CONSULTING AGREEMENT
This Consulting Agreement (the "Agreement"), effective as of
September 1, 1995 is entered into by and between ELECTROSOURCE,
INC, Delaware corporation (herein referred to as the "Company")
and LIVIAKIS FINANCIAL COMMUNICATIONS, INC., a California
corporation (herein referred to as the "Consultant")
RECITALS
WHEREAS, Company is a publicly held corporation with its
common stock traded on the NASDAQ; and
WHEREAS, Consultant has experience in the area of corporate
finance, investor communications and financial and investor
public relations; and
WHEREAS, Company desires to engage the services of
Consultant to assist and consult to the Company in matters
concerning corporate finance and to represent the company in
investors' communications and public relations with existing
shareholders and brokers, dealers and other investment
professionals as to the Company's current and proposed
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,
for a term of twenty-four (24) months commencing on the date of
the Agreement and ending on August 31, 1997.
2. Duties of Consultant. The Consultant agrees to provide the
following specified consulting servies through it's officers and
employees during the term specified in Section 1.:
(a) Advise and assist the Company in developing and
implementing appropriate plans and materials 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 advise
and assist the Company in communicating appropriate information
regarding such plans, strategy and personnel to the financial community;
(d) Assist and advise the Company with respect to its (i)
corporate finance activities, (ii) stockholder and investor
relations, (iii) relations with brokers, dealers, analysts and
other investment professionals, and (iv) financial public
relations generally;
(e) Perform the functions generally assigned to investor/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 or reviewing
press releases, reports and other communications with or to shareholders,
the investment community and the general public; advising with respect
to the timing, form, distribution and other matters related to such
releases, reports and communications; and consulting with respect
to corporate symbols, logos, names, the presentation of such symbols,
logos and names, and other matters relating to corporate image;
(f) Disseminate information regarding the company to shareholders,
brokers, dealers, other investment community professionals and the
general investment public;
(g) Conduct meetings, in person or by telephone, with brokers,
dealers, analysts and other investment professionals to advise them of
the Company's plans, goals and activities, and assist the Company in
preparing for press conferences and other forums involving the media,
investment community 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 investment community implications
thereof;
(i) Otherwise perform as the Company's financial relations and public
relations consultant; and,
(j) Make public communications and disclosures regarding the
Company only within the scope of the authorizations conferred by
the Company and not make any such communications or disclosures
of information not provided or authorized by the Company.
3. Allocation of Time and Energies. The Consultant hereby
promises to perform and discharge well and 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 investor public relations and communications activities, so
long as such activities are in compliance with applicable
securities laws and regulations. Consultant 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 hereinabove in a diligent and professional
manner. At the request of the company, the Consultant will
inform the Company of its specific activities concerning the
Company. The parties acknowledge and agree that a
disproportionately large amount of the effort to be expneded and
the costs to be incurred by the Consulant and the benefits to be
received by the Company are expected to occur upon and shortly
after, and in any eventt, within four or five months of the
effectiveness of this Agreement. Accordingly, the Company agrees
that delayed installments provided in paragraph 4 of this
Agreement are part of the total consideration due hereunder, are
not specifically allocated to the periods in which they are to be
paid, and shall be immediately due and payable upon the
occurrence of any default by the Company under this Agreement or
any termination of this Agreement by either party not based upon
a breach of this Agreement by the Consultant. The Company agrees
that such acceleration is not a penalty but is solely intended to
compensate Consultant fairly for its services, costs and expenses
hereunder.
