Exhibit 10.4 Letter Agreement dated December 3, 2003, between Sequiam
Corporation and The Research Works, Inc.
================================================================================
THE RESEARCH WORKS, INC.
000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxxxx 00000
Telephone: (000) 000-0000 Web: xxx.xxxxxxxxxxxxxx.xxx
================================================================================
December 3, 2003
Xx. Xxxxxxxx X. XxxxxxXxxxxx
Chief Executive Officer
Sequiam Corporation
000 Xxxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Dear Xx. XxxxxxXxxxxx:
This letter agreement (the "AGREEMENT") will confirm our understanding regarding
the engagement of THE RESEARCH WORKS, INC. ("RW"), a New Jersey corporation, to
provide equity research services to SEQUIAM CORPORATION ("CLIENT") a California
corporation.
Whereas RW is an independent research firm that provides research services with
respect to the securities of its clients, and whereas Client has publicly traded
securities and desires RW to provide equity research services with respect to
its common stock, in consideration of the mutual covenants herein contained and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, RW and Client hereby agree as follows:
1. Term. The term of this Agreement ("TERM") shall commence on the date
-----
of your signing of this Agreement and shall continue through the one-year
anniversary of the release of the first RW equity research report on the
Client ("END OF THE FULL TERM"), unless either party terminates this
Agreement, with or without cause, at an earlier date ("EARLY TERMINATION
DATE") upon delivery of written notice to the other party at the address
set forth hereinbelow.
2. RW Services. RW shall prepare an equity research report on Client
------------
("REPORT") in substantially the same form as samples of RW's research
reports presently displayed at RW's Web site (xxx.xxxxxxxxxxxxxx.xxx).
Client shall have no editorial control over the opinions expressed in the
Report, and RW shall not supply a draft copy of the Report to Client.
RW shall complete and post a copy of the finished Report at its Web site
within four (4) weeks of the date of this Agreement and shall update the Report
on its Web site on approximately a monthly basis for the remainder of the Term.
Client may make suggestions for changes regarding the factual content of the
Report at any time after the initial Report is posted on RW's Web site, but RW
is under
xv
no obligation to accept such proposed changes, and RW retains exclusive control
over the opinions expressed in the Report.
Following the initial posting of the Report on its Web site, RW shall print
and distribute the Report at its own expense to individual and institutional
investors whom RW believes have an interest in small-capitalization stocks. The
date of such printing and distribution shall be at RW's sole discretion. RW
shall also mail 100 copies of the Report to Client, and Client shall have
permission to duplicate the Report at its own expense or to purchase additional
original copies from RW for a nominal fee.
3. Fee. In consideration of RW's services, the Client shall pay to RW a
---
fee ("FEE") consisting of that number of shares of Client's common stock
that is equal to eighty thousand dollars ($80,000) divided by the average
of the closing (last trade) prices of Client's common stock on the five
trading days preceding January 22, 2004and is due and payable on that date.
The shares shall be issued in certificate form for The Research Works, Inc.
(000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000; tax # 00-0000000).
RW acknowledges that the common shares issued pursuant to this Agreement
(a) have not been registered under the Securities Act of 1933, as amended
(the "ACT"), (b) cannot be offered or sold except pursuant to a
registration statement under the Act or an exemption from registration
under the Act, and (c) are being acquired for investment and not with a
view to the distribution thereof. RW represents that it is an "accredited
investor" as such term is defined by Rule 501(a) of Regulation D and also
acknowledges that its officers and directors are capable of evaluating the
merits and risks of an investment in Client's common shares.
Should the Client terminate this Agreement prior to the End of the Full
Term for any reason other than RW's failure to perform in accordance with
the terms set forth in this Agreement, then no portion of the Fee shall be
refunded to the Client, except, however, that the Client may cancel this
Agreement without penalty within five (5) business days of Client's
entering into this Agreement, provided that the Client provides RW with
written notice of such cancellation in accordance with the terms of
Paragraph 6 of this Agreement.
The Client agrees to piggy-back the registration of the shares issued
pursuant to this Agreement onto the first registration statement filed
subsequent to the date on which the Client signs this Agreement.
Should the Client terminate this Agreement prior to the End of the Full
Term for RW's failure to perform in accordance with the terms set forth in
this Agreement, then a percentage of the Fee shall be refunded to the
Client; this percentage is the product of 50% times the result of the
division of the number of days from the Early Termination Date until the
End of the Full Term by the number of days from the commencement of the
Term until the End of the Full Term.
xvi
Notwithstanding the foregoing, Client shall recover the entire Fee from RW
if Client terminates this Agreement based on RW's failure to release the
initial Report in accordance with the time and manner mandated by Paragraph
2.
