Exhibit 4.01
Consulting Agreement
THIS AGREEMENT is made and entered into as of this 1st day of February 1999
between Xxxxx Xxxxxx Xxxxx, an individual residing at Apdo 000, Xxx Xxxx, Xxxxx
Xxxx (the "Consultant") and Diversicon Holdings Corp., 000 Xxxx Xxxxxx, Xxxxxx
Xxxxxx, XX 00000 (the "Company").
WITNESSETH:
WHEREAS, the Consultant provides business consulting services, public relations
and direct marketing advertising; and
WHEREAS, the Company desires to conduct an investor public relations program and
to obtain the benefit of consultant's services as a business adviser and
consultant related thereto; and
WHEREAS, the Consultant is willing to provide such services for the Company.
NOW THEREFORE, in consideration of the mutual covenants herein contained, it is
agreed:
1. Engagement: Subject to the terms of this Agreement, the Company hereby
engages the Consultant to assist the Company in creating and maintaining an
investor public relations campaign and to render services as a business and
financial adviser and consultant as described in Section 2 of this
Agreement. The Consultant hereby agrees to perform the services as
described in Section 2 of this Agreement subject to the further provisions
of this Agreement.
2. Consulting Services: The Consultant shall provide the following services:
A. The Consultant will provide advice and opinions to the Company
concerning matters in connection with shareholder relations, corporate
reorganizations, capital structure, development of a business plan,
financial matters, capital raising transactions, and general corporate
and strategic options for the Company. The strategic options may
include, without limitation, acquisitions, asset sales or purchases,
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mergers, consolidations, joint ventures, business combinations,
recapitalizations, spin-off's, and equity and debt financings through
public offerings, private placements, institutional borrowings, or
otherwise.
B. The Consultant will review and analyze all aspects of the Company's
marketing goals and make recommendations on feasibility and
achievement of desired goals.
C. The Consultant will review all of the general information and recent
SEC filings of the Company and write, design, and produce a direct
mail package of up to 100,000 pieces to include an ample number of
corporate profiles so as to allow for one profile for each respondent
to the original mailing. Corporate profiles shall be prepared in
"brokerage style format." The direct mail package and the corporate
profile shall be submitted to the Company for its approval prior to
circulation. All postage for the direct mailing and return mail shall
be paid by the Company. Such direct mailing shall occur no later than
March 31 , 1999.
D. The Consultant will introduce brokers interested in participating and
conduct the necessary due diligence and obtain the required approvals
necessary for those firms to participate. This will include a
preliminary "INSTA-FAX" that will be written and faxed by the
Consultant to its broker-dealer network and other interested brokers.
Upon the Company's request, the Consultant will provide fax and phone
lines to be answered "Diversicon Holdings Corp.," by an account
executive from 9am - 4 p.m., 5 days a week, and provide mailings of
10Q and 10K, as well as all other information upon request of present
or potential shareholders at his expense.
E. The Consultant will be available to the Company to field any calls
from firms and brokers inquiring about the Company.
F. The Consultant shall coordinate due diligence trips for brokers to
acquaint them with the Company.
G. The Consultant, at his own expense, shall conduct "road shows"
introducing the Company to brokers and new brokerage firms.
H. The Consultant shall for an initial period of EIGHT (8) months
commencing upon signing of this agreement conduct mailings to and
telephone follow-up with
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brokers throughout the United States. Further, Consultant shall for an
initial period of six (6) months commencing upon signing of this
agreement, research, write, and place newsworthy feature articles in
national, regional, local business, investment, and trade
publications.
I. All expenses incurred by the Consultant in providing the foregoing
services shall be borne exclusively by Consultant.
3. Time & Performance: Services to be performed under this Agreement shall
commence upon execution of this Agreement and shall continue until
completion, which is expected to occur within eight months from the date of
this Agreement, except as otherwise provided in this Agreement.
4. Compensation: In exchange for undertaking the services described in Section
2 above and the assignment determined in Section 12 below, the Consultants
shall be entitled to receive from the Company 100,000 shares of common
stock of the Company. Such shares shall be issued under a Registration
Statement of the Company on Form S-8.
5. Representations, Warranties, And Covenants Of Company:
The Company represents and warrants and covenants to the Consultant, each
such representation, warranty and covenant being deemed to be material
that:
A. The Company shall cooperate fully and timely with the Consultant to
perform its obligations under this Agreement.
