EXHIBIT 10.12
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (this "Agreement"), is made and entered into
effective as of August 20, 2003 by and between Guardian Technologies
International, Inc. a Delaware corporation, whose principal executive offices
are located at 00000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx (the
"Company") and Xxxxxxx Xxxxxx & Company Financial Services, Inc., an Iowa
corporation, whose principal executive offices are located at 000 Xxxx Xxxxxx,
Xxxxxx, Xxxx (the "Consultant").
RECITALS:
WHEREAS, Company is a public company whose common stock is currently
quoted on The Nasdaq Stock Market, Inc.'s OTC Bulletin Board under the symbol
"GDTI"; and
WHEREAS, Company desires to engage the services of Consultant to
represent the company, on a best efforts basis, by introducing Company to the
financial community, investors, and/or possible business partners or acquisition
targets; and
WHEREAS, the Consultant is a broker-dealer registered under the
Securities Exchange Act of 1934, as amended, and is a member in good standing of
The National Association of Securities Dealers, Inc.
NOW, THEREFORE, in consideration of the promises and the mutual covenants
and agreements hereinafter set forth and other good and valuable consideration,
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
1. TERM OF CONSULTANCY. Company hereby agrees to retain the Consultant on
a non-exclusive basis to provide certain consulting services to the
Company as more particularly set forth herein below, and the Consultant
hereby agrees to provide such services to the Company. The term of this
Agreement shall commence on August 20, 2003 and shall terminate on
August 20, 2005; provided that this Agreement may be terminated for any
reason or no reason by either party hereto upon fifteen (15) days prior
written notice to the other party hereto.
2. DUTIES OF CONSULTANT. The Consultant agrees that it will use its best
efforts to provide the following specified consulting services through
its officers and employees during the term specified in section 1.
(a) Consult and assist the Company in developing and implementing
appropriate plans and means for presenting the Company and its
business plans, strategy and personnel to the financial community;
and
(b) Introduce the Company to one or more investors who provide financing
in the form of debt and/or equity capital to company's similar to the
Company; and
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(c) Introduce the Company to one or more possible business partners
and/or one or more companies that are compatible with the business of the
Company and may be an appropriate acquisition candidate for the Company
(an "acquisition candidate").
3. CONSULTING AND ACQUISITION FINDER'S FEES.
3.1 (a) It is understood that, in the event Consultant introduces
Company or an affiliate to a lender or equity investor not
already having a preexisting relationship with the Company, or
its affiliates, and the Company obtains any debt or equity
financing from such a lender or equity investor (the
"Financing"), the Company agrees to pay or issue Consultant
for such services at the closing of the Financing, the
following fee (the "Consulting Fee") (i) a fee in the amount
of 6% of total gross Financing provided by such lender or
equity investor introduced to the Company by Consultant, such
fee to be payable in cash, stock or any combination thereof in
the Consultant's discretion, and (ii) a warrant to purchase a
number of shares of the common stock of the Company equal to
4% of the common stock of the Company issued in the offering
by the Company to the investor introduced to the Company by
the Consultant, and such warrant shall be exercisable for a
period of 5 years from the issue date thereof and shall be
exercisable at a price of $1.95 per share. The warrant issued
pursuant to Section 3.1(a)(ii) above, when issued will contain
standard terms and conditions associated with offerings of the
type and size including but not limited to a one time
piggyback registration right. The Consulting Fee will be in
addition to any fees payable by Company to any other
intermediary, if any, which shall be the subject of separate
agreements negotiated between Company and such other
intermediary.
(b) It is also understood that, in the event Consultant introduces
the Company or its affiliates, to an acquisition candidate not
already having a preexisting relationship with the Company,
which Company or its affiliates ultimately acquires, Company
agrees to compensate Consultant for such services by payment
of a "finders fee" in the amount of 3% of total gross
consideration ("Acquisition Finder's Fee") provided by such
acquisition (but excluding any consideration utilized in
connection with such acquisition arising from any Financing
provided by an investor introduced to the Company by the
Consultant and with respect to which Consultant is entitled to
a Consulting Fee), such fee to be payable in cash, stock or
any combination thereof at Consultant's discretion. This
Acquisition Finder's Fee will be in addition to any fees
payable by Company to any other intermediary.
