INDEPENDENT CONTRACTOR FEE/CONSULTING AGREEMENT
---------------------------------------------
THIS AGREEMENT is made and entered into on January 5, 2004 by and between
MicroSignal Corporation, a Nevada corporation ("MSC") and Xxxxx X. Xxxxxxx,
Esq., a resident of Las Vegas, Nevada ("Xxxxxxx").
RECITALS
---------
WHEREAS, MSC is a public company trading on the OTCBB under the symbol
"MSGL";
WHEREAS, Xxxxxxx is knowledgeable in the areas of business operations of
MSC and possesses legal skills and experience in commercial litigation,
corporate law and business strategy;
WHEREAS, Xxxxxxx has provided valuable assistance and advice regarding the
removal of Xxxxxxx XxXxxxxxx from the position of president and as a director of
MSC and assisted legal counsel in Pennsylvania regarding claims asserted against
MSC by Xxxxxx Xxxxx;
WHEREAS, MSC wishes to compensate Xxxxxxx for all of his services up until
the date of this Agreement;
WHEREAS, MSC wishes to terminate any other retention agreements between MSC
and Xxxxxxx except for Xxxxxxx' representation of MSC in connection with a suit
by MSC against Xxxxxxx XxXxxxxxx in the Eighth Judicial District Court of
Nevada;
WHEREAS, MSC wishes to protect itself and its officers and/or directors by
asserting the attorney/client privilege where appropriate;
WHEREAS, MSC and Xxxxxxx intend that this Agreement and the services
performed hereunder have been made, requested and performed in such a manner
that this Agreement shall be a "written compensation agreement" as defined in
Rule 405 of the Securities and Exchange Commission ("Commission") pursuant to
which MSC may issue "freely tradable" shares (except as may be limited by
"affiliate" status) of its common stock as payment for services rendered
pursuant to an S-8 Registration Statement to be filed with the Commission by
MSC; and
WHEREAS, Xxxxxxx is willing to accept the compensation recited herein as
payment for services previously rendered and is willing to terminate his other
agreements with MSC as recited herein.
1
AGREEMENT
------
NOW, THEREFORE, in consideration of the promises and the mutual agreements
hereinafter set forth, the parties hereto agree as follows:
1. ENGAGEMENT. MSC has retained Xxxxxxx to perform various management and
advisory and legal services for MSC (the "Consulting Services").
2. DUTIES EXPRESSLY EXCLUDED. None of the services provided by Xxxxxxx for
which he is receiving the compensation recited herein involved capital formation
and/or public relation services to MSC inclusive of but not limited to (i)
direct or indirect promotion of MSC's securities; (ii) assistance in making of a
market in MSC's securities; and/or (iii) assistance in obtaining debt and/or
equity financing.
3. TERM. Xxxxxxx is being compensated for services performed from the time
period of July 1, 2003 through the date of this Agreement.
4. CONSIDERATION. In addition to the consideration that Xxxxxxx has
already received pursuant to his Independent Consulting Agreement dated August
27, 2003 (which includes 1,500,000 shares of MSC's unrestricted common stock and
1,000,000 shares of restricted MSC stock), Xxxxxxx shall also receive from MSC a
fee consisting of 1,000,000 shares of MSC's unrestricted common stock shares of
the MSC's common stock, par value $0.01 per share (the "Common Stock"), covered
by a registration statement of the company under the Securities Act of 1933, as
amended (the "Act"), on Form S-8 (the "S-8 Registration Statement") to be
prepared by MSC at its expense and filed by MSC with the SEC via XXXXX as soon
as practicable. MSC covenants that the S-8 Registration Statement shall be kept
effective until such time as all of the S-8 shares have been sold pursuant
thereto. MSC hereby further agrees to exert its best efforts to cause as
expeditiously as is practicable all of the S-8 shares to be certificated and
credited by the Depository Trust Company ("DTC") to the securities brokerage
account of Consultant specified by Consultant. These shares shall be paid in
advance, as consideration for the services already rendered. These shares shall
be issued immediately. Xxxxxxx hereby acknowledges that once these shares are
transferred to him by MSC that he shall be paid in full for all of his services
for the time period July 1, 2003 through the date of this agreement, subject to
his rights relating to his ownership of the 1,000,000 shares of restricted stock
previously issued to him as referred to in the following Paragraph.
4.1. AFFIRMATION OF XXXXXXX' RESTRICTED STOCK. MSC acknowledges and
ratifies the validity of Xxxxxxx' One Million Shares of restricted stock
represented by stock certificate no. 6229 and MSC will do nothing to interfere
with Xxxxxxx' ownership rights in and to that stock and will fully cooperate
with Xxxxxxx in the exercise of all of his rights under that stock. Such acts
include, but are not limited to: (1) instructing the company's transfer agent to
remove the restricted legend from that stock at any time after one year from the
date of issuance of that stock; (2) signing all documents necessary to comply
with state and federal regulations regarding the issuance of that stock
including, but not limited to, any registration filings with the SEC; and (3)
paying all legal and accounting fees associated with the issuance and
registration of that restricted stock.
2
5. TERMINATION OF OPTION AND OTHER CONTINGENT-FEE AGREEMENT. The parties
to this Agreement agree that when Xxxxxxx receives the One Million shares of
unrestricted stock from MicroSignal in his account with ACAP Financial (or a
similar commercial brokerage firm) pursuant to the terms of this Agreement, the
Option described under Paragraph 4 (C) of the Independent Consulting Agreement
dated August 27, 2003 shall be deemed satisfied, terminated and of no further
legal effect.
