EXHIBIT 10.13
-------------
CONSULTING AGREEMENT
THIS AGREEMENT IS among DYNAGEN, INC., a corporation organized under
laws of the State of Delaware, whose address is 000 Xxxxxxxx Xxxxx, Xxxxxxxxx.
XX 00000 (hereinafter referred to as the "Company"); INVESTOR RELATIONS
SERVICES. INC., of 000 Xxxxx Xxxxxxxx, Xxx Xxxxxx Xxxxx, Xxxxxxx 00000
(hereinafter referred to as the "Consultant"); and INFUSION CAPITAL INVESTMENT
CORPORATION, a North Carolina corporation with its principal office at 000 Xxxxx
Xxxxxx, Xxxxxxx-Xxxxx, Xxxxx Xxxxxxxx, as the Financing Agent Or the Consultant
(hereinafter referred to as "ICIC").
WHEREAS, the Consultant is in the business of assisting public
companies in financial advisory, strategic business planning, and investor and
public relations services designed to make the investing public knowledgeable
about the benefits of stock ownership in the Company; and
WHEREAS, the Consultant may, during the period of time covered by this
Agreement, present to the Company one or more plans of public and investor
relations to utilize other business entities to achieve the Company's goals of
making the investing public knowledgeable about the benefits of stock ownership
in the Company; and
WHEREAS, the Consultant confirms that he is not in the business of
stock brokerage, investment advice, activities which require registration under
either the Securities Act of 1933 (hereinafter "the Act") or the Securities and
Exchange Act of 1934 (hereinafter "the Exchange Act"), underwriting, banking, is
not an insurance company, nor does it offer services to the Company which may
require regulation under federal or state securities laws; and
WHEREAS, the parties agree, alter having an understanding of the
services desired and the services to be provided, that the Company desires to
retain Consultant to provide such assistance through its services for the
Company, and the Consultant is willing to provide such services to the Company;
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, the receipt and sufficiency of which is hereby acknowledged,
the parties agree as follows:
1. DUTIES AND INVOLVEMENT.
The Company hereby engages Consultant to provide a plan, and for
coordination in executing the agreed-upon plan, for using various investor and
public relations services as agreed by both parties. The plan may include, but
not by way of limitation, the following services: consulting with the Company
management concerning marketing surveys, investor accreditation, availability to
expand investor base, investor support, strategic business planning, broker
relations, conducting due diligence meetings, attendance at conventions and
trade shows, assistance in the preparation and dissemination of press releases
and stockholder communications. consulting on mergers with companies, review and
assistance in updating a business plan, review and advise on the capital
structure for the Company, propose legal counsel, assist in the development of
an acquisition profile and structure, recommend financing alternatives and
Page 1
sources, and consult on corporate finance and/or investment banking issues. In
addition, these services may include production of a corporate profile and fact
sheets, personal consultant services, financial analyst and newsletter
campaigns, conferences, seminars and national tour, including, but not by way of
limitation, due diligence meetings, investor conferences and institutional
conferences, printed media advertising design, newsletter production, broker
solicitation campaigns, electronic public relations campaigns, direct mail
campaigns, placement in investment publications and press releases. (Addendum A)
2. RELATIONSHIP AMONG THE PARTIES.
Consultant acknowledges that it is not an officer, director or agent of
the Company; it is not, and will not, be responsible for any management
decisions on behalf of the Company and may not commit the Company to any action.
The Company represents that the Consultant does not have, through stock
ownership or otherwise, the power to control the Company, nor to exercise any
dominating influence over its management.
Consultant understands and acknowledges that this Agreement shall not
create or imply any agency relationship among the parties; and Consultant will
not commit Company in any manner except when a commitment has been specifically
authorized in writing by the Company.
The Company and Consultant agree that the relationship among the
parties shall be that of independent contractor.
3. EFFECTIVE DATE, TERM AND TERMINATION.
This Agreement shall begin on April 1, 1999, and will continue until
March 31, 2000.
4. OPTION TO RENEW AND EXTEND.
Company may renew this Agreement on the same terms by providing written
notice to Consultant any time prior to the expiration hereof.
5. COMPENSATION AND PAYMENT OF EXPENSES.
The Company agrees to pay to ICIC, or its designee, the total sum of
One Million ($1,000,000) Dollars worth of the shares of common stock of the
Company as total and complete consideration for the services to be provided by
the Consultant to the Company. The stock shall contain a Rule 144 restriction
and shall be delivered to ICIC upon the execution of this agreement. The number
of shares to be issued shall be at the rate of $0.375 a share. It is understood
and contemplated by this Agreement that shares may be assigned by ICIC to one or
more of its subcontractors.