Any obligation to pay a Consulting Fee or Acquisition Finder's Fee
hereunder shall survive the merging, acquisition, or other change in
the form of entity of the Company and to the extent it remains
unfulfilled shall be assigned and transferred to any successor to the
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Company. Notwithstanding the foregoing, any Consulting Fee or
Acquisition Finder's Fee payable hereunder or pursuant to Section 3.4
below shall be contingent on the Company actually receiving the
Financing or acquiring the acquisition candidate, as the case may be,
and provided further that a closing shall have occurred in connection
with the applicable Financing or acquisition. Furthermore, in the event
Consultant elects to receive any compensation hereunder in the form of
shares of common stock, other equity compensation hereunder, or any
warrant to purchase equity securities, Consultant shall execute such
additional reasonable documentation and make such representations in
connection with the issuance thereof as shall assure the availability
of an exemption from the registration requirements under federal and
state securities laws as counsel for the Company shall deem necessary
or appropriate.
3.2 It is further understood that Company, and not Consultant, is
responsible for performing any and all due diligence with
regard to any lender, equity investor or acquisition candidate
introduced to it by the Consultant pursuant to this Agreement
prior to any closing with regard to any such Financing or
acquisition.
3.3 Company agrees that any Consulting Fee or Acquisition Finder's
Fee payable to Consultant hereunder shall be paid in full at
the time a Financing or acquisition is closed and in the case
of any Financing, only upon receipt of such Financing.
3.4 During a period of one year period following the expiration or
termination of this Agreement, and subject to the conditions
set forth in Sections 3.1 through 3.6 of this Agreement, the
Company agrees to pay to the Consultant (i) a Consulting Fee
equal to that outlined in Section 3.1(a) hereinabove, with
respect to any Financing provided to the Company by any lender
or equity purchaser introduced by the Consultant to the
Company during the term of this Agreement, and (ii) an
Acquisition Finder's Fee equal to that outlined in Section
3.1(b) hereinabove with respect to any acquisition by the
Company of any acquisition candidate introduced by the
Consultant to the Company during the term of this Agreement.
3.5 Consultant will notify Company of introductions it makes for
potential sources of financing or acquisitions in a timely
manner (within approximately 3 days of introducing) via
facsimile memo. If Company has a preexisting relationship with
such nominee and believes such party should be excluded from
this Agreement, then Company will notify Consultant within
forty-eight (48) hours of Company's receipt of Consultant's
facsimile to Company of such pre-existing relationship via
facsimile memo. Upon request of Consultant, Company shall
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provide Consultant reasonable evidence of such preexisting
relationship. Notwithstanding the foregoing, Consultant shall
not contact or make any introduction to any third party with
regard to any proposed Financing or acquisition by the Company
without the prior written consent of the Company.
3.6 For purposes of this Agreement, Company acknowledges that
Xxxxx Xxxxxxxx, a licensed Registered Representative
associated with the Consultant, a registered broker dealer, is
the only individual who will be performing the services under
this Agreement and that there will be no other Registered
Representative associated with the Consultant performing
duties under this Agreement, unless specifically requested by
the Company and specifically agreed to by the Consultant.
3. EXPENSES. Consultant agrees to bear and pay for all of its own expenses
incurred in the performance of its duties under this Agreement (such as
telephone, mailing, labor, etc.); provided that the Company shall pay
all extraordinary expenses incurred by the Consultant, such as airline
travel, luncheons or dinners to large groups of investment
professionals, financiers, possible business partners or acquisition
candidates, investor conference calls, print advertisements in
publications and provided further that all such extraordinary expenses
shall have been approved in advance and in writing by the Company prior
to Consultant incurring such expenses.
