Exhibit 10.1
------------
PUBLIC RELATIONS SERVICES AGREEMENT
This Public Relations Services Agreement ("Agreement") is made and
entered into this 19th day of July 2002 (the "Effective Date") by and between
Rubicon Medical Corporation, a Utah Corporation ("Company") and Equity Capital
Partners, Inc., a Florida Corporation ("Consultant").
R E C I T A L S:
The Company desires to engage Consultant to perform certain public
relations services for it, and Consultant desires, subject to the terms and
conditions of this Agreement, to perform public relations services for the
Company.
NOW, THEREFORE, in consideration of the mutual promises and
undertakings herein contained and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties agree as
follows:
1. ENGAGEMENT OF CONSULTANT.
------------------------
Company hereby engages Consultant and Consultant hereby agrees to hold
itself available to render, and to render at the request of the Company,
independent advisory and consulting services for the Company to the best of its
ability, upon the terms and conditions hereinafter set forth. Such consulting
services shall include but not be limited to the development, implementation and
maintenance of an on-going information dissemination support system that
increases public, investor and financial professional awareness of the Company's
activities and stimulate interest in the Company and its products. The
information dissemination support system shall include, but not be limited to a
Shareholder Communication System, Investor Information System and a Media
Relations System, which will be defined and developed by Consultant in
consultation with the Company. The information shall be approved by the Company
and a timeline for development of this information shall be developed upon
execution of this agreement. It is understood that Consultant's ability to
relate information to the public regarding the Company's activities is directly
proportionate to the information made available by the Company to Consultant.
2. TERM.
-----
The term of this Agreement ("Term") shall begin as of the Effective
Date and shall terminate six (6) months thereafter ("Anniversary Date"), unless
extended in accordance with provisions of this Agreement. It is understood that
either party may terminate this Agreement at any time and for any reason upon
thirty (30) days written notice to the other party or ten (10) days for a
material breach.
1
3. COMPENSATION.
------------
As compensation for the services rendered by Consultant under this
Agreement, Company agrees pay to Consultant certain restricted shares ("Shares")
and common stock purchase warrants (the "Warrants") as stated in this Section.
(a) Upon execution of this Agreement the Company shall pay to
Consultant within ten (10) days of the execution of this agreement: (i) 400,000
restricted shares of company stock payable as follows: 200,000 shares within ten
(10) days of signing, and 200,000 shares thirty (30) days after the first grant,
(ii) Warrants entitling Consultant for a 2-year period to purchase 100,000
shares of the common stock of the Company at a price of $0.26, (iii) Warrants
entitling Consultant for a 2-year period to purchase 100,000 shares of the
common stock of the Company at a price of $0.55, and (iv) Warrants entitling
Consultant for a 2-year period to purchase 100,000 shares of the common stock of
the Company at a price of $1.00.
(b) Consultant understands that the Shares, Warrants and Warrant Shares
have not been registered under the Securities Act of 1933, as amended ("Act")
and, unless and to the extent subsequently registered under the Act prior to
issuance, will be issued to Consultant in reliance upon an exemption from such
registration requirements provided by Section 4(2) of the Act. Consultant
understands that, unless and to the extent registered under the Act prior to
issuance, the Shares, Warrants and Warrant Shares will be restricted securities
as defined in Rule 144(a) of the Securities and Exchange Commission and that all
certificates evidencing the Shares, Warrants and Warrant Shares will bear a
legend restricting transfer thereof in substantially the following form:
"The securities represented by this Certificate have not been
registered under the Securities Act of 1933, as amended (the "Act"),
and are "restricted securities" as that term is defined in Rule 144
under the Act. These securities may not be offered for sale, sold or
otherwise transferred except pursuant to an effective registration
statement under the Act, or pursuant to an exemption from registration
under the Act."
