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EXHIBIT 4.12
CONSULTING AGREEMENT
This Consulting Agreement (the "Agreement"), effective as of May 30, 1996 is
entered into by and between POLLUTION RESEARCH AND CONTROL CORP., a California
corporation (herein referred to as the "Company") and LIVIAKIS FINANCIAL
COMMUNICATIONS, INC., a California corporation (herein referred to as the
"Consultant").
RECITALS
WHEREAS, Company is a publicly held corporation with its common stock
traded on the NASDAQ; and
WHEREAS, Consultant has experience in the area of corporate finance,
investor communications and financial and investor public relations; and
WHEREAS, Company desires to engage the services of Consultant to
assist and consult to the Company in matters concerning corporate finance and
to represent the Company in investors' communications and public relations with
existing shareholders and brokers, dealers and other investment professionals
as to the Company's current and proposed activities;
NOW THEREFORE, in consideration of the promises and the mutual
covenants and agreements hereinafter set forth, the parties hereto covenant and
agree as follows:
1. Term of Consultancy. Company hereby agrees to retain the Consultant to
act in a consulting capacity to the Company, and the Consultant hereby agrees
to provide services to the Company, for a term of twelve (12) months
commencing on May 30, 1996 and ending on May 29, 1997.
2. Duties of Consultant. The Consultant agrees to provide the following
specified consulting services through its officers and employees during the
term specified in Section 1.
(a) Advise and assist the Company in developing and implementing
appropriate plans and materials for presenting the Company and its business
plans, strategy and personnel to the financial community, establishing an image
for the Company in the financial community, and creating the foundation for
subsequent financial public relations efforts;
(b) Introduce the Company to the financial community;
(c) With the cooperation of the Company, maintain an awareness
during the term of this Agreement of the Company's plans, strategy and
personnel, as they may evolve during such period, and advise and assist the
Company in communicating appropriate information regarding such plans,
strategy and personnel to the financial community;
(d) Assist and advise the Company with respect to its (i)
corporate finance activities, (ii) stockholder and investor relations, (iii)
relations with brokers, dealers, analysts and other investment professionals,
and (iv) financial public relations generally;
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(e) Perform the functions generally assigned to
investor/stockholder relations and public relations departments in major
corporations, including responding to telephone and written inquiries (which
may be referred to the Consultant by the Company); preparing or reviewing press
releases, reports and other communications with or to shareholders, the
investment community and the general public; advising with respect to the
timing, form, distribution and other matters related to such releases, reports
and communications; and consulting with respect to corporate symbols, logos,
names, the presentation of such symbols, logos and names, and other matters
relating to corporate image;
(f) Disseminate information regarding the Company to shareholders,
brokers, dealers, other investment community professionals and the general
investment public;
(g) Conduct meetings, in person or by telephone, with brokers,
dealers, analysts and other investment professionals to advise them of the
Company's plans, goals and activities, and assist the Company in preparing for
press conferences and other forums involving the media, investment community
professionals and the general investment public;
(h) At the Company's request, review business plans, strategies,
mission statements, budgets, proposed transactions and other plans for the
purpose of advising the Company of the investment community implications
thereof;
(i) Otherwise perform as the Company's financial relations and
public relations consultant; and,
(j) Make public communications and disclosures regarding the
Company only within the scope of the authorizations conferred by the Company
and not make any such communications or disclosures of information not provided
or authorized by the Company.
3. Allocation of Time and Energies. The Consultant
hereby promises to perform and discharge well and faithfully the
responsibilities which may be assigned to the Consultant from time to time by
the officers and duly authorized representatives of the Company in connection
with the conduct of its financial and investor public relations and
communications activities, so long as such activities are in compliance with
applicable securities laws and regulations. Consultant shall diligently and
thoroughly provide the consulting services required hereunder. Although no
specific hours-per-day requirement will be required, Consultant and the Company
agree that Consultant will perform the duties set forth hereinabove in a
diligent and professional manner. At the request of the Company, the
Consultant will inform the Company of its specific activities concerning the
Company. The parties acknowledge and agree that a disproportionately large
amount of the effort to be expended and the costs to be incurred by the
Consultant and the benefits to be received by the Company are expected to occur
upon and shortly after, and in any event, within four or five months of the
effectiveness of this Agreement.