5. COMPANY EXPENSES. The Company is responsible for preparing any and all
documents related to any Financing, securities offering or acquisition
that the Company and/or its counsel deems necessary in order to assure
the Company's compliance with applicable laws including, but not
limited to, applicable federal and state securities laws; provided that
it is understood that any investor or acquisition candidate introduced
to the Company by the Consultant shall be responsible for its own legal
and other expenses related to the negotiation and preparation of any
documentation in connection with a Financing or acquisition, as the
case may be, unless otherwise expressly agreed to in writing by the
Company.
6. DUE DILIGENCE. The Company agrees to provide copies of due diligence
information regarding the Company including, but not limited to, copies
of such financial statements as it deems necessary or appropriate (it
being understood that the Company files annual reports on Form 10-KSB
and quarterly reports on Form 10-QSB with the SEC including financial
statements of the Company and certain other disclosures which provide
financial and other information regarding the Company) as well as any
other information and/or documentation reasonably requested by any
investor introduced to the Company by the Consultant and/or acquisition
candidates; provided that all such information shall be furnished only
pursuant to a confidentiality and non-disclosure agreement reasonably
satisfactory to the parties thereto.
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7. REPRESENTATIONS AND WARRANTIES.
(a) The Company warrants and represents that all written documents or
materials furnished to Consultant by the Company with respect to
financial affairs, operations, profitability and strategic planning of
the Company are materially accurate as of the date of preparation
thereof, suchfinancial information shall have been prepared within 110
days of delivery to Consultant and Consultant may rely upon the
accuracy thereof without independent investigation.
(b) The Company is not in default in the performance of any obligation,
agreement or condition contained in any debenture, note, loan agreement
or other evidence of indebtedness of the Company.
(c) The Company is duly incorporated and validly existing, and in good
standing as a corporation under the laws of the State of Delaware. The
Company's authorized, issued and outstanding capital stock is as set
forth in the Company's most recent filings with the SEC. It has the
power and the authority to own its property and conduct its business,
present and proposed, as described in the filing and the Company has
full corporate power and authority to enter into this Agreement. The
Company is duly qualified and in good standing as a foreign corporation
in each jurisdiction in which it owns or leases real property or
transacts business requiring such qualification, except where the
failure to so qualify or to be in good standing would not result in a
material adverse effect on the Company.
(d) Any shares of stock and/or any warrant of the Company which may be
issued pursuant to this Agreement, will have been duly and validly
authorized and, when issued and delivered, will be validly issued,
fully paid and non-assessable. The stock and/or any warrant stock, upon
issuance, will not be subject to the preemptive rights of any
shareholder of the Company. Any warrant, when sold, issued and
delivered, will constitute a valid and binding obligation of the
Company enforceable against it in accordance with the terms thereof.
8. INDEMNIFICATION. Each party shall indemnify, defend and hold the other
harmless from and against any and all losses, liabilities, damages,
claims, costs, judgments and expenses and causes of action arising out
of or in connection with this Agreement. If any claim arises to which
the provisions of this Agreement may be applicable, the party against
whom such claim is made shall immediately upon learning of such claim,
notify the other party. The other party may settle or compromise such
claim or retain counsel of its own choosing and control and prosecute
the defense. In no event shall the party against whom the claim is
asserted have the right to pay, settle or compromise such claim without
the prior written consent of the party who may be obligated for such
indemnity. The parties agree that they will not unreasonably withhold
their consent to any such payment, settlement or compromise.
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9. STATUS AS INDEPENDENT CONTRACTOR. Consultant's engagement pursuant to
this Agreement shall be as an independent contractor with regard to the
Company, and not as an employee, officer or other agent of the Company.
