EXHIBIT 10.9
PROFESSIONAL LEGAL SERICES AGREEMENT
THIS AGREEMENT is entered into as of August 1, 2001 by DynEco Corporation,
a corporation organized and existing under the laws of the State of Minnesota
having its principal place of business at 000 Xxxxxxxxxxxxx Xxxxx, Xxxxxxxxx, XX
00000 ("Company")and Xxxx X. Xxxxx, Esq. having his principal place of business
Suite 201, 0000 Xxxxxx Xxxxxx Xxxxx, Xxxxxxxxxxx, XX 00000 ("Advisor").
WITNESSETH:
In consideration of the premises and mutual covenants hereinafter
contained, the parties hereto agree as follows:
1. Services. The Advisor has and will provide legal counsel and advice
with respect to the Company's general corporate affairs, including its
organizational structure, legal affairs, compliance requirements and stockholder
matters through completion of its 2001 annual stockholders' meeting and
preparation of its SEC Rule 15c2-11.
2. Fees and Expenses. Company shall pay Advisor a legal fee in the form of
unrestricted stock. The Company will therefore issue Advisor One Hundred Hundred
Thousand (100,000) shares of unrestricted Common Stock, $.01 par value,
("Registrable Securities"} upon signing of this Agreement. In addition, the
Company will reimburse Advisor for out of-pocket expenses and costs advanced by
him upon presentation of an invoice.
3. Registration Rights.
3.1 Required Registration. If the Company shall be requested by
Advisor to effect the Registration of Registrable Securities, then
the Company shall shall promptly use its best efforts to effect the
Registration of the Registrable Securities under Form S-8 that the
Company has been requested to Register for disposition as described
in the request of Advisor; provided however, that the Company shall
not be obligated to effect any Registration except in accordance
with the following provisions:
(a) The Company shall not be obligated to file and cause to become
effective more than one (1) registration statement in which
Registrable Securities are Registered pursuant to this Section
3.1.
3.2 Piggyback Registration.
(a) Each time that the Company proposes to Register a public
offering solely of its Common Stock (not including an offering
of common stock issuable upon conversion or exercise of other
securities), other than pursuant to a Registration Statement
on Form S-8 or similar or successor forms
(collectively,"Excluded Forms"), the Company shall promptly
give written notice of such proposed Registration to Advisor
and/or holders of the Registrable Securities, which shall
offer such Advisor and/or holders the right to request
inclusion of any Registrable Securities in the proposed
Registration.
(b) Each holder of Registrable Securities shall have ten (10) days
or such longer period as shall be set forth in the notice from
the receipt of such notice to deliver to the Company a written
request specifying the number of shares of Registrable
Securities such holder intends to sell and the holder's
intended plan of disposition.
(c) In the event that the proposed Registration by the Company is,
in whole or in part, an underwritten public offering of
securities of the Company, any request under Section 3.2 (b)
may specify that the Registrable Securities be included in the
underwriting on the same terms and conditions as the shares of
Common Stock, if any, otherwise being sold through
underwriters under such Registration.
(d) Upon receipt of a written request pursuant to Section 3.2 (b),
the Company shall promptly use its best efforts to cause all
such Registrable Securities to be Registered, to the extent
required to permit sale or disposition as set forth in the
written request.
3.3 Preparation and Filing. If and whenever the Company is under an
obligation pursuant to the provisions of this paragraph 3 to use its
best efforts to effect the Registration of any Registrable
Securities, the Company shall, as expeditiously as practicable:
(a) prepare and file with the Commission a Registration Statement
with respect to such Registrable Securities and use its best
efforts to cause such Registration Statement to become and
remain effective in accordance with Section 3.4(b) hereof,
keeping Advisor and/or holders advised as to the initiation,
progress and completion of the Registration;
(b) prepare and file with the Commission such amendments and
supplements to such Registration Statements-and the prospectus
used in connection therewith as may be necessary to keep such
Registration Statement effective for nine months and to comply
with the provisions of the Securities Act with respect to the
sale or other disposition of all Registrable Securities
covered by such registration statement;
(c) furnish to the Advisor and/or holders such number of copies of
any summary prospectus or other prospectus, including a
preliminary prospectus, in conformity with the requirements of
the Securities Act, and such other documents as such Advisor
and/or holders may reasonably request in order to facilitate
the public sale or other disposition of such Registrable
Securities;
(d) use its best efforts to register or qualify the Registrable
Securities covered by such registration statement under the
securities or blue sky laws of such jurisdictions as each of
the Advisor and/or holders shall reasonably request and do any
and all other acts or things which may be necessary or
advisable to enable such holder to consummate the public sale
or other disposition in such jurisdictions of such Registrable
Securities; provided however, that the Company shall not be
required to consent to general service of process, qualify to
do business as a foreign corporation where it would not be
otherwise required to qualify or submit to liability for state
or local taxes where it is not liable for such taxes; and (e)
at any time when a prospectus covered by such Registration
Statement is required to be delivered under the Securities Act
within the appropriate period mentioned in Section 3.3 (b)
hereof, notify each of the Advisor and/or holders of the
happening of any event as a result of which the prospectus
included in such Registration, as then in effect, includes an
untrue statement of a material fact or omits 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 then existing and, at the request of such
seller, prepare, file and furnish to such seller a reasonable
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, 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 statement therein not misleading in the
light of the circumstances then existing.