4. Remuneration. As full and complete compensation for
services described in this Agreement, the Company shall compensate Consultant
as follows:
4.1 For undertaking this engagement and for other good and valuable
consideration, the Company agrees to issue and deliver to the
Consultant a "Commencement Bonus" payable in the form of 2,000,000
options (the "Options") entitling the Consultant the right to purchase
shares of the Company's Common Stock. The form and content of the
Option Agreements are attached hereto and by reference incorporated
herein as Exhibit "A" and
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will be acceptable to both the Company and the Consultant. Among
other things, the Options will contain the following terms and
conditions:
1. 1,000,000 of the Options will be exercisable at a
price of ninety-four Cents ($.94); 500,000 of the
Options will be exercisable at a price of One Dollar
and twenty five Cents ($1.25); and, 500,000 of the
Options will be exercisable at a price of Two Dollars
($2.00);
2. the Options will be exercisable any time after
November 30, 1996 and for the remainder of the four
year period;
3. the Options will contain no call and/or redemption
provisions;
4. the shares of common stock issuable upon the exercise
of the Options will be included in the next
appropriate registration done by the Company, which
shall be no later than November 30, 1996. All
registration costs shall be borne solely by the
Company.
This Commencement Bonus shall be issued to the Consultant
promptly following execution of this Agreement and shall, when issued
and delivered to Consultant, be fully paid and non-assessable. The
Company understands and agrees that Consultant has foregone
significant opportunities to accept this engagement and that the
Company derives substantial benefit from the execution of this
Agreement and the ability to announce its relationship with
Consultant. The 2,000,000 Options issued as a Commencement Bonus,
therefore, constitute payment for Consultant's agreement to represent
the Company and are a nonrefundable, non-apportionable, and non-
ratable retainer; such Options are not a prepayment for future
services. Seventy-five percent (75%) of each of the various Options
issued pursuant to this Agreement shall be evidenced by option
agreements issued in the name of Liviakis Financial Communications,
Inc. and twenty-five percent (25%) of each of the various Options
issued pursuant to this Agreement shall be evidenced by option
agreements issued in the name of Xxxxxx X. Xxxx ("Prag").
4.2 Consultant and Prag (hereinafter referred to as "Consultants")
acknowledge that both the Options and the shares issuable upon the
exercise of the Options to be issued pursuant to this Agreement (the
"Shares") have not been registered under the Securities Act of 1933,
and accordingly are "restricted securities" within the meaning of
Rule 144 of the Act. As such, the Options and the Shares may not be
resold or transferred unless the Company has received an opinion of
counsel reasonably satisfactory to the Company that such resale or
transfer is exempt from the registration requirements of that Act.
4.3 In connection with the acquisition of Options hereunder, the
Consultants represent and warrant to the Company as follows:
(a) Consultants acknowledge that the Consultants have been
afforded the opportunity to ask questions of and receive answers from
duly authorized officers or other
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representatives of the Company concerning an investment in the shares,
and any additional information which the Consultants have requested.
(b) Consultants' investment in restricted securities is reasonable
in relation to the Consultants' net worth, which is in excess of ten
(10) times the Consultants' cost basis in the shares. Consultants have
had experience in investments in restricted and publicly traded
securities, and Consultants have had experience in investments in
speculative securities and other investments which involve the risk of
loss of investment. Consultants acknowledge that an investment in the
Options is speculative and involves the risk of loss. Consultants have
the requisite knowledge to assess the relative merits and risks of this
investment without the necessity of relying upon other advisors, and
Consultants can afford the risk of loss of their entire investment in
the Options. Consultants are (i) accredited investors, as that term is
defined in Regulation D promulgated under the Securities Act of 1933,
and (ii) a purchaser described in Section 25102 (f) (2) of the
California Corporate Securities Law of 1968, as amended.
(c) Consultants are acquiring the Options for the Consultants' own
account for long-term investment and not with a view toward resale or
distribution thereof except in accordance with applicable securities
laws.
5. Expenses. Consultant agrees to pay for all its expenses (phone,
mailing, labor, etc.), other than extraordinary items (travel required by/or
specifically requested by the Company, luncheons or dinners to large groups of
investment professionals, mass faxing to a sizable percentage of the Company's
constituents, investor conference calls, etc.) approved by the Company prior to
its incurring an obligation for reimbursement.
6. Indemnification. The Company warrants and represents that all oral
communications, written documents or materials, other than those designated by
the Company to the Consultant as "confidential" or "Company private", furnished
to Consultant by the Company with respect to financial affairs, operations,
profitability and strategic planning of the Company are accurate and Consultant
may rely upon the accuracy thereof without independent investigation. The
Company will protect, indemnify and hold harmless Consultant against any claims
or litigation including any damages, liability, cost and reasonable attorney's
fees with respect thereto resulting from Consultant's communication or
dissemination of any said information, documents or materials not designated by
the Company to the Consultant as "confidential" or "Company private", excluding,
any such claims or litigation resulting from Consultant's communication or
dissemination of information not provided or authorized by the Company. To the
extent feasible, the Company agrees to make Consultant an additional insured on
any and all commercial liability and directors and officers liability insurance
policies and to provide Consultant with current Certificates of Insurance
reflecting, the same.
