Exhibit 10.25
CONSULTING AGREEMENT
This Consulting Agreement (the "Agreement"), effective as of February 18, 2004
is entered into by and between NuTech Digital Inc., a California corporation
(herein referred to as the "Company") and Redwood Consultants, LLC, a California
Limited Liability Company (herein referred to as the "Consultant").
RECITALS
WHEREAS, Company is a publicly-held corporation with its common stock traded on
the OTC BB Market under the symbol NTDL; and
WHEREAS, Company desires to engage the services of Consultant to represent the
Company in investors' communications and public relations with existing
shareholders, brokers, dealers and other investment professionals as to the
Company's current and proposed activities, and to consult with management
concerning such Company activities;
NOW THEREFORE, in consideration of the promises and the mutual covenants and
agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
1. Term of Consultancy. Company hereby agrees to retain the Consultant to act in
a consulting capacity to the Company and the Consultant hereby agrees to provide
services to the Company commencing upon February 18, 2004 and ending on August
18, 2004. The Company may terminate this Agreement at any time during the term
upon five days written notice to the Consultant.
2. Duties of Consultant. The Consultant agrees that it will generally 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, establishing an image for the
Company in the financial community, and creating the foundation for subsequent
financial public relations efforts;
(b) Introduce the Company to the financial community;
(c) With the cooperation of the Company, maintain an awareness during the
term of this Agreement of the Company's plans, strategy and personnel, as they
may evolve during such period, and consult and assist the Company in
communicating appropriate information regarding such plans, strategy and
personnel to the financial community;
(d) Assist and consult the Company with respect to its (i) relations with
stockholders, (ii) relations with brokers, dealers, analysts and other
investment professionals, and (iii) financial public relations generally;
(e) Perform the functions generally assigned to stockholder relations and
public relations departments in major corporations, including responding to
telephone and written inquiries (which may be referred to the Consultant by the
Company); preparing press releases for the Company with the Company's
involvement and approval of press releases, reports and other communications
with or to shareholders, the investment community and the general public;
consulting with respect to the timing, form, distribution and other matters
related to such releases, reports and communications; and, at the Company's
request and subject to the Company's securing its own rights to the use of its
names, marks, and logos, consulting with respect to corporate symbols, logos,
names, the presentation of such symbols, logos and names, and other matters
relating to corporate image;
(f) Upon the Company's direction and approval, disseminate information
regarding the Company to shareholders, brokers, dealers, other investment
community professionals and the general investing public;
(g) Upon the Company's approval, conduct meetings, in person or by
telephone, with brokers, dealers, analysts and other investment professionals to
communicate with them regarding the Company's plans, goals and activities, and
assist the Company in preparing for press conferences and other forums involving
the media, investment professionals and the general investment public;
(h) At the Company's request, review business plans, strategies, mission
statements budgets, proposed transactions and other plans for the purpose of
advising the Company of the public relations implications thereof; and,
(i) Otherwise perform as the Company's consultant for public relations and
relations with financial professionals.
3. Allocation of Time and Energies. The Consultant hereby promises to perform
and discharge faithfully the responsibilities which may be assigned to the
Consultant from time to time by the officers and duly authorized representatives
of the Company in connection with the conduct of its financial and public
relations and communications activities, so long as such activities are in
compliance with applicable securities laws and regulations. Consultant and staff
shall diligently and thoroughly provide the consulting services required
hereunder. Although no specific hours-per-day requirement will be required,
Consultant and the Company agree that Consultant will perform the duties set
forth herein above in a diligent and professional manner. The parties
acknowledge and agree that a disproportionately large amount of the effort to be
expended and the costs to be incurred by the Consultant and the benefits to be
received by the Company are expected to occur within or shortly after the first
two months of the effectiveness of this Agreement. It is explicitly understood
that Consultant's performance of its duties hereunder will in no way be measured
by the price of the Company's common stock, nor the trading volume of the
Company's common stock. It is also understood that the Company is entering into
this Agreement with Redwood
Consultants, LLC ("RWC"), a California Limited Liability Company and not any
individual member of RWC, and, as such, Consultant will not be deemed to have
breached this Agreement if any member, officer or director of RWC leaves the
firm or dies or becomes physically unable to perform any meaningful activities
during the term of the Agreement, provided the Consultant otherwise performs its
obligations under this Agreement.