1.5 Expenses. The Company shall pay all Registration Expenses incurred by
the Company in complying with this Section 1; provided however that all
underwriting discounts and selling commissions applicable to the Registrable
Securities covered by registrations effected pursuant to section 1.2 hereof
shall be borne by the seller or sellers thereof, inproportion to the number of
Registrable Securities sold by such seller or sellers.
1.6 Information Furnished by Purchaser. It shall be a condition precedent
to the Company's obligations under this Agreement as to any Selling Shareholder
that each Selling Shareholder furnish to the Company in writing such information
regarding such Selling Shareholder and the distribution proposed by such Selling
Shareholder as the Company may reasonably request.
1.7 Indemnification.
1.7.1 Company's Indemnification of Purchasers. The Company shall indemnify
each Selling Shareholder, and each underwriter thereof, if any, and
each of its officers, directors, constituent partners, and each
person who controls such underwriter, against all claims, losses,
damages or liabilities (or actions in respect thereof) suffered or
incurred by any of them, to the extent such claims, losses, damages
or liabilities arise out of or are based upon any untrue statement
(or alleged untrue statement) of a material fact contained in any
prospectus or any related Registration Statement incident to any
such Registration, or any omission (or alleged omission) to state
therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, or any violation by
the Company of any rule or regulation promulgated under the
Securities Act applicable to the Company and relating to actions or
inaction required of the Company in connection with any such
Registration; and the Company will reimburse each such Selling
Shareholder, each such underwriter, each of their officers,
directors and constituent partners and each person who controls any
such underwriter, for any legal and any other expenses as reasonably
incurred in connection with investigating or defending any such
claim, loss, damage, liability
or action; provided however, that the indemnity contained in this
Section 1.7.1 shall not apply to amounts paid in settlement of any
such claim, loss, damage, liability or action if settlement is
effected without the consent of the Company (which consent shall not
unreasonably be withheld); and provided however, that the Company
will not be liable in any such case to the extent that any such
claim, loss, damage, liability or expense arises out of or is based
upon any untrue statement or omission based upon written information
furnished to the Company by such Selling Shareholder, underwriter,
controlling person or other indemnified person and stated to be for
use in connection with the offering of securities of the Company.
1.7.2 Selling Shareholder's Indemnification of Company. Each Selling
Shareholder shall indemnify the Company, each of its directors and
officers, each underwriter, if any, of the Company's Registrable
Securities covered by a Registration Statement, each person who
controls the Company or such underwriter within the meaning of the
Securities Act, and each other Selling Shareholder, each of its
officers, directors and constituent partners and each person
controlling such other Selling Shareholder, against all claims,
losses, damages and liabilities (or actions in respect thereof)
suffered or incurred by any of them and arising out of or based upon
any untrue statement (or alleged untrue statement) of a material
fact contained in such Registration Statement or related prospectus,
or any omission (or alleged omission) to state therein a material
fact required to be stated therein or necessary to make the
statements therein not misleading, or any violation by such Selling
Shareholder of any rule or regulation promulgated under the
Securities Act applicable to such Selling Shareholder and relating
to actions or inaction required of such Selling Shareholder in
connection with the Registration of the Registrable Securities
pursuant to such Registration Statement; and will reimburse the
Company, such other Selling Shareholders, such directors, officers,
partners, persons, underwriters ' and controlling persons for any
legal and any other expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage, liability
or action; such indemnification and reimbursement shall be to the
extent, but only to the extent, that such untrue statement (or
alleged untrue statement) or omission (or alleged omission) is made
in such Registration Statement or prospectus in reliance upon and in
conformity with written information furnished to the Company by such
Selling Shareholder and stated to be specifically for use in
connection with the offering of Registrable Securities. Anything in
the foregoing to the contrary notwithstanding, in no event shall the
aggregate obligations of a Selling Shareholder under this Section
1.7.2 to all parties that may be entitled to indemnification
hereunder exceed the amount of proceeds received by such Selling
Shareholder in connection with such offering of Registrable
Securities.