Upon payment of such stock to ICIC, ICIC will arrange for payment on
behalf of the Company to the Consultant for the services to be provided, and
Company shall have no other obligation to Consultant or ICIC for payment,
excepting the obligation for additional compensation as contained herein.
Page 2
Company agrees to pay for all costs and expenses incurred associated
with its own employees' working with Consultant and its representatives,
including lodging, meals and travel as necessary. All other expenses for the
fulfillment of this Agreement, as contained in Addendum A, shall be borne by the
Consultant, and by third parties engaged by it in connection with the
performance of the financial and public relations services provided for herein.
If required by federal law or regulation, ICIC will take necessary
steps to prepare and file any necessary forms to comply with the transfer of the
shares of stock from Company to ICIC, including, if required, form 13(d).
6. SERVICES NOT EXCLUSIVE.
Consultant shall devote such of its time and effort necessary to the
discharge of its duties hereunder. The Company acknowledges that Consultant is
engaged in other business activities, and that it will continue such activities
during the term of this Agreement. Consultant shall not be restricted from
engaging in other business activities during the term of this Agreement.
7. CONFIDENTIALITY.
Consultant acknowledges that it may have access to confidential
information regarding the Company and its business. Consultant agrees that it
will not, during or subsequent to the term of this Agreement, divulge, furnish,
or make accessible to any person (other than with the written permission of the
Company) any knowledge or information or plans of the Company with respect to
the Company or its business, including, but not by way of limitation, the
products of the Company, whether in the concept or development stage; or being
marketed by the Company on the effective date of this Agreement or during the
term hereof. Consultant has entered into a separate confidentiality Agreement
with the Company which will govern all confidentiality issues during the term of
the Confidentiality Agreement.
8. COVENANT NOT TO COMPETE.
During the term of this Agreement, Consultant warrants, represents and
agrees that it will not directly participate in the information developed for
and by the Company, and will not compete directly with the Company in the
Company's primary industry or related fields.
9. INVESTMENT REPRESENTATION.
The Company represents and warrants that it has provided ICIC with
access to all publicly available information on the Company concerning its
condition, financial and otherwise, its management, its business and its
prospects. The Company represents that it has provided ICIC with all copies of
the Company's filings for the prior twelve (12) months made under the rules and
regulations promulgated under the Act, as amended, if any, (the "Disclosure
Documents") or the "Exchange Act". Consultant and ICIC acknowledge that the
acquisition of securities to be issued to Consultant involves a high degree of
risk. ICIC represents that it and its advisors have been afforded the
opportunity to discuss the Company with its management. The Company represents
Page 3
that it has and will continue to provide ICIC with any information or
documentation necessary to verify the accuracy of the information contained in
the Disclosure Documents, and will promptly notify Consultant and ICIC upon the
filing of any Registration Statement or other periodic reporting documents filed
pursuant to the Act or the Exchange Act. This information will include DTC
sheets, which shall be provided to the Consultant no less than every two (2)
weeks.
The Consultant represents that it is not subject to any disciplinary
action by either the National Association of Securities Dealers or the
Securities and Exchange Commission by virtue of any violations of their rules
and regulations.
10. REGULATION S.
The Company agrees that during the term of this Agreement, it will
notify the Consultant, in writing, of the issuance of any common stock pursuant
to Regulation S of the General Regulations of the Securities and Exchange
Commission, or any registration of the Company's securities by means of a Form
S-8 Registration Statement.
11. ASSIGNMENT.
This Agreement may not be assigned by either party hereto without the
written consent of the other, but shall be binding upon the successors of the
parties.
12. ARBITRATION.
If a dispute arises out of, or relates to this Agreement, or the breach
thereof, and if said dispute cannot be settled through direct discussion, the
parties agree to first endeavor to settle the dispute in an amicable manner by
mediation under the Commercial Mediation Rules of the American Arbitration
Association before resorting to arbitration. Thereafter, any unresolved
controversy or claim arising out of, or relating to this Agreement, or a breach
thereof, shall be settled by arbitration in accordance with the Rules of the
American Arbitration Association, and judgment upon the award rendered by the
Arbitrator may be entered in any court having jurisdiction thereof. Any
provisional remedy which would be available from a court of law shall be
available to the parties to this Agreement from the Arbitrator pending
arbitration. The situs of the arbitration shall be Orange County, Florida.
