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EXHIBIT 10.27
CONSULTING AGREEMENT
THIS AGREEMENT is among TEAM COMMUNICATIONS GROUP, INC., a corporation
organized under the laws of the State of California, whose address is 00000
Xxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxx Xxxxxxx, Xxxxxxxxxx 00000 (hereinafter
referred to as the "Company"); MARATHON CONSULTING CORPORATION, of 0000
Xxxxxxxx Xxxx #000, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000 (hereinafter referred to as
the "Consultant");
WHEREAS, the Consultant is in the business of assisting public companies
in financial advisory, strategic business planning, and investor and public
relations services designed to make the investing public knowledgeable about
the benefits of stock ownership in the Company; and
WHEREAS, the Consultant may, during the period of time covered by this
Agreement, present to the Company one or more plans of public and investor
relations to utilize other business entities to achieve the Company's goals of
making the investing public knowledgeable about the benefits of stock ownership
in the Company; and
WHEREAS, the Company recognizes that the Consultant is not in the business
of stock brokerage, investment advice, activities which require registration
under either the Securities Act of 1933 (hereinafter "the Act") or the
Securities and Exchange Act of 1934 (hereinafter "the Exchange Act"),
underwriting, banking, is not an insurance company, nor does it offer services
to the Company which may require regulation under federal or state securities
laws; and
WHEREAS, the parties agree, after having a complete understanding of the
services desired and the services to be provided, that the Company desires to
retain Consultant to provide such assistance through its services for the
Company, and the Consultant is willing to provide such services to the Company;
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, the receipt and sufficiency of which is hereby acknowledges,
the parties agree as follows:
1. DUTIES AND INVOLVEMENT.
The Company hereby engages Consultant to provide a plan, and for
coordination in executing the agreed-upon plan, for using various investor and
public relations services as agreed by both parties. The plan may include, but
not by way of limitation, the following services: consulting with the Company's
management concerning marketing surveys, investor accreditation, availability to
expand investor base, investor support, strategic business planning, broker
relations, consulting of mergers with companies, review and assistance in
updating a business plan, review and advise on the capital structure for the
Company, propose legal counsel, assist in the development of an acquisition
profile
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and structure, recommend financing alternatives and sources, and consult on
corporate finance and/or investment banking issues.
2. RELATIONSHIP AMONG THE PARTIES.
Consultant acknowledges that it is not an officer, director or agent of
the Company, it is not, and will not, be responsible for any management
decisions on behalf of the company, and may not commit the company to any
action. The Company represents that the consultant does not have, through stock
ownership or otherwise, the power to control the Company, nor to exercise any
dominating influence over its management.
Consultant understands and acknowledges that this Agreement shall not
create or imply any agency relationship among the parties, and Consultant will
not commit the Company in any manner except when a commitment has been
specifically authorized in writing by the Company.
The Company and the Consultant agree that the relationship among the
parties shall be that of independent contractor.
3. EFFECTIVE DATE, TERM AND TERMINATION.
This Agreement shall begin on May 1, 1999 and will continue for _____
months.
4. OPTION TO RENEW AND EXTEND.
Company may renew this Agreement on the same terms by providing written
notice to Consultant at any time prior to the expiration hereof.
5. COMPENSATION AND PAYMENT OF EXPENSES.
The Company agrees to pay to Consultant, or its designee, the total sum of
thirty thousand (30,000) shares of common stock of the Company as total and
complete consideration for the services to be provided by the Consultant to the
Company. The stock shall contain a Rule 144 restriction and shall be delivered
to the Company upon the execution of this Agreement. It is understood and
contemplated by this Agreement that shares may to be assigned by Consultant to
one or more of its subcontractors.
The parties understand and agree that for its accounting purposes, Company
may elect to amortize the costs of this Agreement over the full term thereof,
even though payment shall be due upon execution.
The Company agrees to pay for all costs and expenses incurred associated
with its employees' working with Consultant and its representatives, including
lodging, meals and travel as necessary.
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All other expenses for the fulfillment of this Agreement, as contained in
Addendum A, shall be borne by the Consultant, and by third parties engaged by it
in connection with the performance of the financial and public relations
services provided for herein.
6. SERVICES NOT EXCLUSIVE.
Consultant shall devote such of its time and effort necessary to the
discharge of its duties hereunder. The Company acknowledges that Consultant is
engaged in other business activities, and that it will continue such activities
during the term of this Agreement. Consultant shall not be restricted from
engaging in other business activities during the term of this Agreement.
