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**Exhibit10.23**

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**SPECIALCOMMITTEE COMPENSATION AGREEMENT**

 

                This Agreement (“Agreement”), dated July 1, 2001, isentered into by and between Timothy R. Duoos, a Minnesota resident (“Duoos”),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 Duoos for the Company as a member of the Special Acquisition/InvestmentCommittee, whether or not Duoos is on the Board of Directors of the Company,and Duoos 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 Duoos as a member of the Special Acquisition/Investment Committee andDuoos hereby accepts his position on such Special Acquisition/InvestmentCommittee on the terms and conditions set forth in this Agreement. Duoos 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, Duoos 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. Duoosshall 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. Duoos 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 Duoos 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 Duoos, including withoutlimitation the compensation and benefits provided in Section 4 of thisAgreement, shall commence as of the date first above written.

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

4.             Compensation and Benefits.

4.01.        Base Compensation. During theTerm of this Agreement, the Company shall pay to Duoos base compensation at therate of not less than $21,667 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.Duoos’s base compensation shall be reviewed annually and may be increased (butnot decreased).

4.02.        StockOptions.  The Company shall grant toDuoos, 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, Duoos 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 Duoos 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. Duoos’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 Duoosas provided for in Section 5.02:

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

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

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

(d)           Termination bythe Company for Cause. The Company may terminate Duoos’s duties under thisAgreement for Cause, as defined in Section 5.03, effective immediately upondelivery to Duoos of written notice of such termination; provided, however,that Duoos shall not be terminated for Cause unless and until the Company shallhave delivered to Duoos 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 Duoos and an opportunity for Duoos, together with Duoos’scounsel, to be heard by said Board), finding that, in the good faith opinion ofsaid Board, Duoos’s conduct constitutes Cause for termination and specifyingthe particulars thereof in detail.

(e)           Termination byDuoos. Duoos 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 Duoos’sdeath or disability, Duoos 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. Duoos 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 Duoos for Good Reason. If Duoos’s duties underthis Agreement are terminated by the Company without Cause pursuant to Section5.01(c) or by Duoos for Good Reason pursuant to Section 

 

 

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5.01(e)(i), Duoosshall 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, Duoos 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 Duoos 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 Duoos without Good Reason. If Duoos’s duties underthis Agreement are terminated by the Company for Cause pursuant to Section5.01(d), or by Duoos without Good Reason pursuant to Section 5.01(e)(ii), Duoosshall 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. Duoos 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 Duoos without Good Reason.

5.03.        Definitions.

(a)           Disability.Duoos shall be deemed to be “disabled” if the Board of Directors of the Company(excluding Duoos, if Duoos is a member of the Board of Directors) determines ingood faith that Duoos 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, Duoos 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 Duoos 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 Duoos 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 Duoos by a court of competent jurisdiction for felony criminalconduct; or

 

 

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

No act, or failureto act, on Duoos’s part shall be deemed “willful” unless committed or omittedby Duoos 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 Duoos’s express writtenconsent, of any of the following:

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

(ii)           areduction by the Company in Duoos’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 ofDuoos’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 Duoos’s written notice of suchbreach to the Company.

6.             Miscellaneous

6.01.        Idemnification. The Company willpay on behalf of Duoos, 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(including attorneys’ fees) incurred by Duoos in defending or investigating anyaction, suit, proceeding or investigation shall be paid by the Company inadvance of the 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.
|   | TIMOTHY R. DUOOS:                              |
|--------|------------------------------------------------|
|   |                                           |
|   | /s/ Timothy R.  Duoos                          |
|   | Timothy R. Duoos                               |
|   |                                           |
|   | COMPANY:                                       |
|   |                                           |
|   | VirtualFund.com, Inc., a Minnesota corporation |
|   |                                           |
|   | By:                                            | /s/ John  Cavanaugh |
|   | Its:                                           | Director |

 

 

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