ENGAGEMENT AGREEMENT
1. This letter will confirm the understanding between Coronado Industries
and/or its affiliates and successors (the "Company") and Capital Markets
Consulting Group and/or any affiliates and successors ("CMCG"). CMCG will
provide consulting and other services described by the attachment ("services")
and will represent you during the engagement as exclusive Financial Relations
Consultants of the kind described by that attachment, all of the terms and
conditions set forth in this letter agreement. That attachment is incorporated
in this letter agreement and forms a part hereof. Unless otherwise terminated as
provided in paragraph ten of this letter agreement, the engagement term shall be
initially for 6 months commencing, February 8, 1999.
2. The Company agrees to furnish or cause to be furnished to CMCG all
information concerning the Company as CMCG reasonably requests and deems
appropriate for purposes of this engagement. The Company represents that all
information, with respect to the Company, provided to CMCG will be complete and
correct in all material respects and will not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein not misleading in light of the circumstances under which such
statements are made. In rendering CMCG's services hereunder, Coronado Industries
understands that CMCG will be using and relying on publicly available
information and the information furnished to CMCG by Coronado Industries without
independent verification thereof. The Company further acknowledges and
understands the value that CMCG brings to its relationship with its contacts on
behalf of the Company. This specifically includes trust engendered and inherent
due to full and complete candor of not just material facts but all
communications on behalf of the Company. CMCG will treat as confidential any
non-public information provided to it hereunder and will not disclose the same
to third parties unless required by applicable law. In the event disclosure has
been or will be made by CMCG, CMCG will use it's best efforts to cooperate as
reasonably requested by the Company in minimizing any potential loss or injury
to the Company as a consequence of any such necessary disclosure. In addition,
CMCG will use its best efforts to comply with all applicable state and Federal
securities laws in the performance of this agreement.
3. CMCG will be generally available to you in connection with its rendering
of services. Specifically, CMCG will (a) make direct and indirect contact with
existing shareholders, potential investors, broker/dealers, security analysts,
registered representatives, institutional investors, investment bankers, and
other professional investment community contacts including financial media
sources for the purpose of enhancing the Company's public image and perceived
value, (b) oversee and assist the Company in the creation, production and
distribution of financial markets and investor/shareholder corporate image
materials, including due diligence literature, corporate profiles, and investor
packages, as well as all financial press releases; (c) assist the Company in its
endeavor to secure research analyst coverage through a targeted security
professional's campaign.
4. The Company will use its best efforts to afford CMCG 48 hours to review
any disclosure, prior to its release, which the Company plans to make to any of
the sources described in paragraph (3) within the general terms of the proposal.
In addition, CMCG will be responsible for disseminating financial industry press
releases only upon request. CMCG agrees that it will not release or distribute
any press release without the Company's prior consent.
5. In consideration of CMCG's services hereunder, the Company agrees to pay
CMCG, promptly when due, the compensation described by and in strict accordance
with the attachment ("Compensation") to this engagement letter. If CMCG and the
Company determine to change the scope of the engagement, then a mutually
acceptable amendment or supplement to that attachment shall be promptly executed
at the time by CMCG and Company. Absent any such amendment, all terms and
conditions of this agreement shall be binding to the parties.
6. CMCG shall be entitled to such additional fees as may be mutually agreed
upon by separate agreement between the parties hereto, for consulting services
rendered during the engagement term if (a) CMCG participates, at the request of
the Company, in substantive discussions regarding such additional services with
one or more of the parties thereto (or their representative) during the
engagement term or introduces, at the request of the Company, one or more such
parties to the Company during the engagement term, and (b) the Company and the
parties agree to a contract or agreement in principle within 24 months from the
date of termination of the agreement.
7. The Company shall agree to pay all of CMCG's out-of-pocket expenses
reasonably incurred, in connection with this engagement. If CMCG and the Company
determine to change the scope of the engagement, then a mutually acceptable
amendment or supplement to that attachment shall be promptly executed at the
time by CMCG and Company. Absent any such amendment, all terms and conditions of
this agreement shall be binding to the parties.
8. CMCG acknowledges that it will be acting on the Company's behalf,
therefore, CMCG requires bilateral indemnification, and assumes the Company
requires and agrees to the same. A copy of the indemnification provisions (the
"Indemnification Provisions") is attached to this engagement letter and is
incorporated herein and made a part hereof.
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9. CMCG hereby fully discloses that certain affiliates, officers and
employees of CMCG from time to time may be:
A. registered as Registered Investment Advisors with the U.S. Securities &
Exchange Commission;
B. licensed as Registered Securities Principals issued by the National
Association of Securities Dealers ("NASD"); and/or
C. licensed as Registered Representatives issued by the NASD.
All NASD registrations are only carried through broker dealer affiliate(s)
of which are non-CMCG affiliated NASD-registered broker/dealers.