13. INDEMNIFICATION.
(a) Both parties agree to indemnify and hold harmless the other, and
its agents and employees, against any losses, claims, damages or
liabilities, joint or several, to which either party, or any such other
person, may become subject under the Act, the Exchange Act, or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions, suits or proceedings in respect thereof) arise out of, or are
based upon any untrue statement or alleged untrue statement of any
material Act contained in the Registration Statement, any preliminary
prospectus, the prospectus, or any amendment or supplement thereto, or
information provided to brokers or shareholders by the Consultant, or
arise out of, or are based upon the omission, or alleged omission, to
state therein a material fact required to
Page 4
be stated therein, or necessary to make the statements therein not
misleading, and will reimburse the other party, or any such other
person, for any legal or other expenses reasonably incurred by the
other party, or any such other person in connection with investigating
or defending any such loss, claim, damage, liability, or action, suit
or proceeding; provided, however, that the other party will not be
liable in any such case to the extent that any such loss, claim, damage
or liability arises out of, or is based upon an untrue statement or
alleged untrue statement, or omission or alleged omission, from the
Registration Statement, any preliminary prospectus, the prospectus, or
any such amendment or supplement, or information provided to brokers,
or shareholders, by the Consultant in reliance upon, and in conformity
with, written information furnished by one party to the other
specifically for use in the preparation thereof.
(b) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, suit or proceeding, such
indemnified party will, if a claim in respect thereof is to be made
against an indemnifying party under this Section, notify the
indemnifying party of the commencement thereof; but the omission so to
notify the indemnifying party will not relieve it from any liability
which it may otherwise have to any indemnified party other than under
this Section. In case of any such action, suit or proceeding is brought
against any indemnified party, and it notified an indemnifying party of
the commencement thereof, the indemnifying party will be entitled to
participate therein, and, to the extent it may wish, jointly with any
other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party, and after
notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party will
not be liable to such indemnified party under this Section, for any
legal or other expenses subsequently incurred by such indemnified party
in connection with the defense thereof other than reasonable costs of
investigation.
14. REMOVAL OF RESTRICTIVE LEGENDS AND LIQUIDATED DAMAGES
The Company hereby acknowledges that time is of the essence with
respect to registration of the shares, and that in the event the shares are not
available for sale, under Rule 144(d), by April 15, 2000, the Company agrees to
issue either an additional number of shares equal to ten percent (10%) of the
total number of shares issued herein for each additional thirty (30) day delay
in removing any Rule 144 legend, or the cash equivalent of such shares. In the
event of a delay of less than a full thirty (30) day period, the Consultant
shall be entitled to a pro-rata allocation of additional shares.
Consultant understands and acknowledges that the shares of common stock
are being acquired by ICIC for its own account, and not on behalf of any other
person, and are being acquired for investment purposes and not for distribution.
ICIC represents that the common stock which will be a suitable investment for
ICIC, taking into consideration the restrictions on transferability affecting
the common stock.
Page 5
15. "PIGGYBACK REGISTRATION."
If the Company proposes to register any equity securities under the
Securities Act for sale to the public for cash, whether for its own account or
for the account of other security holders, or both, on each such occasion, the
Company will give written notice to ICIC and Consultant no less than fifteen
(15) business days prior to the anticipated filing date, of its intention to so.
Upon the written request of ICIC, received by the Company no later than the
tenth (10th) business day after receipt by ICIC of the notice sent by the
Company, to register, on the same terms and conditions as the securities
otherwise being sold pursuant to such registration, any of its registrable
securities (which request shall state the intended method of disposition
thereof), the Company will cause the registerable securities, as to which
registration shall have been so requested to be included in the securities to be
covered by the Registration Statement proposed to be filed by the Company, on
the same terms and conditions as any similar securities included therein, all to
the extent requisite to permit the sale or other disposition by the Consultant
(in accordance with its written request) of such registerable securities so
registered, provided, however. that the Company may, at any time prior to their
effectiveness of any such Registration Statement, in its sole discretion and
with the consent of ICIC, abandon the proposed offering in which the ICIC had
requested to participate.