7. CONFIDENTIALITY.
Consultant acknowledges that it may have access to confidential
information regarding the company and its business. Consultant agrees that it
will not, during or subsequent to the term of this Agreement, divulge, furnish
or make accessible to any person (other than with the written permission of the
Company) any knowledge or information or plans of the Company with respect to
the company or its business, including, but not by way of limitation, the
products of the company, whether in the concept or development stage, or being
marketed by the Company on the effective date of this Agreement or during the
term hereof.
8. COVENANT NOT TO COMPETE.
During the term of this Agreement, Consultant warrants, represents and
agrees that it will not directly participate in the information developed for
and by the Company, and will not compete directly with the Company in the
Company's primary industry or related fields.
9. INVESTMENT REPRESENTATION.
The Company represents and warrants that it has provided Consultant with
access to all information available to the company concerning its condition,
financial or otherwise, its management, its business and its prospects. The
Company represents that it has provided Consultant with all copies of the
Company's filings for the prior twelve (12) months, if any, (the "Disclosure
Documents") made under the rules and regulations promulgated under the Act, as
amended, or the Exchange Act, as amended. Consultant acknowledges that the
acquisition of the securities to be issued to Consultant involves a high degree
of risk. Consultant represents that it and its advisors have been afforded the
opportunity to discuss the Company with its management. The Company represents
that it has and will continue to provide Consultant with any information or
documentation necessary to verify the accuracy of the information contained in
the Disclosure Documents, and will promptly notify Consultant upon the filing
or any registration statement or other periodic reporting documents filed
pursuant to the Act or the Exchange Act. This information will include DTC
sheets, which shall be provided to the Consultant no less than every two (2)
weeks. The Company hereby represents that it does not currently have any of its
securities in registration.
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The Consultant represents that it is not subject to any disciplinary
action by either the National Association of Securities Dealers or the
Securities and Exchange Commission by virtue of any violations of their rules
and regulations.
10. REGULATIONS S.
The Company agrees that during the term of this Agreement it will notify
the Consultant in writing of the issuance of any common stock pursuant to
Regulation S of the General Regulations of the Securities and Exchange
Commission, or any registration of the company's securities by means of a Form
S-8 registration statement.
11. ASSIGNMENT.
This Agreement may not be assigned by either party hereto without the
written consent of the other, but shall be binding upon the successors of the
parties.
12. ARBITRATION.
If a dispute arises out of or relates to this Agreement, or the breach
thereof, and if said dispute cannot be settled through direct discussion, the
parties agree to first endeavor to settle the dispute in an amicable manner by
mediation under the Commercial Mediation Rules of the American Arbitration
Association before resorting to arbitration. Thereafter, any unresolved
controversy or claim arising out of or relating to this Agreement or a breach
thereof shall be settled by arbitration in accordance with the rules of the
American Arbitration Association, and judgment upon the award rendered by the
Arbitrator may be entered in any court having jurisdiction thereof. Any
provisional remedy which would be available from a court of law shall be
available to the parties to this Agreement from the Arbitrator pending
arbitration. The situs of the arbitration shall be Forsyth County, North
Carolina.
13. INDEMNIFICATION.
(a) Both parties agree to indemnify and hold harmless the other, and its
agents and employees, against any losses, claims, damages or liabilities,
joint or several, to which either party, or any such other person, may
become subject under the Act, the Exchange Act, or otherwise, insofar as
such losses, claims, damages or liabilities (or actions, suits or
proceedings in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in
the registration statement, any preliminary prospectus, the prospectus, or
any amendment or supplement thereto; or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to
be stated therein, or necessary to make the statements therein not
misleading; and will reimburse the other party, or any such other person,
for any legal or other expenses reasonably incurred by the other party, or
any such other person, in connection with investigation or defending any
such loss, claim, damage, liability, or action, suit or proceeding;
provided, however, that
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the other party will not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement, or omission or alleged
omission, from the registration statement, any preliminary prospectus, the
prospectus, or any such amendment or supplement, in reliance upon and in
conformity with written information furnished by one party to the other
specifically for use in the preparation thereof.