4. Remuneration. As full and complete compensation for services described in
this Agreement, the Company shall compensate RWC as follows:
4.1 For undertaking this engagement and for other good and valuable
consideration, the Company agrees to issue to the Consultant a "Commencement
Bonus" of 75,000 shares of the Company's Common Stock ("Common Stock") to be
delivered to Consultant within ten (10) business days of the signing of this
Agreement and a $7,500.00 cash retainer fee. This Commencement Bonus shall be
issued to the Consultant immediately following execution of this Agreement and
shall, when issued and delivered to Consultant, be fully paid and
non-assessable. The Company understands and agrees that Consultant has foregone
significant opportunities to accept this engagement and that the Company derives
substantial benefit from the execution of this Agreement and the ability to
announce its relationship with Consultant. The 75,000 shares of Common Stock
issued as a Commencement Bonus and the cash retaining fee, therefore, constitute
payment for Consultant's agreement to consult to the Company and are a
nonrefundable, non-apportionable, and non-ratable retainer; such shares of
common stock are not a prepayment for future services. If the Company decides to
terminate this Agreement for any reason whatsoever, it is agreed and understood
that Consultant will not be requested or demanded by the Company to return any
of the shares of Common Stock paid to it as a Commencement Bonus hereunder.
Further, if and in the event the Company is acquired in whole or in part, during
the term of this Agreement, it is agreed and understood Consultant will not be
requested or demanded by the Company to return any of the 75,000 shares of
Common Stock paid to it hereunder. It is further agreed that if at any time
during the term of this Agreement, the Company or substantially all of the
Company's assets are merged with or acquired by another entity, or some other
change occurs in the legal entity that constitutes the Company, the Consultant
shall retain and will not be requested by the Company to return any of the
75,000 shares.
In addition, the Company will within 10 days issue:
a. 100,000 two year $1.15 purchase warrants
b. 100,000 two year $1.50 purchase warrants
c. 100,000 two year $1.80 purchase warrants
Each warrant is callable at the Company's option if the stock price closes at
least $0.50 cents above the exercise price for 5 consecutive days, and only when
the
shares underlying the warrants have been registered. The warrants will have a
two year life, expiring February 18, 2006.
4.2 For performance under this Agreement on a month-to-month basis,
beginning on April 18, 2004 and continuing on the eighteenth day of May, June,
July and August 2004, so long as this Agreement has not been terminated, the
Company shall pay a monthly Consultancy Fee consisting of 45,000 shares of the
Company's Common Stock. If the Consultant receives notice of termination of this
Agreement on or before the tenth day of any month during the term, no
Consultancy Fee shall be due or payable for that month or for any month
following the termination date.
4.3 The Commencement Bonus shares issued pursuant to this agreement shall
be issued in the name of Redwood Consultants, LLC Tax ID # 00-000-0000.
4.4 With each transfer of shares of Common Stock to be issued pursuant to
this Agreement (collectively, the "Shares"), Company shall cause to be issued a
certificate representing the Common Stock and a written opinion of counsel for
the Company stating that said shares are validly issued, fully paid and
non-assessable and that the issuance and eventual transfer of them to Consultant
has been duly authorized by the Company. Company warrants that all Shares issued
to Consultant pursuant to this Agreement shall have been validly issued, fully
paid and non-assessable and that the issuance and any transfer of them to
Consultant shall have been duly authorized by the Company's board of directors.
4.5 Consultant acknowledges that the shares of Common Stock to be issued
pursuant to this Agreement (collectively, the "Shares") have not been registered
under the Securities Act of 1933, and accordingly are "restricted securities"
within the meaning of Rule 144 of the Act. As such, the Shares may not be resold
or transferred unless the Company has received an opinion of counsel reasonably
satisfactory to the Company that such resale or transfer is exempt from the
registration requirements of that Act.