B. The Company's Board of Directors has duly authorized the execution and
performance of this Agreement by the Company in accordance with
applicable law.
C. The Company shall promptly deliver to the Consultant a complete due
diligence package to include the Company's latest 10K, latest 10Q,
last 6 months of press releases and all other relevant materials,
including but not limited to corporate reports, brochures, etc. DTC
list, full list of shareholders, etc. of the Company.
D. All information supplied by the Company to the Consultant shall be
true, accurate, complete and not misleading, in all material respects;
provided, however, no representation is made as to information
supplied by third parties.
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E. The Company shall act diligently and promptly in reviewing materials
submitted to it by the Consultant to enhance timely distribution of
the materials and shall inform the Consultant of any inaccuracies
contained therein prior to the projected publication date.
Pre-publication approval, in writing, will be obtained from the
Company by the Consultant for all promotion materials.
6. Independent Contractor: Consultant herein is an independent contractor and
will not act as the Company's agent, nor shall be deemed an employee of the
Company for the purposes of any employee benefit program, or be deemed an
employee of the Company for purposes of income tax withholding, FICA,
taxes, unemployment benefits, workers compensation benefits, or otherwise.
The Consultant shall not enter into any Agreement or incur any obligations
on the Company's behalf, or commit the Company in any manner without the
Company's prior consent. As an independent contractor, the Consultant
understands and agrees that he is solely responsible for the control and
supervision of the means by which the services hereunder are completed.
Such beings, by which the services are accomplished, are subject to the
Consultant's discretion, which discretion must be exercised consistent with
the goal of completing the services on schedule and in accordance with the
terms of this Agreement.
The Consultant also acknowledges and agrees that no training is required by
the Company and no training will be provided by the Company. Any supplies,
which in the opinion of the Consultant may be necessary to perform the
services required, shall be the responsibility of the Consultant.
7. Representations, Warranties, And Covenants of Consultant: The Consultant
represents, warrants, and covenants to the Company, each such
representation, warranty and covenant being deemed to be material, that:
A. All services provided hereunder shall be performed in accordance of
all applicable Federal, State, and local laws and executive orders.
B. The Consultant has not been and is not currently under indictment or
under investigation by any state or federal agency or law enforcement
authority and will promptly notice the Company if the Consultant
should become the subject of such an indictment or investigation.
C. Services under this agreement will be timely performed.
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D. With respect to all works of authorship created by the Consultant in
the performance of services under this agreement ("Work Product") that
(1) the Consultant's retention by the Company and the creation, use or
distribution of the Work Product does not and will not violate any
non-compete, confidentiality or other contract binding on Consultant
or infringe on any patent, copyright, trade secret, or other
proprietary right of any third party, (2) the Work Product is and will
be original; and (3) the Work Product shall conform strictly and in
all respects to specifications and prevailing standards of quality and
workmanship.
E. The Consultant shall indemnify and hold the Company harmless from any
and all claims of other parties for breach of the foregoing
representations, warranties and covenants.
8. Disclaimer By the Consultant : Other than as set forth in Section 7 above,
the Consultant makes no representation or warranty about the quality of its
services to be provided hereunder. In particular, the Consultant makes no
representation as to the value of its services or that its services will
result in any enhancement to the Company.
9. Termination: If the Company fails to make timely payment of the
compensation, the Consultant shall have the right to terminate any further
performance under this Agreement. In such event, and provided the
Consultant is not in breach or default of his obligations under this
Agreement, all compensation shall become immediately due and payable and/or
deliverable, and the Consultant shall be entitled to receive and retain the
same as liquidated damages, and not as a penalty, in lieu of all other
remedies, the parties acknowledging and agreeing that it would be too
difficult currently to determine the exact extent of the Consultant's
damage, but that the receipt and retention of such compensation is
reasonable present estimate of such damage.
In the event of the Consultant's failure to perform hereunder or other
breach of this Agreement by Consultant, the Company may terminate this
Agreement and be entitled to reimbursement or damages. The terms of
Sections 7E, 11 and 12 of this Agreement shall survive the termination of
this Agreement.