(c) The Shares, Warrants and Warrant Shares are being acquired solely
for Consultant's own account for investment and not for the account of any other
person and not for the purpose of reselling or engaging in any public
distribution thereof, whether for Consultant or for the account of the Company
or any other person. Consultant has such knowledge and experience in financial,
tax and business matters as to enable it to utilize the information made
available to it in connection with its acquisition of the Shares, Warrants and
Warrant Shares to evaluate the merits and risks of acquiring such securities and
to make an informed investment decision with respect thereto. Consultant,
through its executive officers, has vast experience in stock and stock
investments, in matters relating to warrants and warrant exercises, and
frequently takes some or all of its professional compensation in the form of
common stock and stock warrants.
(d) The Consultant specifically agrees that it will not sell any of the
Shares tradable stock through a "short sale" nor otherwise hypothecate the stock
or its ownership in such a way that its sale or transfer at other than fair
market value would tend to reduce the stock's per share value. In addition, the
Consultant agrees that it will not sell or cause to be offered for sale a
quantity of stock on any one trading day greater than 10% of the trading volume
on the preceding trading day.
2
4. REGISTRATION RIGHTS.
-------------------
(a) Piggyback Registration. The Company hereby grants Consultant
certain rights to register the Shares and Warrant Shares under the Act, on the
terms and subject to the conditions of this Agreement. It is understood that the
Consultant has no registration rights under the current amended May registration
statement.
(1) The Company shall give the Consultant at least 30 days' prior
written notice of each filing by the Company of a registration statement (other
than a registration statement on Form S-4 or Form S-8 or on any successor forms
thereto) with the Securities Exchange Commission (the "Commission") pursuant to
which the Company is registering shares of its common stock ("Common Stock")
under the Act for sale by itself or others. If requested by the Consultant in
writing within 20 days after receipt of any such notice, the Company shall, at
the Company's sole expense (other than the underwriting discounts, if any,
payable in respect of the Shares or Warrant Shares sold by Consultant), register
all or, at the Consultant's option, any portion of the Shares or Warrant Shares
concurrently with the registration of such other securities, all to the extent
requisite to permit the public offering and sale of the Shares or Warrant Shares
through the securities exchange, if any, on which the Common Stock is being sold
or on the over-the-counter market, and will use its reasonable best efforts
through its officers, directors, auditors, and counsel to cause such
registration statement to become effective as promptly as practicable. If the
managing underwriter of any such offering shall determine and advise the Company
that, in its opinion, the distribution of all or a portion of the Shares or
Warrant Shares requested to be included in the registration concurrently with
the securities being registered by the Company would materially adversely affect
the distribution of such securities by the Company, then the Company will
include in such registration first, the securities that the Company proposes to
sell itself and second, the Shares and Warrant Shares requested to be included
in such registration, to the extent permitted by the managing underwriter.
(2) In the event of a registration pursuant to the provisions of this
Agreement, the Company shall use its reasonable best efforts to cause the Shares
and Warrant Shares so registered to be registered or qualified for sale under
the securities or blue sky laws of such jurisdictions as the Consultant may
reasonably request; provided, however, that the Company shall not be required to
qualify to do business in any state by reason of this Section 4 (a)(2) in which
it is not otherwise required to qualify to do business.
(3) The Company shall keep effective any registration or qualification
contemplated by this Section 4(a) and shall from time to time amend or
supplement each applicable registration statement, preliminary prospectus, final
prospectus, application, document and communication for such period of time as
shall be required to permit the Consultant to complete the offer and sale of the
Shares and Warrant Shares covered thereby.
3
(4) In the event of a registration pursuant to the provisions of this
Agreement, the Company shall furnish to the Consultant such reasonable number of
copies of the registration statement and of each amendment and supplement
thereto (in each case, including all exhibits), of each prospectus contained in
such registration statement and each supplement or amendment thereto (including
each preliminary prospectus), all of which shall conform to the requirements of
the Act and the rules and regulations thereunder, and such other documents, as
the Consultant may reasonably request to facilitate the disposition of the
Shares and Warrant Shares included in such registration.