(b) Promptly after receipt by an indemnified party under this Section or
notice of the commencement of any action, suit or proceeding, such
indemnified party will, if a claim in respect thereof is to be made against
an indemnifying party under this Section, notify the indemnifying party of
the commencement thereof; but the omission so to notify the indemnifying
party will not relieve it from any liability which it may otherwise have to
any indemnified other than under this Section. In case of any such action,
suit or proceeding is brought against any indemnified party, and it
notified an indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein, and, to the
extent it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Section for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than
reasonable costs of investigation.
14. REGISTRATION OF SECURITIES AND LIQUIDATED DAMAGES.
The Company hereby acknowledges that time is of the essence with respect
to registration of the Shares, and that in the event the Shares are not
available for sale, by an effective registration statement or otherwise, by
December 15, 1999, the Company agrees to issue either an additional number of
shares equal to ten percent (10%) of the total number of shares issued herein
for each additional thirty (30) day delay in providing an effective
registration statement or removing any Rule 144 legend, or the cash equivalent
of such shares. In the event of a delay of less than a full thirty (30) day
period, the Consultant shall be entitled to a pro-rata allocation of additional
shares.
Consultant understands and acknowledges that the shares of common stock
are being acquired by Consultant for its own account, and not on behalf of any
other person, and are being acquired for investment purposes and not for
distribution. Consultant represents that the common stock will be a suitable
investment for Consultant, taking into consideration the restrictions on
transferability affecting the common stock.
Company will undertake to comply with the various states' securities laws
with respect to the registration of the Shares referred to herein, company
undertakes to make available for review and comment, on a timely basis and prior
to submission to any regulatory agency, copies of the
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registration statement.
15. "PIGGYBACK REGISTRATION."
If the Company proposes to register any equity securities under the
Securities Act for sale to the Public for cash, whether for its own account or
for the account of other security holders, or both, on each such occasion the
Company will give written notice to Consultant no less than fifteen (15)
business days prior to the anticipated filing date of its intention to do so.
Upon the written request of Consultant, received by the Company no later than
the tenth (10th) business day after receipt by Consultant of the notice sent by
the Company, to register, on the same terms and conditions as the Consultant of
the notice sent by the Company, to register, on the same terms and conditions
as the securities otherwise being sold pursuant to such registration, any of
its registerable securities (which request shall state the intended method of
disposition thereof), the company will cause the registerable securities as to
which registration shall have been so requested to be included in the
securities to be covered by the registration statement proposed to be filed by
the Company, on the same terms and conditions as any similar securities
included therein, all to the extent requisite to permit the sale or other
disposition by the Consultant (in accordance with its written request) of such
registerable securities so registered; provided, however, that the Company may,
at any time prior to the effectiveness of any such registration statement, in
its sole discretion and with the consent of Consultant, abandon the proposed
offering in which Consultant had requested to participate.
16. NOTICES.
All notices required or permitted to be given under this Agreement shall
be given in writing and shall be delivered, either personally or by express
delivery service, to the party to be notified. Notice to each party shall be
deemed to have been duly given upon delivery, personally or by courier (such as
Federal Express or similar express delivery service), addressed to the
attention of the officer at the address set forth beneath the signature line
below, or to such other officer or addresses as either party may designate,
upon at least ten (10) days' written notice, to the other party.
17. GOVERNING LAW.
The Agreement shall be construed by and enforced in accordance with the
laws of the State of California.
18. ENTIRE AGREEMENT.
This Agreement contains the entire understanding and agreement among the
parties. There are no other agreements, conditions or representations, oral or
written, express or implied, with regard thereto. This Agreement may be amended
only in writing signed by all parties.
19. NON-WAIVER.
A delay or failure by any party to exercise a right under this Agreement,
or a partial or single
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exercise of that right, shall not constitute a waiver of that or any other
right.
20. COUNTERPARTS.
This Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
Agreement.
21. BINDING EFFECT.
The provisions of this Agreement shall be binding upon all parties, their
successors and assigns.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement on Monday May 3, 1999, to be effective as of the day and year
provided herein.
CONSULTANT: COMPANY:
TEAM COMMUNICATIONS GROUP, INC. MARATHON CONSULTING CORPORATION
By: /s/ XXXX X. XXXXX By: /s/ XXXXXXX XXXXXXXXXX
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Xxxx X. Xxxxx, Chairman Xxxxxxx Xxxxxxxxxx, President
and CEO
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