6. TERMINATION OF CONTINGENT-FEE AGREEMENT. The parties to this Agreement
also agree that when Xxxxxxx receives the One Million shares of unrestricted
stock from MicroSignal in his account with ACAP Financial (or a similar
commercial brokerage firm) pursuant to the terms of this Agreement, the
contingent-fee agreement between MSC and Xxxxxxx dated September 8, 2003 shall
be terminated and of no further legal effect.
7. XXXXXXX' LIABILITY. In the absence of gross negligence or willful
misconduct on the part of Xxxxxxx or Xxxxxxx breach of any terms of this
Agreement, Xxxxxxx shall not be liable to MSC or to any officer, director,
employee, stockholder or creditor of MSC, for any act or omission in the course
of or in connection with the previous rendering or providing of services
hereunder. Except in those cases where the gross negligence or willful
misconduct of Xxxxxxx or the breach by Xxxxxxx of any terms of this Agreement is
alleged and proven, MSC agrees to defend, indemnify, and hold harmless from and
against any and all reasonable costs, expenses and liability (including
reasonable attorney's fees paid in the defense of Xxxxxxx) which may in any way
result from services previously rendered by Xxxxxxx pursuant to or in any
connection with this Agreement.
8. REPRESENTATIONS. Xxxxxxx makes the following representations:
X. Xxxxxxx has no prior or existing legally binding obligations
that are in conflict with his entering into this Agreement;
X. Xxxxxxx shall not offer or make payment of any consideration
to brokers, dealers or others for purposes of inducing the
purchase, making of a market or recommendation for the
purchase of MSC's securities;
X. Xxxxxxx is not currently the subject of an investigation or
inquiry by the Securities and Exchange Commission, the NASD,
or any state securities Commission;
X. Xxxxxxx' activities and operations fully comply with now and
will comply with in the future all applicable state and
federal securities laws and regulations; and
X. Xxxxxxx understands that, as a result of his services, it may
come to possess material non-public information about MSC, and
that he has implemented internal control procedures designed
to reasonably to insure that neither he nor his employees,
agents, Xxxxxxx or affiliates, trade in the securities of
client companies while in possession of material non-public
information.
3
9. MSC'S REPRESENTATIONS. MSC makes the following representations:
A. MSC is in good standing in its state of incorporation.
10. ASSERTION OF ATTORNEY/CLIENT PRIVILEGE. Should MSC and/or any of its
officers, directors or shareholders become the focus or target of a criminal
investigation or become involved in any kind of civil or administrative dispute,
to the extent applicable MSC hereby asserts its right and privilege to keep all
confidential communications protected under the attorney/client privilege; and
Xxxxxxx hereby agrees to honor said privilege to the fullest extent allowed
under law.
11. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between MSC and Xxxxxxx and supersedes any and all negotiations,
prior discussions and preliminary and prior agreements and understandings
related to the primary subject matter hereof. This Agreement shall not be
modified except by written instrument duly executed by each of the parties
hereto.
12. WAIVER. No waiver of any provisions of this Agreement shall be deemed,
or shall constitute a waiver of any other provisions, nor shall any waiver
constitute a continuing waiver. No waiver shall be binding unless executed in
writing by the party making the waiver.
13. ASSIGNMENT AND BINDING EFFECT. This Agreement and the rights hereunder
may not be assigned by MSC (except by operation of law or merger) but shall be
freely assignable by Xxxxxxx; and it shall be binding upon and inure to the
benefits of the parties and their respective successors, assigns and legal
representatives.
14. GOVERNING LAW AND ATTORNEY'S FEES. In the event there is a dispute
regarding this Agreement, it shall be governed by Nevada law. Should litigation
arise in regard to this Agreement, the prevailing party shall be entitled to
costs and the attorney's fees actually incurred. The term "prevailing party" as
used in this paragraph means the party that is entitled to recover costs of
suit.
15. SEVERABILITY. Every provision of this Agreement is intended to be
severable. If any term or provision hereof is deemed unlawful or invalid for any
reason whatsoever, such unlawfulness or invalidity shall not affect the validity
of this Agreement.
16. HEADINGS. The headings of this Agreement are inserted solely for the
convenience of reference and are not part of, and are not intended to govern,
limit or aid in the construction of any term or provision hereof.
17. FURTHER ACTS. Each party agrees to perform any further acts and
execute and deliver any further documents that may be reasonably necessary to
carry out the provisions and intent of this Agreement.
4
18. ACKNOWLEDGMENT CONCERNING COUNSEL. Each party acknowledges that it had
the opportunity to employ separate and independent counsel of its own choosing
in connection with this Agreement.
19. INDEPENDENT CONTRACTOR STATUS. There is no relationship, partnership,
agency, employment, franchise or joint venture between the parties. The parties
have no authority to bind the other or incur any obligations on their behalf.
20. COUNTERPARTS. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto duly execute this Agreement as of
the date first written above.
MicroSignal Corporation Xxxxx X. Xxxxxxx, Esq.
By:/s/ Xx. Xxxxxxxx Madoff By:/s/ Xxxxx Xxxxxxx
Its President/CEO
5