(5) The Company shall notify the Consultant promptly when such
registration statement has become effective or a supplement to any prospectus
forming a part of such registration statement has been filed.
(6) The Company shall advise the Consultant promptly after it shall
receive notice or obtain knowledge of the issuance of any stop order by the
Commission suspending the effectiveness of such registration statement, or the
initiation or threatening of any proceeding for that purpose and promptly use
its reasonable best efforts to prevent the issuance of any stop order or to
obtain its withdrawal if such stop order should be issued.
(7) The Company shall promptly notify the Consultant at any time when a
prospectus relating thereto is required to be delivered under the Act of the
happening of any event as a result of which the prospectus included in such
registration statement, as then in effect, would include an untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading in the light of the
circumstances then existing, and at the reasonable request of the Consultant
prepare and furnish to it such number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such Shares or Warrant Shares or securities, such
prospectus shall not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances under which
they were made. The Consultant shall suspend all sales of the Shares and Warrant
Shares upon receipt of such notice from the Company and shall not re-commence
sales until it receives copies of any necessary amendment or supplement to such
prospectus, which the Company shall use its best efforts to deliver to the
Consultant within 30 days of the date of such notice from the Company.
(8) If requested by the underwriter for any underwritten offering of
Shares and Warrant Shares, the Company and the Consultant will enter into an
underwriting agreement with such underwriter for such offering, which shall be
reasonably satisfactory in substance and form to the Company, the Company's
counsel and the Consultants' counsel, and the underwriter, and such agreement
shall contain such representations and warranties by the Company and the
Consultant and such other terms and provisions as are customarily contained in
an underwriting agreement with respect to secondary distributions solely by
selling stockholders, including, without limitation, indemnities substantially
to the effect and to the extent provided in Section 4(b) of this Agreement.
4
(9) The Company agrees that until all the Shares or Warrant Shares have
been sold under a registration statement or pursuant to Rule 144 promulgated
under the Securities Act or other available exemption from the Act's
registration requirements, it shall use its reasonable best efforts to keep
current in filing all reports, statements and other materials required to be
filed with the Commission to permit the Consultant to sell the Shares and
Warrant Shares under Rule 144.
(10) The Consultant hereby agrees not to offer, sell, make any short
sale of, loan, grant any option for the purchase of, or otherwise dispose of any
of the Company's Common Stock held of record or beneficially owned by the
Consultant (other than those included in the registration) which at the time of
the effective date of such registration statement may be sold or otherwise
transferred in reliance upon Rule 144 during the period of time (not to exceed
180 days) determined by the Board of Directors of the Company upon advice of its
managing underwriter, from and after the effective date of the registration
statement; provided that the obligations of the Consultant under this paragraph
10 shall not apply unless each officer and director of the Company then
outstanding, in each case, who are not signatories to this Agreement, are bound
by similar restrictions. Such restriction shall not apply to Shares or Warrant
Shares registered in such offering. In order to enforce this provision, the
Company may impose stop-transfer instructions with respect to such
non-registered shares until the end of such period.
(11) However, nothing herein shall be construed to prohibit Consultant
from reselling all or part of the Shares or Warrant Shares in a private
transaction or transactions exempt from registration under Section 4(1) of the
Act or otherwise; provided, however, that any such transferee(s) shall have the
same registration rights and have the same obligations hereunder as Consultant,
and that Consultant and all such transferees together shall share any resale
limit imposed by an underwriter hereunder.
(b) Indemnification. The parties shall indemnify each other as provided
below.