4. Remuneration. As full and complete compensation for
services described in this Agreement, the Company shall
compensate Consultant as follows:
4.1 For undertaking, this engagement and for other good and
valuable consideration, the Company agrees to issue and
deliver to the Consultant a "Commencement Bonus" payable in
the form of 1,360,000 unregistered, restricted shares of the
Company's Common Stock (the "Common Stock"). This
Commencement Bonus shall be issued to the Consultant
promptly 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 1,360,000
shares issued as a Commencement Bonus, therefore, constitute
payment for Consultant's agreement to represent the company
and are a nonrefundable, non-apportionable, and non-ratable
retainer; such shares are not a prepayment for future
services. In additional, the Company shall pay to the
Consultant 20,000 restricted shares of the Company's Common
Stock, a the end of the fourth, eighth, twelfth, sixteenth,
twentieth and twenty-fourth months after the effective date
of this Agreement, which shares when issued and delivered to
Consultant, be fully paid and non-assessable. If and in the
event the Company is party to any acquisition, merger or
other business combination in which the business of the
Company is not the dominant business within the surviving
entity, payment of all amounts due to the Consultant
hereunder, including installments due under this Section 4.1
which have not been paid, shall be accelerated and shall be
due and pyable to the Consultant and paid by the company no
later than the closing of any such acquisition, merger or
business combination. All shares issued pursuant to this
Agreement shall be evidenced by stock certificate(s) issued
in the name of Liviakis Financial Communications, Inc.
4.2 Consultant acknowledges that the shares of Common Stock
to be issued pursuant to this Agreement (the "Shares") will
not 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 and any applicable state securities
laws. It is also understood that the certificates will bear
a legend reflecting the fact that the securities have been
issued without registration under the Securities Act of 1933
and may not be sold or transferred except upon registration
or an exemption therefrom and compliance with any applicable
state securities laws.
4.3 In connection with the acquisition of Shares hereunder,
the Consultant represents and warrants to the Company as
follows:
(a) Consultant has received a copy of the Auditor's Report
for the fiscal year ending December 31, 1994, 1993, 1992.
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.
5. 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, etc.) approved by the
Company prior to its incurring an obligation for reimbursement.
6. Indemnification. The Company warrants and represents
that all oral communications, written documents or materials,
other than those designated by the Company to the Consultant as
"confidential" or "Company private," 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, cost and reasonable attorney's
fees with respect thereto resulting from Consultant's
communication or dissemination of any said information, documents
or materials not designated by the Company to the Consultant as
"confidential" or "Company private," excluding any such claims or
litigation resulting from consultants communication or
dissemination of information not provided or authorized by the
Company.
7. Representations. Consultant represents that he 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 his
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 acknowledges that, to the best of his knowledge,
Consultant is not the subject of any investigation, claim, decree
or judgment involving any violation of the SEC or securities
laws. Consultant further acknowledges that he is not a
securities Broker Dealer or a registered investment advisor.
8. Legal Representation. The Company acknowledges that it
has been represented by independent legal counsel in the
preparation of this Agreement. Consultant represents that he has
consulted with independent legal counsel and/or tax, financial
and business advisors, to the extent the Consultant deemed
necessary.
9. 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 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.
10. 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.
11. 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.
12. Notices. All notices, requests, and other
communications hereunder shall be deemed to be duly given if sent
by U.S. mail, postage prepaid, addressed to the other party at
the address as set forth herein below:
To the Company: Xxxxxxx X. Xxxxxxx
Chairman & CEO
Electrosource, Inc.
0000-X Xxxxxxxx Xxxxx
Xxxxxx, XX 00000
To the Consultant: Liviakis Financial Communications, Inc.
Xxxx X. Xxxxxxxx, President
0000 "X" Xxxxxx, Xxxxx X
Xxxxxxxxxx, Xxxxxxxxxx 00000
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.
13. 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
Sacramento County, CA will be the venue of any dispute and will
have jurisdiction over all parties.
14. 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 thereof. 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.
15. Third Party Fees. Consultant will not accept from any
third parties any fees or other remuneration related to services
to be performed under this Agreement except with the prior
written consent of the Company.
16. Complete Agreement. This Agreement instrument 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" ELECTROSOURCE, INC.
Date: September 1, 1995 By: /s/
Xxxxxxx X. Xxxxxxx
Chairman & CEO
"Consultant" LIVIAKIS FINANCIAL COMMUNICATIONS, INC.
Date: September 1, 1995 By: /s/
Xxxx X. Xxxxxxxx
President