16. NOTICES.
All notices required or permitted to be given under this Agreement
shall be given in writing and shall be delivered, either personally or by
express delivery service, to the party to be notified. Notice to each party
shall be deemed to have been duly given upon delivery, personally or by courier
(such as Federal Express or similar express delivery service) addresses to the
attention of the officer at the address set forth beneath the signature line
below, or to such other officer or addresses as either party may designate, upon
at least ten (10) days' notice, to the other party.
17. GOVERNING LAW.
This Agreement shall be construed by and enforced in accordance with
the laws of the State of Delaware.
18. ENTIRE AGREEMENT.
This Agreement contains the entire understanding and agreement among
the parties. There are no other agreements, conditions or representations, oral
or written, expressed or implied, with regard thereto. This Agreement may be
amended only in writing signed by both parties.
19. NON-WAIVER.
A delay or failure by either party to exercise a right under this
Agreement, or a partial or single exercise of that right, shall not constitute a
waiver of that or any other right.
Page 6
20. COUNTERPARTS.
This Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
Agreement.
21. BINDING EFFECT.
The provisions of this Agreement shall be binding upon the parties,
their successors and assigns.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement to be effective as of the day and year provided herein.
COMPANY: CONSULTANT:
DYNAGEN, INC. INVESTOR RELATlONS
SERVICES, INC.
000 Xxxxxxxx Xxxxx 000 Xxxxx Xxxxxxxx
Xxxxxxxxx. XX 00000 Xxx Xxxxxx Xxxxx, XX 00000
Phone: 000-000-0000 Phone: 000-000-0000
By: /s/ Xxxxxxxxx X. Xxxxxxx By: /s Xxxxxxx X. Xxxxxxx
------------------------- ------------------------
Xxxxxxxxx X. Xxxxxxx Xxxxxxx X. Xxxxxxx
Executive Vice President President and CEO
INFUSION CAPITAL
XXXXXXXX XXXXXXXX0000
000 Xxxxx Xxxxxx
Xxxxxxx-Xxxxx, XX
Phone: 000-000-0000
By: /s/ Xxxxxx Xxxxxxxxxxx
-----------------------
Xxxxxx Xxxxxxxxxxx
President
Page 7
ADDENDUM A
CORPORATE PROFILE AND FACT SHEET
A two-page, two color broker fact sheet, and a four-page, full color
Company profile will be created, each highlighting the Company and the benefits
of owning the Company's stock. These pieces are included in broker/dealer
information packages for dissemination to prospective investors, and may also be
targeted to stock analysts and newsletter editors. Consultant's services include
creative writing, art work, layout and design and panting. Materials updated
four times per year, as applicable.
PERSONAL CONSULTANT SERVICES
A Personal Consultant will supervise and actively assist in every facet
of the Company's overall marketing campaign. In addition to coordinating all
above-listed services, the Personal Consultant will maintain daily contact with
investor relations office staff, Company officers and active brokers; he will be
available for consultation 24 hours per day, every day, via cellular telephone,
to address urgent needs as well as general strategic planning. The Personal
Consultant will travel extensively to meet qualified brokers one-on-one, and
will arrange specially scheduled conference calls with audiences of brokers,
analysts and money managers. The Personal Consultant will personally arrange
invitation-only due diligence broker meetings, and will directly supervise all
logistics and follow-up. The cost of the personal Consultant will be paid by the
Consultant.
BROKER SOLICITATION CAMPAIGN
Specialized professional financing public relations services will be
provided through an ongoing telemarketing campaign soliciting new broker
dealers, to generate interest in the Company and its stock. This campaign will
include direct personal telephone follow-up with retail brokers in active
contact with Company executives and investor relations staff. Supervised
in-house personnel will be assigned specifically to guide Company interactions
with brokers and field representatives.
PRESS RELEASES
Company press releases will be written and disseminated to news wire
services. Press releases will also be disseminated to the at-large broker
community by fax and mail, plus telephone and fax follow-up with 500-1,000
active brokers. Press releases may be reproduced in national financial magazines
such as Investor's Business Daily, Xxxxxx'x and Individual Investor.
ADDENDUM A - Page 1
PRINT MEDIA ADVERTISING
An advertisement, targeted to both brokers and investors, will be
created and inserted in a major financial and investment magazine or newspaper
at the Consultants cost. Publications which target and deliver large numbers of
active brokers, qualified investors and other niche groups interested
specifically in the Company's product or industry category will be emphasized.
Consultant's services include creative writing, art work, layout and design, and
coordination of magazine/newspaper inserts.