CMCG further discloses and the Company acknowledges that CMCG is NOT a
broker/registered with the NASD or any other regulatory agency, nor is it,
or any of its affiliates and employees an owner in any broker/dealer.
Furthermore, in the performance of Services under the terms and conditions
of this agreement, such services shall not be considered to be acting in
any broker/dealer capacity, or to otherwise directly facilitate the offer
or sale of the Company as a broker dealer or underwriter in a capital
raising transaction.
10. Either party hereto may terminate this engagement as follows:
a. This Agreement may be terminated by the Company after 6 months with
written notice to CMCG if the stock has not traded at $2 per share for
thirty calendar days. In the event of such termination by the Company,
CMCG shall be entitled to receive its regular monthly compensation and
reimbursement of out-of-pocket expenses up to the effective date of
termination, or renewal term of this agreement to the extent it is
unpaid, together with any unexercised vested and non-vested stock
options, warrants or rights granted hereunder.
b. CMCG may terminate this agreement at any time upon written notice to
the Company.
(i) If the Company fails to cure any material breach of any provision
of the Agreement within sixty (60) days (unless such breach
cannot be reasonable cured within the (60) days and the Company
is actively pursuing to cure said breach).
(ii) For the Company's substantial negligence, willful misconduct,
fraud or misrepresentation.
11. The validity and interpretation of this letter agreement shall be
governed by the laws of the State of Arizona applicable to agreements made and
to be fully performed therein.
12. For the convenience of the parties, the parties may execute any number
of counterparts of this letter agreement hereto. Each such counterpart shall be
deemed to be an original instrument, but all such counterparts taken together
shall constitute one and the same letter agreement.
If the foregoing correctly sets forth our agreement, please sign the
enclosed copy of the letter in the space provided and return it to us, whereupon
all parties will be bound to the terms of this engagement.
Very truly yours,
CAPITAL MARKETS CONSULTING GROUP
By: /s/ Xxxxxxx X. Xxxx
------------------------------
Title: President
---------------------------
CONFIRMED AND AGREED TO:
Coronado Industries Corporation
This 8th day of February, 1999.
By: Xxxx X. Xxxxx
-------------------------------
Title: President
----------------------------
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COMPENSATION AGREEMENT
In accordance with the contract terms for Coronado Industries ("Company")
following is the compensation adjustment going forward for Capital Markets
Consulting Group, and/or its affiliates ("CMCG") to perform the outlined
services. The contract period, for Financial Relations Consulting, shall be for
a SIX (6) month period from the date of this Engagement Agreement at which time
it will be automatically extended for a second six months if the stock has
traded at $2 per share. In order to earn the 1,600,000 shares referenced in
paragraph four, this page, the terms must be met in the first six month period
with the sole exception as follows: if the stock starts trading at the two
dollar level and the six month period is over, for the sole purpose of earning
the 1,600,000, it shall be extended for the number necessary, i.e. no more than
twenty-nine (29) additional days. The intent of this extension is to acknowledge
that any additional trading at the same level would be as a continued result of
efforts exerted by CMCG on behalf of the Company within the first six months and
would simply allow the thirty day requirement be completed.
Cash retainer of 6000.00 dollars per month, payable on the first of month
in advance of services. Payment to be earned, however beginning 2-8-99 partial
payment may exist by mutual agreement in writing.
Reasonable out of pocket expenses; any one item exceeding 350.00 dollars
must have prior approval of company (not including phone long distance).
In order for CMCG to participate in our success, a percentage of market
capitalization versus the price from which we have successfully started is
utilized. If, through a combination of introducing the Coronado story to
sufficient numbers of appropriate brokers, portfolio managers analysts,
marketmakers, financial news media, etc., the market capitalization reaches
60,000,000 million dollars then we vest in the opportunity to purchase shares in
the Company at 25 cents. Basis for this is the following assumption: 30,000,000
shares outstanding as of the date of this contract and a starting stock price of
25 cents. If achieved, the following is earned and 100% vested. To be earned a
combination of fifty (50%) percent restricted and fifty (50%) free trading
shares, in the amount of 1,600,000 shares vested upon stock averaging $2/sh for
thirty calendar days. Cost to CMCG for these shares will be 25 cents per share,
which is the price at which services began.
Should the contract be extended for the second six months, additional
shares can be earned as follows: on the same basis as utilized before, however
only on the difference between two (2) dollars and five (5) dollars, an
additional one (1%) percent on increased market capitalization can be earned.
