EXHIBIT 10.5
CLIENT SERVICE AGREEMENT
This Agreement is made and entered into this 4th day of September, 1996 between
Great Deals, Inc., located at 00 Xxxxxx Xxxx Xxxx, Xxxxx Xxxx, XX 00000,
hereinafter referred to as "Great Deals", and Electronics Communications Corp.,
located at 00 Xxxx Xxxx, Xxxxxxxxx, XX 00000, hereinafter referred to as "ECC."
WITNESSETH:
Whereas, Great Deals is a public relations firm specializing in the
dissemination of information about publicly traded companies, and
Whereas, ECC is publicly held with its common stock trading on one or more stock
exchanges including The NASDAQ Stock Market, and
Whereas, ECC desires to publicize itself with the intention of making its name
and business better known throughout the brokerage community and among
investors, and
Whereas Great Deals is willing to accept ECC as a client,
NOW THEREFORE, in consideration of the mutual covenants herein contained, it is
agreed:
1. ENGAGEMENT: ECC hereby engages Great Deals to publicize ECC to brokers,
prospective investors and shareholders, and subject to further provisions of
this Agreement. Great Deals hereby accepts ECC as a client and agrees to
publicize it as described in Section 2 of this Agreement, but subject to the
further provisions of this Agreement.
2. MARKETING PROGRAM: Consists of the following components:
(A) Great Deals will review and analyze all aspects of ECC's goals and make
recommendations on feasibility and achievment of desired goals.
(B) Great Deals will review all of the general information and recent
filings from ECC and produce at least 80,000 copies of a valid, professionally
written, Independent Analysts Research Report describing ECC's business. The
research Report will be prepared in brokerage style format and will be utilized
by Great Deals in educating the brokerage community regarding ECC's story and
business opportunity.
(C) Great Deals will provide through their network, firms and brokers
interested in participating with Great Deals in promoting ECC and schedule and
conduct the necessary due diligence and obtain the required approvals necessary
for those firms to participate. Great Deals will also interview and make
determinations on any firms or brokers referred by ECC with regard to their
participation.
(D) Great Deals will schedule at least two (2) broker dealer conferences
per month over the next year, commencing from the date of this Agreement. These
conferences, the expenses for which ECC shall alone be responsible, are itended
to tell ECC's story to the investment community and expose ECC to as many
brokers, dealers, and potential market makers as possible. Great Deals will
prepare all necessary documents, handouts, or other such printed matter as may
be required to properly conduct such meetings. ECC agrees to produce and make
available to Great Deals copies of a audio, vidio, or slide presentation
suitable for investment professionals.
(E) Great Deals will use its best efforts to obtain for ECC significant
exposure on national financial radio programming, in independent financial
newsletters, and through on-line facsimile internet and other broadcast media
services.
(F) Great Deals will bring in at least two (2) market makers that will
actively make a market in ECC's stock.
(G) Great Deals will undertake special projects related to promoting ECC's
business planning and will assist in the preperation of business plans and
financial models and projections over the next two (2) years, commencing from
the date of this Agreement.
3. TIME OF 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 twenty-four (24) months. Upon completion this
Agreement shall automatically renew for an additional 1 year term, pending
agreement of mutually acceptable terms between Great Deals and ECC.
4. COMPENSATION AND EXPENSES: In consideration of the services to be
performed by Great Deals, ECC agrees to pay compensation to Great Deals an
amount equal to the greater of $752,000 or 2,300,000 shares of ECC's common
stock which shall be payable in freely traded shares of ECC which are to be
issued in the following manner:
Xxxxxx Xxxxxx 1,150,000 shares
Xxxx Xxxxxx 1,150,000 shares
Great Deals shall pay and be responsible for all expenses it incurs except for
expenses specifically related to broker or investment conferences and meetings,
printing of business plans and financial models, slide, video, audio production
costs, or expenses related to special projects.
5. GUARANTY: In consideration of the payment of $752,000/2,300,000 shares
from ECC to Great Deals, Great Deals hereby guarantees that through Great
Deals' promotional efforts it will bring in at least four (4) new market makers
to support the Company's common stock. If Great Deal's does not meet this
commitment, it will repay either $752,000 or 2,300,000 shares of common stock
to ECC.