4.6 In connection with the acquisition of Shares hereunder, the Consultant
represents and warrants to the Company, to the best of its/his knowledge, as
follows:
(a) Consultant acknowledges that the Consultant has been afforded
the opportunity to ask questions of and receive answers from duly authorized
officers or other representatives of the Company concerning an investment in the
Shares, and any additional information which the Consultant has requested.
(b) Consultant's investment in restricted securities is reasonable
in relation to the Consultant's net worth, which is in excess of ten (10) times
the Consultant's cost basis in the Shares. Consultant has had experience in
investments in restricted and publicly traded securities, and Consultant has had
experience in investments in speculative securities and other investments which
involve the risk of loss of investment. Consultant acknowledges that an
investment in the Shares is speculative and involves the risk of loss.
Consultant has the requisite knowledge to assess the relative merits and risks
of this investment without the necessity of relying upon other advisors, and
Consultant can afford the risk of loss of his entire investment in the Shares.
Consultant is (i) an accredited investor, as that term is defined in Regulation
D promulgated under the Securities Act of 1933, and (ii) a purchaser described
in Section 25102 (f) (2) of the California Corporate Securities Law of 1968, as
amended.
(c) Consultant is acquiring the Shares for the Consultant's own
account for long-term investment and not with a view toward resale or
distribution thereof except in accordance with applicable securities laws.
4.7 Additionally, for a period of two years after the effective date
hereof, should the Company make any public offering of its securities pursuant
to an effective registration statement under the Securities Act of 1933 (with
the exception of an offering included on Form S-4 or Form S-8), as amended,
Consultant shall be entitled, and the Company agrees, to include in such
registration any or all of the common stock given to Consultant by the Company
as consideration hereunder [commonly referred to as "Piggyback Registration
Rights"]. All such registration rights shall be subject to customary market
stand-off and underwriter cutback provisions.
5. Intentionally left blank.
6. Non-Assignability of Services. Consultant's services under this contract are
offered to Company only and may not be assigned by Company to any entity with
which Company merges or which acquires the Company or substantially all of its
assets. In the event of such merger or acquisition, all compensation to
Consultant herein under the schedules set forth herein shall remain due and
payable, and any compensation received by the Consultant may be retained in the
entirety by Consultant, all without any reduction or pro-rating and shall be
considered and remain fully paid and non-assessable. Notwithstanding the
non-assignability of Consultant's services, Company shall assure that in the
event of any merger, acquisition, or similar change of form of entity, that its
successor entity shall agree to complete all obligations to Consultant,
including the provision and transfer of all compensation herein, and the
preservation of the value thereof consistent with the rights granted to
Consultant by the Company herein, and to Shareholders.
7. Expenses. Consultant agrees to pay for all its expenses (phone, mailing,
labor, etc.), other than extraordinary items (travel required by/or specifically
requested by the Company, luncheons or dinners to large groups of investment
professionals, mass faxing to a sizable percentage of the Company's
constituents, investor conference calls, print advertisements in publications,
etc.).
Extraordinary items and all expenses in excess of $500.00 must be approved by
the Company in writing prior to its incurring an obligation for reimbursement.
8. Indemnification. (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 accurate and Consultant may rely upon the accuracy thereof without
independent investigation. The Company will protect, indemnify and hold harmless
Consultant against any claims or litigation including any damages, liability,
costs and reasonable attorney's fees as incurred with respect thereto resulting
from Consultant's communication or dissemination of any said written
information, documents or materials excluding any such claims or litigation
resulting from Consultant's communication or dissemination of information not
provided or authorized, in writing, by the Company.
(b) The Consultant warrants and represents that the Consultant will use
only information provided in writing by the Company with respect to the
performance of its services under this Agreement. The Consultant will protect,
indemnify and hold harmless the Company against any claims or litigation
including any damages, liability, costs and reasonable attorney's fees as
incurred with respect thereto resulting from Consultant's communication or
dissemination of any information, documents or materials not provided or
authorized, in writing, by the Company.