7. Representations. Consultant represents that it is not required to
maintain any licenses and registrations under federal or any state regulations
necessary to perform the services set forth herein. Consultant acknowledges
that, to the best of its knowledge, the performance of the services set forth
under this Agreement will not violate any rule or provision of any regulatory
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agency having jurisdiction over Consultant. Consultant acknowledges that, to
the best of his knowledge, Consultant is not the subject of any investigation,
claim, decree or judgment involving any violation of the SEC or securities
laws. Consultant further acknowledges that it is not a securities Broker
Dealer or a registered investment advisor.
8. Legal Representation. The Company acknowledges that it has been
represented by independent legal counsel in the preparation of this Agreement.
Consultant represents that it has consulted with independent legal counsel
and/or tax, financial and business advisors, to the extent the Consultant
deemed necessary.
9. Status as Independent Contractor. Consultant's engagement pursuant
to this Agreement shall be as independent contractor, and not as an employee,
officer or other agent of the Company. Neither party to this Agreement shall
represent or hold itself out to be the employer or employee of the other.
Consultant further acknowledges the consideration provided hereinabove is a
gross amount of consideration and that the Company will not withhold from such
consideration any amounts as to income taxes, social security payments or any
other payroll taxes. All such income taxes and other such payment shall be
made or provided for by Consultant and the Company shall have no responsibility
or duties regarding such matters. Neither the Company or the Consultant
possess the authority to bind each other in any agreements without the express
written consent of the entity to be bound.
10. Attorney's Fee. If any legal action or any arbitration or other
proceeding is brought for the enforcement or interpretation of this Agreement,
or because of an alleged dispute, breach, default or misrepresentation in
connection with or related to this Agreement, the successful or prevailing
party shall be entitled to recover reasonable attorneys' fees and other costs
in connection with that action or proceeding, in addition to any other relief
to which it or they may be entitled.
11. Waiver. The waiver by either party of a breach of any provision of
this Agreement by the other party shall not operate or be construed as
a waiver of any subsequent breach by such other party.
12. Notices. All notices, requests, and other communications hereunder
shall be deemed to be duly given if sent by U.S. mail, postage prepaid,
addressed to the other party at the address as set forth herein below:
To the Company: Xx. Xxxxxx X. Xxxxxxxx
Chairman & CEO
Pollution Research and Control Corp.
000 Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
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To the Consultant: Liviakis Financial Communications, Inc.
Xxxx X. Xxxxxxxx, President
0000 "X" Xxxxxx; Xxxxx X
Xxxxxxxxxx, Xxxxxxxxxx 00000
It is understood that either party may change the address to which
notices for it shall be addressed by providing notice of such change to the
other party in the manner set forth in this paragraph.
13. Choice of Law, Jurisdiction and Venue. This Agreement shall be
governed by, construed and enforced in accordance with the laws of the State of
California. The parties agree that Sacramento County, CA. will be the venue of
any dispute and will have jurisdiction over all parties.
14. Arbitration. Any controversy or claim arising out of or relating to
this Agreement, or the alleged breach thereof, or relating to Consultant's
activities or remuneration under this Agreement, shall be settled by binding
arbitration in California, in accordance with the applicable rules of the
American Arbitration Association, and judgment on the award rendered by the
arbitrator(s) shall be binding on the parties and may be entered in any court
having jurisdiction thereof. The provisions of Title 9 of Part 3 of the
California Code of Civil Procedure, including section 1283.05, and successor
statutes, permitting expanded discovery proceedings shall be applicable to all
disputes that are arbitrated under this paragraph.
15. Complete Agreement. This Agreement instrument contains the entire
agreement of the parties relating to the subject matter hereof. This Agreement
and its terms may not be changed orally but only by an agreement in writing
signed by the party against whom enforcement of any waiver, change,
modification, extension or discharge is sought.
AGREED TO:
"Company" POLLUTION RESEARCH AND CONTROL CORP.
Date: 5/31/96 By: /s/ XXXXXX X. XXXXXXXX
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Xx. Xxxxxx X. Xxxxxxxx
Chairman & CEO
"Consultant" LIVIAKIS FINANCIAL COMMUNICATIONS, INC.
Date: 5/31/96 By: /s/ XXXX X. XXXXXXXX /s/ XXXXXX X. XXXX
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Xxxx X. Xxxxxxxx Xxxxxx X. Xxxx
President Sr. Vice President
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