(1) Subject to the conditions set forth below, the Company agrees to
indemnify and hold harmless the Consultant, its employees, agents, and counsel,
and each person, if any, who controls any such person within the meaning of
Section 15 of the Act or Section 20(a) of the Securities and Exchange Act of
1934, as amended (the "Exchange Act") from and against any and all loss,
liability, charge, claim, damage, and expense whatsoever (which shall include,
for all purposes of this Section 2, but not be limited to, attorneys' fees and
any and all reasonable expenses whatsoever incurred in investigating, preparing,
or defending against any litigation, commenced or threatened, or any claim
whatsoever, and any and all amounts paid in settlement of any claim or
litigation) as and when incurred, arising out of, based upon, or in connection
with (i) any untrue statement or alleged untrue statement of a material fact
5
contained (A) in any registration statement, preliminary prospectus, or final
prospectus (as from time to time amended and supplemented) or any amendment or
supplement thereto, relating to the sale of any of the Shares or (B) in any
application or other document or communication (in this Section 2 collectively
called an "application") executed by or on behalf of the Company or based upon
written information furnished by or on behalf of the Company filed in any
jurisdiction in order to register or qualify any of the Shares under the
securities or blue sky laws thereof or filed with the Commission or any
securities exchange; or any omission or alleged omission to state a material
fact required to be stated therein or necessary to make the statements made
therein not misleading, unless (x) such statement or omission was made in
reliance upon and in conformity with written information furnished to the
Company with respect to the Consultant by or on behalf of the Consultant
expressly for inclusion in any registration statement, preliminary prospectus,
or final prospectus, or any amendment or supplement thereto, or in any
application, as the case may be, or (y) such loss, liability, charge, claim,
damage or expense arises out of the Consultant's failure to comply with the
terms and provisions of this Agreement, or (ii) any breach of any
representation, warranty, covenant, or agreement of the Company contained in
this Agreement. The foregoing agreement to indemnify shall be in addition to any
liability the Company may otherwise have, including liabilities arising under
this Agreement.
If any action is brought against the Consultant or any of his
employees, agents, or counsel, or any controlling persons of such person (an
"indemnified party") in respect of which indemnity may be sought against the
Company pursuant to the foregoing paragraph, such indemnified party or parties
shall promptly notify the Company in writing of the institution of such action
(but the failure so to notify shall not relieve the Company from any liability
other than pursuant to this Section 4 (b)) and the Company shall promptly assume
the defense of such action, including the employment of counsel provided that
the indemnified party shall have the right to employ its or their own counsel in
any such case, but the fees and expenses of such counsel shall be at the expense
of such indemnified party or parties unless the employment of such counsel shall
have been authorized in writing by the Company in connection with the defense of
such action or the Company shall not have promptly employed counsel reasonably
satisfactory to such indemnified party, or parties, to have charge of the
defense of such action, in which event such fees and expenses shall be borne by
the Company and the Company shall not have the right to direct the defense of
such action on behalf of the indemnified party or parties. Anything in this
Section 4 (b) to the contrary not withstanding, the Company shall not be liable
for any settlement of any such claim or action effected without its written
consent, which shall not be unreasonably withheld. The Company shall not,
without the prior written consent of each indemnified party that is not released
as described in this sentence, settle or compromise any action, or permit a
default or consent to the entry of judgment in or otherwise seek to terminate
any pending or threatened action, in respect of which indemnity may be sought
hereunder (whether or not any indemnified party is a party thereto) unless such
settlement, compromise, consent, or termination includes an unconditional
release of each indemnified party from all liability in respect of such action.
The Company agrees promptly to notify the Consultant of the commencement of any
litigation or proceedings against the Company or any of its officers or
directors in connection with the sale of any Shares or any preliminary
prospectus, prospectus, registration statement, or amendment or supplement
thereto, or any application relating to any sale of any Shares.