The stock must attain a price of five (5) dollars and average $4.50 or above per
share for sixty days. The intent of this is to allow the Company to successfully
apply to the NASDAQ. Therefore, if the sixty day requirement is not strictly met
yet the Company is able to meet the necessary market requirements for its
application the additional stock shall still be awarded. The cost to CMCG for
these shares only is two (2) dollars per share.
A ten-percent consulting fee for any financing introduced to company which
results in successful funding.
/s/ Xxxx X. Xxxxx /s/ Xxxxxxx X. Xxxx
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Coronado Industries CMCG
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SPECIFIC SERVICES AGREEMENT
Capital Markets Consulting Group and/or affiliates, (collectively "CMCG")
will serve as the exclusive Financial Relations Counsel for Coronado Industries,
Inc.
The financial relations campaign will be oriented to members of the
professional investment community. CMCG may contact existing shareholders,
broker/dealers, potential investors, registered representatives, institutions,
mutual fund managers, investment banking sources, securities analysts,
independent portfolio managers, and financial media sources in the performance
of the anticipated services listed.
CMCG anticipates the following actions will be attempted and/or implemented
within the scope of this engagement:
* Oversee further development, including input, which will specifically
benefit and target the professional investment community, and distribute
high quality, due diligence and marketing materials.
* Specifically develop, execute and maintain a targeted securities
professionals communications and information campaign directed toward
retail brokers, institutional investors, third-party portfolio managers
and small/micro-cap mutual funds, and buy and sell side analysts. CMCG
will allocate and utilize its proprietary securities industry,
micro/small/mid-cap company oriented, databases and fax communications
programs. This will include responding to all incoming investment
community inquiries and fulfillment of information and data requests.
However, all said databases, information and names remain the exclusive
property of CMCG and are not to be shared or disseminated to Third
parties.
* Selectively target speaking engagements by senior management executives.
CMCG will secure and coordinate specific speaking engagements which are
tailored toward specific groups and/or conferences, i.e., retail and/or
analytical with the intent to enhance that group's awareness and
perception of the investment opportunity that exists with the Company.
* At the Company's request CMCG will organize, monitor and follow-up
conference calls between top management and the investment community in
conjunction with material press releases, through a teleconferencing
service.
* CMCG will use its best efforts to secure investment recommendation and
on-going corporate research coverage by at least two (2) buy or sell-side
analysts from regional investment banking or research firms and/or an
endorsement by an investment news letter publication with a subscriber
base in excess of 2,500.
* CMCG will use its best efforts to secure additional market maker coverage.
CMCG intends to perform the services and accomplish the specified goals
within the scope of this agreement. However, due to the nature of services
being performed, CMCG cannot guarantee, nor can it be assumed that certain
specific results will be realized with reference to increased market
valuation of the Company.
Additional services can and will be implemented upon Company request, at
agreed upon additional compensation. These may include, but are not limited to:
* Developing, scheduling and coordinating effective "road show"
presentations for primary metropolitan financial markets.
* Planning, arranging and coordinating periodic registered representative,
instructional and/or other securities professionals meetings, luncheons,
dinners or special gatherings.
/s/ Xxxx X. Xxxxx /s/ Xxxxxxx X. Xxxx
------------------------------ ------------------------------
Coronado Industries CMCG
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INDEMNIFICATION PROVISIONS
The Company agrees to defend, indemnify and hold harmless CMCG, its
officers, directors, and employees (hereafter jointly referred to as CMCG)
against any and all losses, claims, demands, suits, actions, judgments, awards,
damages, liabilities, costs, reasonable attorneys' fees (and all actions in
respect there of and any reasonable real or other expenses in giving testimony
or furnishing documents in response to a subpoena or otherwise) including the
costs of investigating, preparing or defending any such action or claim, whether
or not in connection with litigation in which CMCG is a party, directly or
indirectly causing by relating to, or asserted by a third party, based upon
arising out of (a) the Company's breach of or the incorrectness of any
representation, warranty, or covenant of Company contained in this agreement;
and/or (b) the conduct or operation of the business of the company; or (c)
failure of Company to perform any term condition, obligation required by this
Agreement to be performed by Company; or (d) any Services rendered by CMCG as
defined in or contemplated by the letter agreement to which these Provisions are
attached, as it may be amended from time to time (the "Agreement"); or (e) CMCG
acting for the Company, including without limitation, any act or omission by
CMCG in connection with its performance of its obligations under the Agreement.