FINANCIAL ANALYST and NEWSLETTER CAMPAIGN
The Financial Analyst and Newsletter Campaign will be intertwined with
our Broker Solicitation Campaign which provides an essential link to increasing
investor awareness for the Company. Each Company is presented to our carefully
developed network of financial analysts and newsletter publications that
specialize in identifying emerging growth companies and presenting buy
recommendations to their loyal following of investors. Utilization of direct
mail pieces, e-mail, broadcast faxing and phone contacts will ensure effective
and prompt coverage for our clientele. In order to best expose the Company, this
campaign may include personal meetings with editors, analysts and writers for a
number of publications and research houses nationwide.
CONFERENCES, SEMINARS AND NATIONAL TOURS
Due Diligence Meetings: Opportunities for Company exposure before
broker/dealer audiences will be provided in New York, Boston, Chicago, Atlanta,
Orlando, Boca Raton, Denver, San Francisco, southern California and other major
metro areas. Consultant's services include overall meeting coordination and
implementation; room rental, catering (hot ant cold hor d'oeuvres and snacks),
alcoholic and non-alcoholic beverages, broker/dealer invitations (printing, mail
coordination, postage and telephone contact), transportation (coach air fare and
hotel accommodations, as applicable), additional broker meetings and telephone
follow-up.
Investor Conferences: Opportunities for Company exposure before large
audiences of qualified, wealthy investors will be provided in various locations
across North America. These conferences provide executives of participating
companies with unique forums for sharing the spotlight with top financial and
investment experts while making personal contact with wealthy investors and
presenting the benefits of the companies. The most popular package for
conference participants includes an exhibit booth, private workshop, broker
presentation and distribution of collateral materials. Among the most popular
and established conferences are those produced by Investment Seminars Inc.,
Xxxxxxxxx'x Investment Conferences and Sound Money Investors, Inc.
Institutional Conferences: Opportunities for Company exposure before
representatives of major financial institutions may be arranged for any of the
following conferences: North American Corporate Forum, Xxxxxxxxxxx Waldorf
Conference Series, Boston Stockholders Club, Hartford Stockholders Club,
Equities Conferences and Investment Research Institute. The conferences
sponsored by the North American Corporate Forum and Xxxxxxxxxxx Waldorf
Conference Series are three-day events held in New York, designed to allow
participating
ADDENDUM A - Page 2
companies to meet and consult with investment analysts and portfolio managers
representing all primary investment centers in the United States and Canada.
ELECTRONIC MEDIA
A coordinated mix of financial and investment radio and television
programming, covering major markets across the United States and designed to
serve as Company marketing and lead generation conduits, will be arranged. The
Company may be featured on talk shows, special interview segments and
commercials. Program duplicates may be distributed to select brokers and
investors to heighten Company awareness.
DIRECT MAIL CAMPAIGN
A four-page, full color direct mail lead generation piece, highlighting
the Company and the benefits of owning the Company's stock, will be created.
This lead generator will be mailed to 100,000 selected, qualified investors, in
one large mailing or in smaller increments. Printed on heavy gloss stock, the
piece includes a postage paid business reply card, plus an identifying telephone
number enabling investors to respond immediately. Additionally. market makers
names and phone numbers may be listed directly on the mailing piece for all-in
lead generation. The piece includes a postage-paid business reply card, plus an
identifying telephone number enabling, investors to respond immediately.
Consultant's services include creative writing, art work, layout and design,
printing, list rentals, mail handling postage and business reply card
coordination.
INVESTMENT PUBLICATIONS
Personal Investing News is a glossy magazine distributed quarterly to
approximately 40,000 educated. affluent U.S. investors active in the emerging
growth company marketplace. A two-page interview with a key officer of the
Company, emphasizing the Company's merits and growth potential, will be created
for inclusion in Personal Investing News. An additional two- page advertorial
about the Company with a similar emphasis on the Company's merits, will be
included in Personal Investing News, and will feature the address and telephone
number of the Company, and/or the address and telephone number for market makers
of the Company stock. In addition, a photograph of the key Company officer
featured in the interview will appear on the front cover of Personal Investing
News to draw attention to the Company's story inside the magazine. Consultant's
services include creative writing, art work, layout and design, printing and
list rentals.
Bull & Bear is a tabloid-style newspaper distributed six to nine times
per year to approximately 60,000 active investors in the United States and
Canada. The two-page Personal Investing News advertorial will be reprinted for
inclusion in Bull & Bear.
ADDENDUM A - Page 3