9. Representations. Consultant represents that it is not required to maintain
any licenses and registrations under federal or any state regulations necessary
to perform the services set forth herein. Consultant acknowledges that, to the
best of its knowledge, the performance of the services set forth under this
Agreement will not violate any rule or provision of any regulatory agency having
jurisdiction over Consultant. Consultant further acknowledges that it is not a
securities Broker Dealer or a registered investment advisor. Company
acknowledges that, to the best of its knowledge, that it has not violated any
rule or provision of any regulatory agency having jurisdiction over the Company.
Company acknowledges that, to the best of its knowledge, Company is not the
subject of any investigation, claim, decree or judgment involving any violation
of the SEC or securities laws.
10. Legal Representation. The Company acknowledges that it has been represented
by independent legal counsel in the preparation of this Agreement. Consultant
represents that it has consulted with independent legal counsel and/or tax,
financial and business advisors, to the extent the Consultant deemed necessary.
11. Status as Independent Contractor. Consultant's engagement pursuant to this
Agreement shall be as independent contractor, and not as an employee, officer or
other agent of the Company. Neither party to this Agreement shall
represent or hold itself out to be the employer or employee of the other.
Consultant further acknowledges the consideration provided hereinabove is 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. All such income taxes and other such payment shall be made
or provided for by Consultant and the Company shall have no responsibility or
duties regarding such matters. Neither the Company or the Consultant possess the
authority to bind each other in any agreements without the express written
consent of the entity to be bound.
12. Attorney's Fee. 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 attorneys' 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.
13. 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.
14. Notices.
Unless otherwise specifically provided in this Agreement, all notices or other
communications (collectively and severally called "Notices") required or
permitted to be given under this Agreement, shall be in writing, and shall be
given by: (A) personal delivery (which form of Notice shall be deemed to have
been given upon delivery), (B) by telegraph or by private airborne/overnight
delivery service (which forms of Notice shall be deemed to have been given upon
confirmed delivery by the delivery agency), (C) by electronic or facsimile or
telephonic transmission (which forms of Notice shall be deemed delivered upon
confirmed transmission or confirmation of receipt), or (D) by mailing in the
United States mail by registered or certified mail, return receipt requested,
postage prepaid (which forms of Notice shall be deemed to have been given upon
the third {3rd} business day following the date mailed).
To the Company:
NuTech Digital Inc.
Xxx Xxxxxx, President
0000 Xxxxxx Xxx.
Xxx Xxxx, XX 00000
Facsimile No.000-000-0000
To the Consultant:
Redwood Consultants, LLC
Xxxx Xxxxxxxxx, Managing Director
000 Xxx Xxxxx Xxxx Xxxx.
Xxx Xxxxx Xxxx, XX 00000
Facsimile No.000-000-0000
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.
15. Choice of Law, Jurisdiction and Venue. This Agreement shall be governed by,
construed and enforced in accordance with the laws of the State of California.
The parties agree that Los Angeles, CA. will be the venue of any dispute and
will have jurisdiction over all parties.
16. Arbitration. Any controversy or claim arising out of or relating to this
Agreement, or the alleged breach thereof, or relating to Consultant's activities
or remuneration under this Agreement, shall be settled by binding arbitration in
California, in accordance with the applicable rules of the American Arbitration
Association, and judgment on the award rendered by the arbitrator(s) shall be
binding on the parties and may be entered in any court having jurisdiction as
provided by Paragraph 15 herein. The provisions of Title 9 of Part 3 of the
California Code of Civil Procedure, including section 1283.05, and successor
statutes, permitting expanded discovery proceedings shall be applicable to all
disputes that are arbitrated under this paragraph.
17. Complete 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.
AGREED TO:
"Company" NUTECH DIGITAL, INC
Date: 2/19/2004 By: /s/Xxx Xxxxxx
---------------------------------------
Xxx Xxxxxx, President
"Consultant" REDWOOD CONSULTANTS, LLC
Date: 2/19/2004 By:/s/Xxxx Xxxxxxxxx
---------------------------------------
Xxxx Xxxxxxxxx, Managing Director
