement of expenses incurredthrough the date of termination. Adams shall not be entitled to receive anycompensation, bonus or other payments or benefits under this Agreement withrespect to any periods after the date of termination by the Company for Causeor by Adams without Good Reason.

5.03.        Definitions.

(a)           Disability.Adams shall be deemed to be “disabled” if the Board of Directors of the Company(excluding Adams, if Adams is a member of the Board of Directors) determines ingood faith that Adams is physically or mentally incapacitated and has beenunable for ninety (90) days in any 360-day period to perform his duties under thisAgreement. In order to assist the Board of Directors in making thatdetermination, Adams shall, as reasonably requested by the Board, (i) makehimself available for medical examinations by a physician chosen by the Board,and (ii) grant the Board and such physician access to all relevant medicalinformation concerning him, arrange to furnish copies of medical records tothem and use his best efforts to cause his own physicians to be available todiscuss his health with the Board and the physician appointed by theBoard.  If Adams disagrees with thefindings of the Board-appointed physician, he may appoint his own physician tomake the relevant determinations as to disability. In the event that thephysician appointed by Adams disagrees with the findings of the Board-appointedphysician, the two physicians shall select a third physician whosedetermination shall be binding.

(b)           Cause.“Cause” shall mean:

(i)            theconviction of Adams by a court of competent jurisdiction for felony criminalconduct; or

 

 

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(ii)           thewillful engaging by Adams in fraud or dishonesty which is demonstrably andmaterially injurious to the Company or its reputation, monetarily or otherwise.

No act, or failureto act, on Adams’s part shall be deemed “willful” unless committed or omittedby Adams in bad faith and without a reasonable belief that his act or failureto act was in the best interest of the Company.

(c)           Good Reason.“Good Reason” shall mean the occurrence, without Adams’s express writtenconsent, of any of the following:

(i)            theassignment to Adams of any duties inconsistent with Adams’s status or positionwith the Company;

(ii)           areduction by the Company in Adams’s monthly base compensation;

(iii)          amerger, reverse merger, consolidation, reorganization, recapitalization,business combination or other transaction pursuant to which the Company and/orsubstantially all of its assets acquires, or is (are) acquired by, or combinedwith, a third party or third parties or an event or transaction in which eitheror both the Control Share Acquisition section (Section 302A.671) of theMinnesota Business Corporation Act or its successor section or the BusinessCombination section (Section 302A.673) of the Minnesota Business Corporation Actor its successor section is implicated or invoked;

(iv)          theinvoluntary removal by the shareholders of all or a majority of the presentlyserving Board of Directors of the Company pursuant to action taken at aregularly scheduled shareholders meeting or a special shareholders meeting;

(v)           thetaking of any action by the Company which would directly or indirectlymaterially reduce any of the other benefits described in Sections 4.03 and 4.04and which remains uncured after thirty (30) days following the delivery ofAdams’s written notice of such breach to the Company; or

(vi)          anymaterial violation of this Agreement by the Company which remains uncured afterthirty (30) days following the delivery of Adams’s written notice of suchbreach to the Company.

6.             Miscellaneous

6.01.        Idemnification. The Company willpay on behalf of Adams, and his executors, administrators or assigns, anyamount which he is or becomes legally obligated to pay because of any claim orclaims made against him because of any act or omission or neglect or breach ofduty, including any actual or alleged error or misstatement or misleadingstatement, which he commits or suffers while acting in his capacity as a memberof Special Acquisition/Investment Committee of the Company.  The payments which the Company will be 

 

 

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obligated to makehereunder shall include, inter alia, damages, judgments, settlements and costs,cost of investigation (excluding salaries of officers or employees of the Company)and costs of defense of legal actions, claims or proceedings and appealstherefrom, and costs of attachment or similar bonds; provided, however, thatthe Company shall not be obligated to pay fines or other obligations or feesimposed by law or otherwise which it is prohibited by applicable law frompaying as indemnity or for any other reason. If a claim under this Agreement is not paid by the Company, or on itsbehalf, within ninety (90) days after a written claim has been received by theCompany, the claimant may at any time thereafter bring suit against the Companyto recover the unpaid amount of the claim and if successful in whole or inpart, the claimant shall be entitled to be paid also the expense of prosecutingsuch claim.  Costs and expenses (includingattorneys’ fees) incurred by Adams in defending or investigating any action,suit, proceeding or investigation shall be paid by the Company in advance ofthe final disposition of such matter.

 

6.02.        Assignment. Neither party maytransfer or assign any rights or delegate any obligations hereunder, in wholeor in part, whether voluntarily or by operation of law, without the priorwritten consent of the other party. Any purported transfer, assignment ordelegation by either party without compliance with this Section 6.02 will benull and void and of no force or effect. This Agreement shall be binding uponand inure to the benefit of the parties’ successors and lawful assigns.

6.03.        Severability. Whenever possible,each provision of this Agreement will be interpreted in such manner as to beeffective and valid under applicable law, but if any provision of thisAgreement is held to be prohibited by or unenforceable or invalid underapplicable law, such provision will be ineffective only to the extent of suchprohibition or invalidity, without invalidating the remainder of such provisionor the remaining provisions of this Agreement.

6.04.        Complete Agreement. ThisAgreement and the agreements referenced herein and therein, contain thecomplete agreement between the parties with respect to the subject matterhereof and thereof, and supersede any prior understandings, agreements orrepresentations by or between the parties, written or oral, which may haverelated to the subject matter hereof or thereof in any way.

6.05.        Counterparts. This Agreement maybe executed in one or more counterparts, any one of which need not contain thesignatures of more than one party, but all such counterparts taken together,when delivered, will constitute one and the same instrument.

6.06.        Governing Law; Choice of Forum.The internal law, without regard to conflicts of laws principles, of the Stateof Minnesota will govern all questions concerning the construction, validityand interpretation of this Agreement and the performance of the obligationsimposed by this Agreement. Any and every legal proceeding arising out of or inconnection with this Agreement shall be brought in the appropriate courts ofthe State of Minnesota, and each of the parties hereto consents to the exclusivejurisdiction of such courts.

6.07.        NoWaiver. No term or condition of this Agreement shall be deemed to have beenwaived, nor shall there by any estoppel to enforce any provisions of thisAgreement, except by a statement in writing signed by the party against whomenforcement of the waiver or estoppel is sought. Any written waiver shall notbe deemed a continuing waiver unless 

 

 

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specifically stated,shall operate only as to the specific term or condition waived and shall notconstitute a waiver of such term or condition for the future or as to any actother than that specifically waived.

 

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IN WITNESSWHEREOF, the parties hereto have caused this Agreement to be executed as of theday and year first above written.
|   | EDWARD S. ADAMS:                               |
|--------|------------------------------------------------|
|   |                                           |
|   | /s/ Edward S.  Adams                           |
|   | Edward S. Adams                                |
|   |                                           |
|   | COMPANY:                                       |
|   |                                           |
|   | VirtualFund.com, Inc., a Minnesota corporation |
|   |                                           |
|   | By:                                            | /s/ John  Cavanaugh |
|   | Its:                                           | Director |

 

 

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