6. REPRESENTATIONS AND WARRANTIES OF ECC: ECC represents and warrants to
Great Deals, each representation and warranty being deemed to be material that:
(A) ECC will cooperate fully and timely with Great Deals to enable Great
Deals to perform its obligation under this Agreement.
(B) The execution and performance of this Agreement by ECC has been duly
authorized by the Board of Directors of ECC in accordance with applicable law.
(C) The performance of ECC under this Agreement will not violate any
applicable court decree, law, or regulation, nor will it violate any provisions
of the organizational documents of ECC or any contractual obligations by which
ECC may be bound.
(D) ECC will promptly deliver to Great Deals a list of brokers and market
makers of ECC's securities which have been following ECC.
7. EARLY TERMINATION: If ECC fails to fulfill its obligations as described
herein, or fails to make timely payment of the compensation set forth herein,
Great Deals shall have the right to terminate this Agreement and any further
performance by Great Deals under this Agreement shall no longer be required.
8. LIMITATION OF LIABILITY: If Great Deals fails to perform its services
hereunder, its entire liability to ECC shall not exceed the lessor of (a) the
amount of cash/securities compensation has received from ECC under the terms of
this Agreement or (b) the actual damage to ECC as a result of such
non-performance. IN NO EVENT WILL ECC BE LIABLE FOR ANY INDIRECT SPECIAL OR
CONSEQUENTIAL DAMAGES NOR FOR ANY CLAIM AGAINST ECC BY ANY PERSON OR ENTITY
ARISING FROM OR IN ANY WAY RELATED TO THIS AGREEMENT.
9. OWNERSHIP OF MATERIALS: All right, title, and interest in and to material to
be produced by Great Deals in connection with the contract and other services to
be rendered under this Agreement shall become the sole property of ECC. Great
Deals shall be entitled to at least one (1) copy of the materials it produces
for ECC.
10. CONFIDENTIALITY: Until such time as the same may become publicly known,
Great Deals agrees that any and all information transmitted to it from ECC are
to be considered confidential and Great Deals agrees to hold all information
confidential and not to disclose such information to any person, company or
entity without the prior written approval of ECC, except as may be reasonably
required in the performance of Great Deals obligations as described herein. Upon
completion of its duties as described herein, Great Deals agrees to return all
materials furnished to it by ECC to ECC.
11. 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 delivered by personal
delivery, certified mail, express mail, or by national overnight courier
service. Notices will be deemed given upon the earlier of actual receipt or
three (3) business days after being mailed or delivered to such courier service.
Notice shall be addressed to Great Deals at:
Great Deals, Inc.
00 Xxxxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
Attention: Xxxx Xxxxxxxxx, Esq.
Xxxxxx Xxxxxx
Xxxx Xxxxxx
and to ECC at:
Electronics Communications Corp.
00 Xxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxx
Any notices to be given hereunder will be effective if executed and sent by the
attorneys for the parties giving such notice, and in connection therewith the
parties and under 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.
12. SEPARABILITY: If one or more of the provisions of this Agreement shall be
held invalid, illegal, or unenforceable, and provided that such provision 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.
13. ARBITRATION: Any controversy or claim arising out of or relating to the
Agent Agreement, or the breach thereof, shall be setteled by arbitration in
accordance with the commercial arbitration rules of the American Arbitration
Association, and judgment upon the award rendered by the arbitrator(s) may be
entered in any court having jurisdiction thereof.
14. MISCELLANEOUS:
(A) EFFECTIVE DATE OF REPRESENTATIONS: Shall be no later than the date
Great Deals is prepared to commence its promotional activities pursuant to the
contract.
(B) GOVERNING LAW: This Agreement shall be governed by and interpreted
under the laws of the State of New Jersey where ECC has been conducting its
business and this Agreement has been accepted by Great Deals.
(C) CURRENCY: In all instances, references to dollars shall be deemed to be
United States Dollars.
(D) MULTIPLE COUNTERPARTS: This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original.
CONFIRMED AND AGREED ON THE 4TH DAY OF SEPTEMBER, 1996
ELECTRONICS COMMUNICATIONS CORP.
By:/s/ Xxx Xxxxxx
--------------------------------------
Xxx Xxxxxx, Executive Vice President
CONFIRMED AND AGREED ON THE 4TH DAY OF SEPTEMBER, 1996
GREAT DEALS, INC.
By:/s/Xxxx Xxxxxxxxx
--------------------------------------
Xxxx Xxxxxxxxx