Should RW terminate this Agreement prior to the End of the Full Term, then
a percentage of the Fee shall be refunded to the Client; this percentage
shall be the product of 50% times the result of the division of the number
of days from the Early Termination Date until the End of the Full Term by
the number of days from the commencement of the Term until the End of the
Full Term.
Notwithstanding the foregoing, RW shall refund the entire Fee to Client if
RW terminates this Agreement prior to the release of the initial Report for
any reason other than Client's failure to perform in accordance with the
terms set forth in this Agreement.
4. Client's Representations and Covenants. Client represents and covenants
--------------------------------------
that:
(a) it will not use the Report in connection with any offering without the
prior written consent of RW;
(b) it and its principals will keep confidential their knowledge of the
pending release of the Report;
(c) it will distribute the Report only in its entirety and in conformity
with all securities laws;
(d) it will cease any distribution of the Report when facts or management's
expectations are materially different from those presented or estimated in
such Report;
(e) it has received a copy of RW's brochure and Part II of RW's ADV
application, both of which are available for viewing at RW's web site
(xxx.xxxxxxxxxxxxxx.xxx); and
(f) it will indemnify and hold RW and its officers, employees and
independent contractors harmless from and against any loss, damage,
liability, or expense (including reasonable attorneys' fees and other costs
of litigation, regardless of outcome) arising out of or in connection with
(i) any breach of the representations and covenants made by Client in this
Xxxxxxxxx 0, (xx) false or misleading information provided to RW by Client,
or (iii) claims relating to the purchase and/or sale of Clients' securities
arising from RW's relationship with Client. Such indemnifications shall
continue for a period of five (5) years beyond the end of the Term.
5. Arbitration. Any dispute between RW and Client, either during or after the
------------
Term, shall be subject to binding arbitration before a three-arbitrator
panel in accordance with the rules of the American Arbitration Association.
Prior to the selection of the arbitrators of the binding arbitration, the
parties shall first attempt non-binding mediation before a mediator
selected by said Association. Each party shall bear its own costs relating
to such mediation, including attorney's fees and expenses. In the event the
parties are unable to resolve the dispute
xvii
through mediation and the arbitrators reach a decision in favor of one of
the parties then the other party shall be responsible for all costs of the
first party relating to the arbitration, including attorney's fees and
expenses, subject however to the discretion of the arbitrators to
reallocate these costs if cause is so found by the arbitrators. Unless
another location is mutually agreed upon by both parties, the mediation and
arbitration are to take place in the State of New Jersey.
6. Notices. Notices to RW are to be delivered to Xxxxxxx X. Xxxxxx at the
--------
address in this letterhead. Notices to the Client are to be delivered to
the individual to whom this letter is directed, at the inside address of
this letter. The parties to this Agreement may change these addresses by
giving written notice.
7. Impaired provision. If any provision of this Agreement is held invalid,
-------------------
illegal or unenforceable in any respect (an "IMPAIRED PROVISION"),
(a) such Impaired Provision shall be interpreted in such a manner as to
preserve, to the maximum extent possible, the intent of the parties,
(b) the validity, legality and enforceability of the remaining provisions
shall not in any way be affected or impaired thereby, and
(c) such decision shall not affect the validity, legality or enforceability
of such Impaired Provision under other circumstances. The parties agree to
negotiate in good faith and agree upon a provision to substitute for the
Impaired Provision in the circumstances in which the Impaired Provision is
invalid, illegal or unenforceable.
8. Entire agreement. This Agreement sets forth the entire understanding of
-----------------
the parties hereto with respect to the subject matter hereof and shall not
be modified, except by a written document signed by the parties.
9. Paragraph headings. The paragraph headings used in this Agreement are
-------------------
included solely for convenience and shall not affect or be used in
connection with the interpretation of this Agreement.
10. Governing law. This Agreement shall be governed by and construed in
--------------
accordance with the laws of the State of New Jersey without regard to the
principles of conflict of laws.
11. Facsimile copies. Duly executed facsimile copies are fully binding under
-----------------
any and all applicable laws.
(The remainder of this page is left blank intentionally.)
xviii
Please confirm your agreement with the foregoing by signing and returning one
copy of this letter to the undersigned whereupon this letter shall become a
binding Agreement. The offer to enter into this Agreement shall expire 14 days
from the date of this letter.
Very truly yours,
THE RESEARCH WORKS, INC.
By:
-------------------------------------
Xxxxxxx X. Xxxxxx
President
AGREED TO AS OF THE DATE BELOW:
SEQUIAM CORPORATION
By:
-------------------------------------
Xxxx X. Xxxxxxxxxxx
Chief Financial Officer
Date:
-------------------------------------
xix