1.7.3 Indemnification Procedure. Promptly after receipt by an indemnified
party under this Section 1.7 of notice of the commencement of any
action which may give rise to a claim for indemnification hereunder,
such indemnified party will, if a claim in respect thereof is to be
made against an indemnifying party under this Section 2.7, notify
the indemnifying party in writing of the commencement thereof and
generally summarize such action. The indemnifying party shall have
the right to participate in and to assume the defense of such claim,
and shall be entitled to select counsel for the defense of such
claim with the approval of any parties entitled to indemnification,
which approval shall not be unreasonably withheld. Notwithstanding
the foregoing, the parties entitled to indemnification shall have
the, right to employ, separate counsel (reasonably satisfactory to
the indemnifying party) to participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of
such indemnified parties unless the named parties to such action or
proceedings include both the indemnifying party and the indemnified
parties and the indemnifying party or such indemnified parties shall
have been advised by counsel that there are one or more legal
defenses available to the indemnified parties which are different
from or additional to those available to the indemnifying party (in
which case, if the indemnified parties notify the indemnifying party
in writing that they elect to employ separate counsel at the
reasonable expense of the indemnifying party, the indemnifying party
shall not have the right to assume the defense of such action or
proceeding on behalf of the indemnified parties, it being
understood, however, that the indemnifying party shall not, in
connection with any such action or proceeding or separate or
substantially similar or related action or proceeding in the same
jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of
more than one separate counsel at any time for all indemnified
parties, which counsel shall be designated in writing by the
Purchasers of a majority of the Registrable Securities).
1.7.4 Contribution. If the indemnification provided for in this Section
1.7 from an indemnifying party is unavailable to an indemnified
party hereunder in respect to any losses, claims, damages,
liabilities or expenses referred to herein, then the indemnifying
party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or expenses
in such proportion as is appropriate to reflect the relative fault
of the indemnifying party and indemnified party in connection with
the statements or omissions which result in such losses, claims,
damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative fault of such indemnifying
party and indemnified party shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by such indemnifying
party or indemnified party and the parties' relative intent,
knowledge, access to information supplied by such indemnifying party
or indemnified party and opportunity to correct or prevent such
statement or omission. The amount paid or payable by a party as a
result of the losses, claims, damages, liabilities and expenses
referred to above shall be deemed to include any legal or other fees
or expenses reasonably incurred by such party in connection with
investigating or defending any action, suit, proceeding or claim.
2. Covenants of the Company. The Company agrees to:
(a) Notify the holders of Registrable Securities included in a
Registration Statement of the issuance by the Commission of any stop
order suspending the effectiveness of such Registration Statement or
the initiation of any proceedings for that purpose. The Company will
make every reasonable effort to prevent the issuance of any stop
order and, if any stop order is issued, to obtain the lifting
thereof at the earliest possible time.
(b) If the Common Stock is then listed on a national securities
exchange, use its best efforts to cause the Registrable Securities
to be listed on such exchange. If the Common Stock is not then
listed on a national securities exchange, use its best efforts to
facilitate the reporting of the Registrable Securities on NASDAQ.
(c) Take all other reasonable actions necessary to expedite and
facilitate disposition of the Registrable Securities by the holders
thereof pursuant to the Registration Statement.
(d) With a view to making available to the holders of Registrable
Securities the benefits of Rule 144 promulgated under the Securities
Act and any other rule or regulation of the Commission that may at
any time permit the Investors to sell securities of the Company to
the public without registration, the Company agrees to:
(i) make and keep public information available, as those terms are
understood and defined in Rule 144, at all times after 90 days
after the effective date of the first Registration Statement
filed by the Company for the offering of its securities to the
general public;
(ii) file with the Commission in a timely manner all reports and
other documents required of the Company under the Securities
Act and the Securities and Exchange Act of 1934 (the "1934
Act"); and
(iii) furnish to each holder of Shares, so long as such holder of
Shares owns any Shares, forthwith upon written request: (a) a
written statement by the Company that it has complied with the
reporting requirements of Rule 144 (at any time after 90 days
after the effective date of the first registration statement
filed by the Company), the Securities Act and the 1934 Act (at
any time after it has become subject to such reporting
requirements), (b) a copy of the most recent annual or
quarterly report of the Company and such other reports and
documents so filed by the Company and (c) such other
information as may be reasonably requested and as is publicly
available in availing the holders of Shares of any rule or
regulation of the Commission which permits the selling of any
such securities without registration.
(e) Prior to the filing of the Registration Statement or any amendment
thereto (whether pre-effective or post-effective), and prior to the
filing of any prospectus or prospectus supplement related thereto,
the Company will provide each Selling Shareholder with copies of all
pages thereto, if any, which reference such Selling.