10. Limitation of the Consultant's Liability: If the Consultant fails to
perform the services hereunder, Consultant's entire liability to the
Company shall not exceed the amount of the compensation the Consultant has
received from the Company of Section 4. Expect as provided elsewhere in
this agreement,
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in no event will the consultant be liable for any indirect, special or
consequential damages nor any claim against the company by any person or
entity arising from or in any way related to this; provided however, the
consultant shall indemnify and shall hold the Company harmless from any and
all claims, causes of action, legal proceedings (Whether civil, criminal or
attorney's fees and costs) arising from any negligent or intentional
misrepresentation made by the Consultant about the Company
11. Ownership of Materials: Work Product created as a result of Consultant's
performance hereunder is "work made for hire" under United States copyright
law and shall be owned exclusively by the Company. If and to the extent
Consultant may, under copyright or other applicable law, be entitled to
claim any ownership interest in the Work Product, the Consultant, on behalf
of himself, his successors and assigns, in consideration for the
compensation paid under Section 4 hereby transfers, grants, conveys,
assigns, and relinquishes exclusively to the Company all of Consultant's
right, title and interest, including the copyright, in and to the Work
Product, Consultant will promptly upon the request of the Company execute
such assignment and other documents and take such other action as the
Company may reasonably request to convey to the Company full ownership of
any and all Work Product. All Work Product shall be delivered to the
Company in hard copy form or, if applicable, via readable electronic media,
as specified by the Company.
12. Confidentiality: Until such time as the same may become publicly known,
other than as a direct or indirect result of the breach of this Agreement
by Consultant or a breach of a confidentiality obligation owed to the
Company by any third party, the Consultant agrees that any information it
receives which is of a confidential or propriety nature will not be
revealed or disclosed to any person or entity, except in the performance of
this Agreement.
Upon completion of the Consultant's services and upon written request of
the Company all materials, original documentation provided will be returned
promptly to the Company. The Consultant will, however, require
Confidentiality Agreements from its own employees and from contractors the
Consultant reasonably believes will come in contact with confidential
material.
The Consultant agrees that it would be difficult to compensate the Company
fully for damages for any violation of the provisions of this Section 13.
Accordingly, the Consultant specifically agrees that the Company shall be
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entitled to temporary and permanent injunctive relief to enforce this
Section 13 and that such relief may be granted without the necessity of
proving actual damages or posting a bond. This provision with respect to
injunctive relief shall not, however, diminish the right of the Company to
claim and recover damages in addition to injunctive relief.
13. Notices: All notices hereunder shall be in writing and addressed to the
party at the address herein set forth, or at such other address as to which
notice pursuant to this section may be given, and shall be given by
personal delivery, by certified mail, express mail or by national overnight
courier services. Notices will be deemed given upon the earlier of actual
receipt or three (3) business days after being mailed or delivered to such
courier services.
Notices shall be addressed to the Consultant at:
Xxxxx Xxxxxx Xxxxx
Apdo 000
Xxx Xxxx, Xxxxx Xxxx
And to the Company at:
Diversicon Holdings Corp.
000 Xxxx Xxxxxx
Xxxxxx Xxxxxx XX00000,
Any notices to be given hereunder will be effective if executed by and sent
by the attorneys for the parties giving such notice, and in connection
therewith the parties and their respective counsel agree that in giving
such notice such counsel may communicate directly in writing with such
parties to the extent necessary to give such notice.
14. Severability: If one or more provisions of this Agreement shall be held
invalid, illegal, or unenforceable in any respect, such provision, to the
extent invalid, illegal, or unenforceable, and provided that such
provisions is not essential to the transaction provided for by this
Agreement, shall not affect any other provision hereof, and the Agreement
shall be construed as if such provision had never been contained herein.
15. Miscellaneous:
A. Governing Law: This Agreement shall be governed by and interpreted
under the laws of the State of New York.
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B. Parties in Interest: Nothing in this Agreement, expressed or implied,
confers any rights or remedies on any person other than the parties to
this Agreement and their respective successors and assigns, nor does
anything in this Agreement relieve or discharge the obligation or
liability of any third persons to any party to this Agreement, nor
does any provision herein give any third person any right of
subrogation against any party to this Agreement.
C. Multiple Counterparts: This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of
which together shall constitute one and the same instrument.
Executed as a sealed instrument as of the day and year first above written.
For the Company:
Diversicon Holdings Corp.
By: /s/ Xxxxxx Xxxxxxxxx
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Xxxxxx Xxxxxxxxx
President
For the Consultant: /s/ Xxxxx Xxxxxx Xxxxx
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Name: Xxxxx Xxxxxx Xxxxx
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