(2) The Consultant, jointly and severally, agrees to indemnify and hold
harmless the Company, each director of the Company, each officer of the Company
who shall have signed any registration statement covering Shares held by the
6
Consultant, each other person, if any, who controls the Company within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, and its
or their respective counsel, to the same extent as the foregoing indemnity from
the Company to the Consultant in Section 4(b)(1) but only with respect to
statements or omissions, if any, made in any registration statement, preliminary
prospectus, or final prospectus (as from time to time amended and supplemented)
or any amendment or supplement thereto, or in any application, in reliance upon
and in conformity with written information furnished to the Company with respect
to the Consultant by or on behalf of Consultant, expressly for inclusion in any
such registration statement, preliminary prospectus, or final prospectus, or any
amendment or supplement thereto, or in any application, as the case may be. If
any action shall be brought against the Company or any other person so
indemnified based on any such registration statement, preliminary prospectus, or
final prospectus, or any amendment or supplement thereto, or in any application,
and in respect of which indemnity may be sought against the Consultant pursuant
to this Section 4 (b)(2), the Consultant shall have the rights and duties given
to the Company, and the Company and each other person so indemnified shall have
the rights and duties given to the indemnified parties, by the provisions of
Section 4 (b).
(3) To provide for just and equitable contribution, if (i) an
indemnified party makes a claim for indemnification pursuant to Section 4 (b)or
(subject to the limitations thereof) but it is found in a final judicial
determination, not subject to further appeal, that such indemnification may not
be enforced in such case, even though this Agreement expressly provides for
indemnification in such case, or (ii) any indemnified or indemnifying party
seeks contribution under the Act, the Exchange Act or other wise, then the
Company (including for this purpose any contribution made by or on behalf of any
director of the Company, any officer of the Company who signed any such
registration statement, any controlling person of the Company, and its or their
respective counsel) as one entity, and the Consultant (including for this
purpose any contribution by or on behalf of an indemnified party) as a second
entity, shall contribute to the losses, liabilities, claims, damages, and
expenses whatsoever to which any of them may be subject, on the basis of
relevant equitable considerations such as the relative fault of the Company and
the Consultant in connection with the facts which resulted in such losses,
liabilities, claims, damages, and expenses. The relative fault, in the case of
an untrue statement, alleged untrue statement, omission, or alleged omission
shall be determined by, among other things, whether such statement, alleged
statement, omission or alleged omission relates to information supplied by the
Company or by the Consultant, and the parties' relative intent, knowledge,
access to information, and opportunity to correct or prevent such statement,
alleged statement, omission, or alleged omission. The Company and the Consultant
agree that it would be unjust and inequitable if the respective obligations of
the Company and the Consultant for contribution were determined by pro rata or
per capita allocation of the aggregate losses, liabilities, claims, damages, and
expenses (even if the Consultant and the other indemnified parties were treated
as one entity for such purpose) or by any other method of allocation that does
not reflect the equitable considerations referred to in this Section 4 (b)(3).
No person guilty of a fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any person who
is not guilty of such fraudulent misrepresentation. For purposes of this Section
4 (b)(3) each person, if any, who controls the Consultant within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act and each employee,
7
agent, and counsel of Consultant or control person shall have the same rights to
contribution as Consultant and each person, if any, who controls the Company
within the meaning of Section 15 of the Act or Section 20(a) of the Exchange
Act, each officer of the Company who shall have signed any such registration
statement, each director of the Company, and its or their respective counsel
shall have the same rights to contribution as the Company, subject to each case
to the provisions of this Section 4 (b)(3). Anything in this Section 4 (b)(3) to
the contrary notwithstanding, no party shall be liable for contribution with
respect to the settlement of any claim or action effected without its written
consent. This Section 4 (b)(3) is intended to supersede any right to
contribution under the Act, the Exchange Act or otherwise.
5. INDEPENDENT CONTRACTOR
----------------------
It is expressly agreed that Consultant is acting as an independent
contractor in performing its services hereunder. The Company shall carry no
workmen's compensation insurance nor any health or accident insurance to cover
Consultant or its employees or agents. The Company shall not pay any
contributions to social security, unemployment insurance, Federal or state
withholding taxes nor provide any other contributions or benefits, which might
be expected in an employer-employee relationship. This Agreement does not create
any partnership, joint venture or similar relationship, nor any employment
relationship, and neither party shall have the right to make agreements in the
name of or legally bind the other party.