Notwithstanding the foregoing, the Company shall not have any liability to CMCG
for, or in connection with the engagement of CMCG or with any of the foregoing,
for any such liability for losses, claims, demand, suits, actions, judgments,
awards, damages, liabilities, costs or expenses that is found in a final
judgment by a court of competent jurisdiction or mutually acceptable arbitrator
to have resulted primarily and directly from CMCG's negligence, willful
misconduct, CMCG's material breach or the incorrectness of any representation,
warranty or covenant of CMCG contained in this Agreement.
CMCG agrees to defend, indemnify and hold harmless the Company, its
officers, directors, and employees (hereafter jointly referred to as the
Company) against any and all losses, claims, demands, suits, actions, judgments,
awards, damages, liabilities, costs, reasonable attorneys' fees (and all actions
in respect thereof and any reasonable real or other expenses in giving testimony
or furnishing documents in response to a subpoena or otherwise) including the
consists of investigating, preparing or defending any such action or claim,
whether or not in connection with litigation in which the Company is a party,
directly or indirectly caused by, relating to, or asserted by a third party,
based upon or arising out of (a) CMCG's breach of or the incorrectness of any
representation, warranty, or covenant CMCG contained in this agreement; and/or
(b) the conduct or operation of the business of CMCG; or (c) failure of CMCG to
perform any term condition, or obligation required by this Agreement to be
performed by CMCG; or (d) any Services rendered by CMCG as defined in or
contemplated by the letter agreement to which these Provisions are attached, as
it may be amended from time to time (the "Agreement"); or (e) CMCG acting for
the Company, including without limitation, any act or omission by CMCG in
connection with its performance of its obligations under the Agreement.
Notwithstanding the foregoing, CMCG shall not have any liability to the Company
for, or in connection with, the engagement of CMCG or with any of the foregoing,
for any such liability for losses, claims, demands, suits, actions, judgments,
awards, damages, liabilities, costs or expenses that is found by a court of
competent jurisdiction or mutually acceptable arbitrator to have resulted
primarily and directly from the Company's negligence, willful misconduct, CMCG's
material breach or the incorrectness of any representation, warranty or covenant
of the Company contained in the Agreement.
As a condition to the foregoing indemnity, in the event of the assertion of
any claim or demand, or the institution of any suit or action with respect to
which either party is required by this paragraph to Indemnity the other party
(the indemnifying party hereinafter referred to as the "Indemnitor," and the
party entitled to indemnification hereinafter referred to as the "Indemnitee")
the Indemnitee will give notice thereof to the Indemnitor and will afford the
Indemnitor the opportunity to defend, settle, or compromise the same. Unless the
Indemnitor agrees to duly, promptly and diligently discharge or defend against
such claim, demand, suit or action in such manner as will, in the Indemnitee's
reasonable judgment, protect the Indemnitee from any liability, loss, cost or
damage as a result thereof, the indemnitee may, at the Indemnitee's option, for
the Indemnitor's account and risk, assume the defense of the same, may implead,
interplead or claim over against the Indemnitor and may thereafter hold the
Indemnitor responsible for all sums paid and all costs, expenses, and reasonable
attorney's fees incurred by the Indemnitee in so doing. The indemnitee may at
the indemnitee's option, participate in any legal proceedings being conducted by
the Indemnitor hereunder with counsel of the Indemnitee's choosing, but such
participation shall be at the Indemnitee's sole expense, so long as the
Indemnitor is diligently conducting the same in the Indemnitee's reasonable
judgment, and the Indemnitee's counsel shall to the fullest extent consistent
with its professional responsibilities cooperate with the Indemnitor and any
counsel designated by the Indemnitor.
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In the event that a court of competent jurisdiction, or an arbitrator
mutually acceptable to the parties, determines that the Indemnification CMCG are
liable to a third party asserting a claim against Company and CMCG, then as
between Company and CMCG, they each agree to contribute such amounts as may be
necessary to satisfy such liability, in amounts proportionate to their
respective comparative negligence/responsibility as determined by a court of
competent jurisdiction or mutually acceptable arbitrator. If either Company or
CMCG pays such third party more than its proportionate share as determined
above, then it shall be entitled to seek contribution from the other party to
the extent of such excess.
No person or affiliated entity found liable for a fraudulent
misrepresentation shall be entitled to contribution from any person or
affiliated entity who is not also found liable for such fraudulent
misrepresentation.
These Indemnification Provisions shall be in addition to any liability that
either party may otherwise have to the other party or their respective
controlling persons within the meaning of the federal securities laws. The
foregoing Indemnification Provisions are in addition to any rights or remedies
available under applicable law and are not to the exclusion of any such rights
or remedies.
/s/ Xxxx X. Xxxxx /s/ Xxxxxxx X. Xxxx
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Coronado Industries CMCG
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