Neither party to this Agreement shall represent or hold itself out as
the employer or employee of the other party. Consultant further
acknowledges the consideration provided hereinabove will be, upon
payment or issuance thereof, a gross amount of consideration and that
the Company will not withhold from such consideration any amounts as to
income taxes, social security payments or any other payroll taxes,
unless required to do so under applicable laws. All such income taxes
and other such payments shall be made or provided for by Consultant and
the Company shall have no responsibility or duties regarding such
matters. Neither the Company nor the Consultant possesses the authority
to bind each other in any agreements without the express written
consent of the entity to be bound.
10. ATTORNEY'S FEES. If any legal action or any arbitration or other
proceeding is brought for the enforcement or interpretation of this
Agreement, or because of an alleged dispute, breach, default or
misrepresentation in connection with or related to this Agreement, the
successful or prevailing party shall be entitled to recover reasonable
attorney's fees and other costs in connection with that action or
proceeding, in addition to any other relief to which it or they may be
entitled.
11. WAIVER. The waiver by either party of a breach of any provision of this
Agreement by the other party shall not operate or be construed as a
waiver of any subsequent breach by such other party.
12, NOTICES. All notices, requests, and other communications hereunder
shall be deemed to be duly given if sent by Certified U.S. Mail, Return
Receipt Requested postage prepaid, or by recognized commercial carrier
and should be addressed to the other party at the address as set forth
herein below:
If to the Company, to:
Guardian Technologies International, Inc.
00000 Xxxxxxxx Xxxxxx
Xxxxx #000
Xxxxxx, XX 00000
Fax No. : (000) 000-0000
Attn : Xxxxxx X. Xxxxxx, President
If to the Consultants, to:
Xxxxxxx Fisher& CoMPANY Financial Services, Inc.
Xxxx Xxxxxxxx
0000 Xxxxxxx Xxx
Xxxxxxx Xxxx, XX 00000
Fax No.: ___________
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With a copy to:
Xxxxxx X. Xxxxxxx
000 Xxxx Xxxxxx
Xxxxxx, XX 00000
It is understood that either party may change the address to which
notices for it shall be addressed by providing notice of such change to
the other party in the manner set forth in this paragraph.
13. CHOICE OF LAW, JURISDICTION AND VENUE. This Agreement shall be governed
by, construed and enforced in accordance with the laws of the State of
Iowa. The parties agree that Linn County, IA will be the venue of any
dispute and will have jurisdiction over all parties.
14. COMPLIANCE WITH REGULATION FD. Consultant understands that Company is
subject to certain obligations in connection with the disclosure of
material nonpublic information to certain persons outside the issuer,
including broker-dealers, investment advisers, institutional investment
managers (and their associated persons), investment companies, and
holders of the company's securities (collectively, the "Enumerated
Persons"). In order to help assure Company's compliance with the
provisions of Regulation FD promulgated by the SEC, Consultant will not
disclose to any third party any information that has been furnished to
Consultant by Company without the Company's prior written consent; and,
further, in the event of any proposed disclosure of such information to
any Enumerated Person by Consultant, Consultant shall assure that each
such Enumerated Person agrees to keep such disclosed information in
confidence by executing an appropriate confidentiality or similar
agreement with Company.
15. ENTIRE AGREEMENT. This Agreement contains the entire agreement of the
parties relating to the subject matter hereof. This Agreement and its
terms may not be changed orally but only by an agreement in writing
signed by the party against whom enforcement of any waiver, change,
modification, extension or discharge is sought. Signed facsimile copies
hereof shall be valid and bonding on the parties hereto.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date and year first above written.
Guardian Technologies International, Inc.
(the "Company")
By: /S/ XXXXXX X. XXXXXX
--------------------
Name: Xxxxxx X. Xxxxxx
Title: President
Xxxxxxx Xxxxxx & Company Financial Services, Inc.
(the "Consultant")
By: /S/ XXXXXX X. XXXXXXX /S/ XXXXX XXXXXXXX
--------------------- -------------------
Name: Xxxxxx X. Xxxxxxx By: Xxxxx Xxxxxxxx
Title: CEO Title: Registered Representative
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