6. ASSIGNMENT.
-----------
Consultant shall not voluntarily or by operation of law assign or
otherwise assign or transfer this Agreement nor any rights or obligations
hereunder without the prior written consent of the Company.
7. GENERAL PROVISIONS.
-------------------
7.1 Governing Law and Jurisdiction. This Agreement shall be governed by
and interpreted in accordance with the laws of the State of Utah and shall be
interpreted as if both parties participated equally in its drafting. Each of the
Parties hereto consents to such jurisdiction for the enforcement of this
Agreement and matters pertaining to the transaction and activities contemplated
hereby.
7.2 Notices. All notices and other communications provided for or
permitted hereunder shall be made by hand delivery or certified registered mail
with return receipt, addressed as follows:
PARTY ADDRESS
Company: Xxxxxxx X. Xxxxxx, President/CEO
Rubicon Medical Corporation
0000 Xxxx Xxxxxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
8
Consultant: Xxxxxxxx Xxxxxx, President
Equity Capital Partners, Inc.
0000 Xxxxx Xxxxx Xxx Xxxxx 0
Xxxxx, Xxxxxxx 00000
All such notices and communication shall be deemed to have been duly
given: when delivered by hand, if personally delivered; five (5) business days
after deposit in any United States Post Office in the continental United States,
postage prepaid, if mailed.
7.3 Attorney's Fees. In the event a dispute arises with respect to this
Agreement, the party prevailing in such dispute shall be entitled to recover all
expenses, including, without limitation, reasonable attorney's fees and expenses
incurred in ascertaining such party's rights, in preparing to enforce or in
enforcing such party's rights under this Agreement, whether or not it was
necessary for such party to institute suit.
7.4 Complete Agreement. This Agreement supersedes any and all of the
other agreements, either oral or in writing, between the Parties with respect to
such subject matter in any manner whatsoever. Each Party to this Agreement
acknowledges that no representations, inducements, promises or agreements, oral
or otherwise, have been made by any Party, or anyone herein, and that no other
Agreement, statement or promise not contained in this Agreement may be changed
or amended only by an amendment in writing signed by all of the Parties or their
respective successors-in-interest.
7.5 Binding. This Agreement shall be binding upon and inure to the
benefit of the respective successors and permitted assigns of the Parties.
7.6 Unenforceable Terms. Any provision hereof prohibited by law or
unenforceable under the law of any jurisdiction in which such provision is
applicable only be ineffective without affecting any other provision of this
Agreement. To the full extent, however, that such applicable law may be waived
to the end that this Agreement be deemed to be a valid and binding agreement
enforceable in accordance with its terms, the Parties hereto hereby waive such
applicable law knowingly and understanding the effect of such waiver.
7.7 Execution in Counterparts. This Agreement may be executed in
several counterparts and when so executed shall constitute one agreement binding
on all the Parties, notwithstanding that all the Parties are not signatory to
the original and same counterpart.
7.8 Further Assurances. From time to time each Party will execute and
deliver such further instruments and will take such other action as any other
9
Party may reasonable request in order to discharge and perform their obligations
and agreements hereunder and to give effect to the intentions expressed in this
Agreement.
7.9 Incorporation by Reference. All exhibits referred to in this
Agreement are incorporated herein in their entirety by such reference.
7.10 Miscellaneous Provisions. The various headings and numbers herein
and the grouping of provisions of this Agreement into separate articles and
paragraphs are for the purpose of convenience only and shall not be considered a
part hereof.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the day and year first above written.
Rubicon Medical Corporation Equity Capital Partners, Inc.
By................................ By...................................
Xxxxxxx X. Xxxxxx President/CEO Xxxxxxxx Xxxxxx, President
10