3. Miscellaneous.
(a) Notices required or permitted to be given hereunder shall be in
writing and shall be deemed to be sufficiently given when personally
delivered or sent by registered mail, return receipt requested,
addressed (i) if to the Company, at DynEco Corporation, 000
Xxxxxxxxxxxxx Xxxxx, Xxxxxxxxx, XX 00000 and (ii) if to an Investor,
at the address set forth in Schedule A, or at such other address as
each such party furnishes by notice given in accordance with this
Section 3 (a).
(b) Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right
or remedy, will not operate as a waiver thereof. No waiver will be
effective unless and until it is in writing and signed by the party
giving the waiver.
(c) This Agreement shall be enforced, governed and construed in all
respects in accordance with the laws of the State of Minnesota, as
such laws are applied by Minnesota courts to agreements entered into
and to be performed in Minnesota by and between residents of
Minnesota. In the event that any provision of this Agreement is
invalid or unenforceable under any applicable statute or rule of
law, then such provision shall be deemed inoperative to the extent
that it may conflict therewith and shall be deemed modified to
conform with such statute or rule of law. Any provision hereof which
may prove invalid or unenforceable under any law shall not affect
the validity or enforceability of any other provision hereof.
(d) This Agreement may not be assigned by the Investor other than to the
purchaser or transferee of more than 50% of the Investor's Shares.
(e) This Agreement constitutes the entire agreement between the parties
hereto with respect to the subject matter hereof and may be amended
only by a writing executed by the Company and the holders of a
majority in interest of the Registrable Securities.
(f) This Agreement may be executed in two or more counterparts, each of
which when so executed and delivered shall be deemed to be an
original and all of which together shall be deemed to be one and the
same Agreement.
(g) Advisor shall perform the Services as an independent contractor and
shall not be considered an employee of Company or Partner, joint
venture or otherwise related to Company for any purpose.
(h) This Agreement shall be governed by the laws of the State of
Minnesota.
(i) The failure of either party to exercise its rights under this
Agreement shall not be deemed to be a waiver of such rights or a
waiver of any subsequent breach.
(j) Any delay or nonperformance of any provision of this Agreement
caused by conditions beyond the reasonable control of the performing
party shall not constitute a breach of this Agreement, provided that
the delayed party has taken reasonable measures to notify the other
of the delay in writing. The delayed party's time for performance
shall be deemed to be extended for a period equal to the duration of
the conditions beyond its control. "Conditions beyond a party's
reasonable control" include, but are not limited to, natural
disasters, acts of government after the date of the Agreement, power
failure, fire, flood, acts of God, labor disputes, riots, acts of
war and epidemics. Failure of subcontractors and inability to obtain
materials shall not be considered a condition beyond a party's
reasonable control.
(k) Mediation and Arbitration: If a dispute arises under this Agreement,
the parties agree to first try to resolve the dispute with the help
of a mutually agreed-upon mediator in Minneapolis, Minnesota. Any
costs and fees other than attorney fees associated with the
mediation shall be shared equally by the parties. If the dispute is
not resolved through mediation, the parties agree to submit the
dispute to binding arbitration in Minneapolis, Minnesota under the
rules of the American Arbitration Association. Judgment upon the
award rendered by the arbitrator may be entered in any court with
jurisdiction to do so.
(l) If any legal action is necessary to enforce this Agreement, the
prevailing party shall be entitled to reasonable attorney fees,
costs and expenses.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the date first above written.
DynEco Corporation
By: Xxxxxx X. Xxxxxxx Ph.D.
-----------------------
Xxxxxx X. Xxxxxxx Ph.D.
Chief Executive Officer
By: Xxxx X. Xxxxx
-------------
Xxxx X. Xxxxx
DynEco 000 Xxxxxxxxxxxxx Xxxxx x Xxxxxxxxx Xx 00000
Corporation 321/639-0333 o xxx.xxxxxx.xxx
________________________________________________________________________________
Fuel Cell Air Compressors and Hydrogen Circulators
February 5, 2004
Xx. Xxxx Xxxxx
0000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000
Dear Xx. Xxxxx:
This letter will serve as confirmation of your authorization for DynEco
Corporation to convert the debt of 100,000 shares issuable at $0.10 per share
under the August 1, 2001 Professional Legal Services Agreement to an option
dated February 5, 2004 with a 5 year term. We confirm that the shares issuable
upon exercise of the option will be registered for resale in the Company's
registration statement proposed to be filed on Form SB-2, and that the exercise
price of the option has been pre-paid. I agree to provide such information as is
reasonably requested by the Company in connection with the registration of the
shares issuable upon exercise of the option.
Thank you very much and personal regards-hope to see you while you are in
Florida.
Sincerely,
DynEco Corporation
/s/ Xxxxxx X. Xxxxxxx, Ph.D.
----------------------------
Xxxxxx X. Xxxxxxx, Ph.D.
CEO
Approved By:
/s/ Xxxx Xxxxx February 5, 2004
-------------- ----------------
Xxxx Xxxxx Date
